RECITALS
Exhibit
99.1
REPLACEMENT
CAPITAL COVENANT, dated as of May 25, 2007 (this “Replacement
Capital Covenant”), by CVS Caremark Corporation, 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 $1,000,000,000 aggregate
principal amount of its 6.302% Enhanced Capital Advantaged Preferred Securities
due 2062 (the “ECAPSSM”).
B.
This Replacement Capital Covenant is the “Replacement
Capital Covenant” referred to in the Prospectus Supplement,
dated May 22, 2007, relating to the ECAPSSM (the “Prospectus
Supplement”).
C.
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.
D.
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 Payment, Redemption and Purchase Of ECAPSSM.
The Corporation hereby promises and covenants to and for the benefit
of each Covered Debtholder that the Corporation shall not pay, redeem or
purchase, and will cause its Subsidiaries not to pay or purchase, as applicable,
all or any part of the ECAPSSM on or before
the
date that is 15 years prior to the Final Maturity Date except to the extent
that
the principal amount paid or the applicable redemption or purchase price does
not exceed the sum of the following amounts raised during the applicable
Measurement Period:
(a)
200% of (i) the aggregate amount of net cash proceeds received by the
Corporation and its Subsidiaries from the sale of Common Stock and Rights to
acquire Common Stock (including Common Stock and Rights to acquire Common Stock
sold pursuant to the Corporation’s dividend reinvestment plan, direct stock
purchase plan or employee benefit plans) to Persons other than the Corporation
and its Subsidiaries and (ii) the aggregate Market Value of any Common Stock
that the Corporation and its Subsidiaries have issued to Persons other than
the
Corporation and its Subsidiaries in connection with the conversion 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 since the most recent Measurement Date (without double
counting proceeds received in any prior Measurement Period); plus
(b)
100% of the aggregate amount of net cash proceeds received by the Corporation
and its Subsidiaries since the most recent Measurement Date (without double
counting proceeds received in any prior Measurement Period) from the sale of
Mandatorily Convertible Preferred Stock, Debt Exchangeable for Common Equity
and
Debt Exchangeable for Preferred Equity to Persons other than the Corporation
and
its Subsidiaries; plus
(c)
100% of the aggregate amount of net cash proceeds received by the Corporation
and its Subsidiaries since the most recent Measurement Date (without double
counting proceeds received in any prior Measurement Period) from the sale of
Qualifying Capital Securities to Persons other than the Corporation and its
Subsidiaries.
For
the
avoidance of doubt, any reference in this Replacement Capital Covenant to any
payment, redemption or purchase of the Corporation’s securities will be deemed
to include a defeasance of the Corporation’s obligations under such
securities.
SECTION
3.
Covered Debt. (a) The Corporation represents and warrants that the
Initial Covered Debt is Eligible Debt.
(b)
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 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
2
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)
the series of outstanding long-term indebtedness for money borrowed that is
determined to be Covered Debt pursuant to this Section 3(b) 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
(v)
in connection with such identification of a new series of Covered Debt, the
Corporation shall give the notice provided for in Section 3(c) below within
the
time frame provided for in such section.
Notwithstanding
any other provisions of this Replacement Capital Covenant, if on any
Redesignation Date the Corporation has then outstanding one or more series
of
Eligible Subordinated Debt, a series of Eligible Subordinated Debt shall be
identified as Covered Debt in accordance with Section 3(b) and no Eligible
Senior Debt shall then be Covered Debt.
If
at any
time the Covered Debt is held by a Trust, a holder of the capital securities
of
such Trust may institute a legal proceeding directly against the Corporation
for
the enforcement of this Replacement Capital Covenant, and such capital
securities shall be deemed to be “Covered
Debt” so long as the Covered Debt held by the Trust remains
Covered Debt.
(c)
Notice.
In order to give effect to the intent of the Corporation described in Recital
C,
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 current
report on Form 8-K;
3
(ii)
so long as the Corporation is a reporting company under the Exchange Act, the
Corporation will include in each annual report filed with the Commission on
Form
10-K under the 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 annual report on Form 10-K is filed with the
Commission;
(iii)
if a series of the Corporation’s long-term indebtedness for money borrowed (A)
becomes Covered Debt or (B) ceases to be Covered Debt pursuant to the procedures
set forth in Section 3(b), 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 promptly report such change in the Corporation’s next quarterly report,
annual report and in a current report on Form 8-K under the Exchange Act,
including or incorporating by reference this Replacement Capital
Covenant;
(iv)
if, and only if, the Corporation ceases to be a reporting company under the
Exchange Act, the Corporation shall, rather than include the relevant
information in Exchange Act filings pursuant to clauses (ii) and (iii) of this
Section 3(c), cause a notice of the information required by clauses (ii) and
(iii) of this Section 3(c) to be posted on (A) the Corporation’s website and (B)
the Bloomberg screen and each similar third-party vendor’s screen for each
series of Covered Debt (or any successor thereto) (each, an “Investor
Screen”) and cause a hyperlink to the execution copy of this
Replacement Capital Covenant to be included on the appropriate Investor Screen;
and
(v)
promptly upon request by any Holder of Covered Debt, the Corporation shall
provide such Holder with a conformed copy of this Replacement Capital
Covenant.
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 (the “Termination
Date”) to occur of (i) the date that is 15 years prior to the
Final Maturity Date, (ii) the date on which all the ECAPSSM have been
paid,
redeemed or purchased in full (in compliance with the terms of this Replacement
Capital Covenant, (iii) 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 and (iv) the date on which the
Corporation ceases to have any series of outstanding Eligible Senior Debt or
Eligible Subordinated Debt (in each case without giving effect to the
4
rating
requirement in clause (b) of the definition of each such term). Moreover, if
an
event of default under the Indenture resulting in an acceleration of the
ECAPSSM occurs,
the Corporation does not have to comply with this Replacement Capital Covenant.
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 then outstanding 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 any Holder
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
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, (ii) such amendment or supplement is not adverse to the Covered
Debtholders and an officer of the Corporation has delivered to the Holders
of
the then effective series of Covered Debt in the manner provided for the
delivery of notices in the indenture, fiscal agency agreement or other
instrument with respect to such Covered Debt a written certificate to that
effect or (iii) such amendment or supplement eliminates Common Stock, Rights
to
acquire Common Stock, Debt Exchangeable for Common Equity and/or Mandatorily
Convertible Preferred Stock as Replacement Capital Securities if, in the case
of
this clause (iii), the Corporation has been advised in writing by a nationally
recognized independent accounting firm that there is more than an insubstantial
risk that the failure to do so 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.
(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 New
York.
5
(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 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 prior to a Termination Date solely 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:
CVS
Caremark Corporation
Xxx
XXX
Xxxxx
Xxxxxxxxxx,
XX 00000
Attention:
General Counsel
Any
demand, notice, request or other communication to Covered Debtholders under
this
Replacement Capital Covenant may be given by the Corporation in any manner
contemplated by the indenture, fiscal agency agreement or other instrument
governing the Covered Debt. For all purposes of this Replacement Capital
Covenant, the Corporation may deem and treat the registered Holder of any
Covered Debt as the absolute owner of such Covered Debt, and the Corporation
shall not be affected by any notice to the contrary. The rights of beneficial
owners in any Covered Debt shall be exercised only through the registered Holder
of such Covered Debt, and the Corporation may rely and shall be fully protected
in relying upon information furnished by such registered
6
Holder.
Any demand, notice, request, consent, waiver or other action of a Holder shall
bind every future Holder of the same Covered Debt and the Holder of every
instrument evidencing Covered Debt issued upon the registration of transfer
thereof or in exchange therefor.
(d)
No Covered Debtholder shall have any right to institute any proceeding, judicial
or otherwise, with respect to this Replacement Capital Covenant, or for any
other remedy with respect to this Replacement Capital Covenant, unless the
Corporation shall have failed to comply with its obligations under this
Replacement Capital Covenant.
7
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.
| CVS CAREMARK CORPORATION | |||
|
|
By:
|
/s/ Xxxxx X. Xxxxxxx | |
|
Name:
Xxxxx X. Xxxxxxx
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|||
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Title:
Executive Vice President,
|
|||
| Chief Financial Officer | |||
8
Schedule
I
DEFINITIONS
“Alternative
Payment Mechanism” means, with respect to any securities or
combination of securities (together in this definition, “such
securities”), provisions in the related transaction documents
requiring the Corporation (i) 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 securities and
(ii) to apply the proceeds to pay unpaid Distributions on such 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
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 securities) that the Corporation has received during
the
180 days prior to the related Distribution Date from the issuance of APM
Qualifying Securities, subject to the Common Cap, the Preferred Cap and the
Share Cap, as applicable (each as defined below);
(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 (other than following an acceleration of such securities
or
the occurrence of the final maturity thereof);
(c)
if deferral of Distributions continues for more than one year (or such shorter
period as is provided for in the terms of such securities), require the
Corporation not to pay, redeem or purchase any of the Corporation’s capital
stock or the Corporation’s securities that rank pari
passu with or junior to the most senior issuable APM Qualifying
Securities until at least one year after all deferred Distributions have been
paid (a “share
repurchase provision”);
(d)
permit the Corporation, at its option, to provide that if the Corporation is
involved in a merger, consolidation, amalgamation or conveyance, transfer or
lease of assets substantially as an entirety to any other person (a “business
combination”) where immediately after the consummation of the
business combination more than 50% of the voting stock of the surviving entity
of the business combination, or the person to whom all or substantially all
of
the
I-1
Corporation’s
assets are conveyed, transferred or leased, is owned by the shareholders of
the
other party to the business combination, then clauses (a), (b) and (c) above
will not apply to any deferral period that is terminated on the next interest
payment date following the date of consummation of the business
combination;
(e)
limit the obligation of the Corporation to issue (or use commercially reasonable
efforts to issue) APM Qualifying Securities that are Common Stock or Rights
to
acquire Common Stock, an amount from the issuance thereof pursuant to the
Alternative Payment Mechanism (including at any point in time from all prior
issuances thereof pursuant to the Alternative Payment Mechanism) (A) with
respect to deferred Distributions during the first five years of any deferral
period, to a number of shares of Common Stock and shares purchasable upon the
exercise of Rights to acquire Common Stock not in excess of 2% of the total
number of issued and outstanding shares of Common Stock as of the date of the
then most recent publicly available consolidated financial statements of the
Corporation (the “Common
Cap”); provided
(and it being understood) that the Common Cap shall cease to apply to such
deferral period by a date (as specified in the related transaction documents)
which shall be not later than the fifth anniversary of the commencement of
such
deferral period and (B) a maximum issuance cap on the issuance of APM Qualifying
Securities consisting of Common Stock and Rights to acquire Common Stock, in
each case to be set at the Corporation’s discretion (the “Share
Cap”); provided
that such Share Cap will be subject to the Corporation’s agreement
to use commercially reasonable efforts to increase the Share Cap when reached
to
a number of shares of Common Stock that would allow the Corporation to satisfy
its rights with respect to the Alternative Payment Mechanism and only to the
extent it can do so and simultaneously satisfy its future fixed or contingent
obligations under other securities and derivative instruments that provide
for
settlement or payment in shares of Common Stock.
(f)
limit the right of the Corporation to issue (or use commercially reasonable
efforts to issue) APM Qualifying Securities that are Qualifying Non-Cumulative
Preferred Stock or Mandatorily Convertible Preferred Stock, an amount from
the
issuance thereof pursuant to the related Alternative Payment Mechanism
(including at any point in time from all prior issuances of Qualifying
Non-Cumulative Preferred Stock and unconverted Mandatorily Convertible Preferred
Stock pursuant to such Alternative Payment Mechanism) equal to 25% of the
principal or stated amount of the securities that are the subject of the related
Alternative Payment Mechanism (the “Preferred
Cap”); and
(g)
in the case of securities other than Qualifying Non-Cumulative Preferred Stock,
include a Bankruptcy Claim Limitation Provision;
provided
(and it being understood) that:
I-2
(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 based on the date each
payment was first deferred, subject to the Common Cap, Preferred Cap and Share
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.
“APM
Qualifying Securities” means, with respect to an Alternative
Payment Mechanism, one or more of the following (as designated in the
transaction documents for the Qualifying Capital Securities that include an
Alternative Payment Mechanism, a Mandatory Trigger Provision or Debt
Exchangeable for Preferred Equity):
|
(a)
|
Common
Stock;
|
|
(b)
|
Rights
to acquire Common Stock;
|
|
(c)
|
Mandatorily
Convertible Preferred Stock; or
|
|
(d)
|
Qualifying
Non-Cumulative Preferred Stock,
|
in
each
case, of the Corporation;
provided
that if the APM Qualifying Securities for any Alternative Payment Mechanism,
Mandatory Trigger Provision or Debt Exchangeable for Preferred Equity include
both Common Stock and Rights to acquire Common Stock, such Alternative Payment
Mechanism, Mandatory Trigger Provision or Debt Exchangeable for Preferred Equity
may permit, but need not require, the
I-3
Corporation
to issue Rights to acquire Common Stock, or Qualifying Non-Cumulative Perpetual
Preferred Stock; provided
further that if such Alternative Payment Mechanism, Mandatory Trigger Provision
or Debt Exchangeable for Preferred Equity includes all of the securities
included in (a) through (d) above, it may allow for an amendment of the terms
of
such security to eliminate Common Stock, Rights to acquire Common Stock and
Mandatorily Convertible Preferred Stock as APM Qualifying Securities if the
Corporation has been advised in writing by a nationally recognized independent
accounting firm that there is more than an insubstantial risk that the failure
to do so would result in a reduction in the Corporation’s earnings per share as
calculated in accordance with generally accepted accounting principals in the
United States.
“Bankruptcy
Claim Limitation Provision” means, with respect to any
securities or combination of securities that have an Alternative Payment
Mechanism or a Mandatory Trigger Provision (together in this definition, “such
securities”), 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 having a Mandatory
Trigger Provision, to:
(i)
in the case of securities having an Alternative Payment Mechanism or Mandatory
Trigger Provision with respect to which the APM Qualifying Securities do not
include Qualifying Non-Cumulative Preferred Stock or Mandatorily Convertible
Preferred Stock, 25% of the stated or principal amount of such securities then
outstanding;
(ii)
in the case of any other securities an amount not in excess of: (A) the amount
of accumulated and unpaid Distributions (including compounded amounts) that
relate to the earliest two years of the portion of the deferral period for
which
Distributions have not been paid or (B) the sum of (1) the amount of accumulated
and unpaid Distributions (including compounded amounts) that relate to the
earliest two years of the portion of the deferral period for which Distributions
have not been paid and (2) an amount equal to the excess, if any, of the
Preferred Cap over the aggregate amount of net proceeds from the sale of
Qualifying Non-Cumulative Preferred Stock and unconverted Mandatorily
Convertible Preferred Stock 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 securities are deemed to agree that, to the extent
the
remaining claim exceeds the amount set forth in subclause (1), the amount they
receive in respect of such excess shall not exceed the
I-4
amount
they would have received had such claim ranked pari
passu with the interests of the holders, if any, of Qualifying
Non-Cumulative Preferred Stock.
“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 June 1,
2012, a day that is not a London banking day. A “London
banking day” is any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means any equity securities of the Corporation (including
equity securities held as treasury shares) or rights to purchase equity
securities that have no preference in payment or dividends or amounts payable
upon the Corporation’s liquidation, dissolution or winding-up (including a
security that tracks the performance of, or relates to the results of, a
business, unit or division of the Corporation), and any equity securities that
have no preference in payment or dividends or amounts payable upon the
Corporation’s liquidation, dissolution or winding-up and are issued in exchange
therefor in connection with a merger, consolidation, binding share exchange,
business combination, recapitalization or other similar event.
“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 during the
period that such long-term indebtedness for money borrowed is Covered
Debt.
“Current
Price” means, for the Common Stock on any date, 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
I-5
the
New
York Stock Exchange or, if such Common Stock is not then listed on the New
York
Stock Exchange, as reported by the principal U.S. securities exchange on which
such Common Stock is traded or quoted. If such Common Stock is not listed on
any
U.S. securities exchange on the relevant date, the “current
price” shall be the last quoted bid price for such Common Stock
in the over-the-counter market on the relevant date as reported by the National
Quotation Bureau or similar organization. If such Common Stock is not so quoted,
the “current price” shall be the average of the mid-point of the last bid and
ask prices for such 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. If such Common Stock is not so quoted, and if
bid
and ask prices for such Common Stock are not available, the “current price”
shall be determined by the expert opinion of a nationally recognized independent
investment banking firm selected by the Corporation’s Board of Directors for
this purpose.
“Debt
Exchangeable for Common Equity” means a security (or combination
of securities) that:
(a)
gives the holder a beneficial interest in (i) the Corporation’s debt securities
that are not redeemable prior to settlement of the stock purchase contract
referred to in subclause (ii) hereof and (ii) a fractional interest in a stock
purchase contract for a share of the Corporation’s 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 debt securities;
(b)
provides that the investors directly or indirectly grant the Corporation a
security interest in such debt securities and their proceeds (including any
substitute collateral permitted under the transaction documents) to secure
the
investors’ direct or indirect obligation to purchase the Corporation’s Common
Stock pursuant to such stock purchase contracts;
(c)
includes a remarketing feature pursuant to which the Corporation’s debt
securities are remarketed to new investors commencing not later than the last
Distribution Date that is at least one (1) month prior to the settlement date
of
the stock purchase contract; and
(d)
provides for the proceeds raised in the remarketing to be used to purchase
the
Corporation’s 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 acquiring the Corporation’s respective debt securities or other
collateral directly or indirectly pledged by investors in the Debt Exchangeable
for Common Equity in satisfaction of the investors’ obligations under the stock
purchase contracts.
I-6
“Debt
Exchangeable for Preferred Equity” means a security (or
combination of securities, together in this definition “such securities”)
that:
(a)
gives the holder a beneficial interest in (i) subordinated debt securities
of
the Corporation that include a provision requiring the Corporation to issue
(or
use commercially reasonable efforts to issue) one or more types of APM
Qualifying Securities raising aggregate proceeds at least equal to the deferred
Distributions on such subordinated debt securities commencing not later than
the
second anniversary of the commencement of such deferral period 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
(ii)
a fractional interest in a stock purchase contract for Qualifying Non-Cumulative
Preferred Stock;
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a.
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includes
a remarketing feature pursuant to which the subordinated debt of
the
Corporation 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 the security or earlier in the event of an early settlement
event based on: (i) the dissolution of the issuer of such securities
or
(ii) one or more capital ratios or financial tests set forth in the
terms
of such securities or related transaction
agreements;
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b.
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provides
that the investors directly or indirectly grant the Corporation a
security
interest in such debt securities and their proceeds (including any
substitute collateral permitted under the transaction documents)
to secure
the investors’ direct or indirect obligation to purchase the Corporation’s
Qualifying Non- Cumulative Preferred Stock pursuant to such stock
purchase
contracts;
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c.
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provides
for the proceeds raised in the remarketing to be used to purchase
Qualifying Non-Cumulative Preferred
Stock;
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d.
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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
Preferred Equity or Debt Exchangeable for Common Equity in the definition
of Qualifying Capital Securities;
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e.
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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; and
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I-7
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f.
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includes
a provision specifying that if the debt securities are not successfully
remarketed by the sixth anniversary of the issue date of the securities,
the Qualifying Non-Cumulative Preferred Stock will be acquired in
exchange
for the debt securities in satisfaction of the investors’ obligations
under the stock purchase contracts.
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“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 the later of the issue date and
a
Distribution Date for such securities to but excluding 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.
“ECAPSSM”
has the meaning specified in Recital A.
“Eligible
Debt” means, at any time, indebtedness, other than the
ECAPSSM and
securities that are pari
passu with the ECAPSSM,
that is 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 $100,000,000, (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) has a remaining life to maturity of not less than five years.
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.
I-8
“Eligible
Subordinated Debt” means, at any time in respect of any issuer,
each series of outstanding unsecured long-term indebtedness for money borrowed
that (a) upon a bankruptcy, liquidation, dissolution or winding-up of the
issuer, is senior to the ECAPSSM and ranks
subordinate to the issuer’s then outstanding series of unsecured 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 of not less than $100,000,000, (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) has a remaining life to maturity of not less than five years.
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.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
“Final
Maturity Date” means June 1, 2062.
“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 the Indenture, dated as of May 25, 2007, between the Corporation and
The
Bank of New York Trust Company, N.A., as Trustee, as supplemented by the
Supplemental Indenture, relating to the ECAPSSM.
“Initial
Covered Debt” means the Corporation’s 6.125% Senior Notes due
August 15, 2016.
“Intent-Based
Replacement Disclosure” means, as to any security or combination
of securities, that the issuer and its subsidiaries have publicly stated their
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 and its subsidiaries under the Exchange Act prior to or
contemporaneously with the issuance of such securities, that the issuer and
its
subsidiaries will pay, redeem or purchase such securities only with the proceeds
of replacement capital securities that have terms and provisions at the time
of
payment, redemption or purchase that are as or more equity-like than the
I-9
securities
then being paid, redeemed or purchased, raised within 180 days prior to the
applicable payment, redemption or purchase date.
“Mandatorily
Convertible Preferred Stock” means 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 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.
“Mandatory
Trigger Provision” means as to any security or combination of
securities (together in this definition, “securities”),
provisions in the terms thereof or of the related transaction agreements
that:
(i)
require, or at its option in the case of non-cumulative perpetual preferred
stock permit, the issuer of such securities to make payment of Distributions
on
such securities only to the extent it receives sufficient net proceeds from
the
issuance and sale of APM Qualifying Securities, 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 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 in either case require the application of the net
proceeds of such sale to pay such unpaid Distributions; provided
that (A) if the Mandatory Trigger Provision does not require such issuance
and
sale within one year of such failure, the amount of Common Stock or Rights
to
acquire Common Stock the net proceeds of which the issuer must apply to pay
such
Distributions pursuant to such provision may not exceed the Common Cap, and
(B)
the amount of Qualifying Non-Cumulative Preferred Stock and unconverted
Mandatory 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;
(ii)
if the provisions described in clause (i) do not require such issuance and
sale
within one year of such failure, require the issuer of such security and such
issuer’s Subsidiaries not to redeem or repurchase any of such issuer’s capital
stock or such issuer’s securities that rank pari
passu
with or junior to the most senior issuable APM Qualifying Securities
until at least one year after such issuer applies the net proceeds of the sales
described in clause (i) to pay such unpaid Distributions in full;
(iii)
other than in the case of Qualifying Non-Cumulative Preferred Stock, prohibit
the issuer from repurchasing any APM Qualifying Securities or any securities
that are pari passu with or junior to
I-10
its
APM
Qualifying Securities, the proceeds of which were used to pay deferred
Distributions since such failure before the date six months after the issuer
applies the net proceeds of the sales described in clause (i) to pay such unpaid
Distributions in full; and
(iv)
in the case of securities other than Qualifying Non-Cumulative Preferred Stock,
include a Bankruptcy Claim Limitation Provision.
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 or a Ten Year Optional Deferral Provision until
Distributions have been deferred for one or more Distribution Periods that
total
together at least ten years.
“Market
Disruption Events”, for purposes of sales of APM Qualifying
Securities pursuant to the Alternative Payment Mechanism or a Mandatory Trigger
Provision, means one or more events or circumstances set forth
below:
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•
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trading
in securities generally, or in the Corporation’s securities specifically,
on the New York Stock Exchange or any other national securities exchange
or over-the-counter market on which APM Qualifying Securities are
then
listed or traded shall have been suspended or their settlement generally
shall have been materially disrupted or minimum prices shall have
been
established on any such exchange or market by the Commission, such
exchange or market or by any other regulatory body or governmental
authority having jurisdiction such that trading shall have been materially
disrupted or the establishment of such minimum prices has a material
adverse effect on trading in, or the issuance and sale of, such APM
Qualifying Securities;
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•
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the
Corporation is required to obtain the consent or approval of its
stockholders or a regulatory body (including, without limitation,
a
securities exchange) or governmental authority to issue or sell APM
Qualifying Securities and it fails to obtain such consent or approval
notwithstanding its commercially reasonable efforts to obtain such
consent
or approval;
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•
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a
banking moratorium shall have been declared by the federal or state
authorities of the United States such that market trading in any
of the
APM Qualifying Securities has been materially disrupted or
ceased;
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I-11
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•
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a
material disruption shall have occurred in commercial banking or
securities settlement or clearance services in the United States
such that
market trading in any of the APM Qualifying Securities has been materially
disrupted or ceased;
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•
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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 any of the APM Qualifying
Securities has been materially disrupted or
ceased;
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•
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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, or the effect
of
international conditions on the financial markets in the United States
shall be such that trading in any of the APM Qualifying Securities
has
been materially disrupted;
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•
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an
event occurs and is continuing as a result of which the offering
document
for the offer and sale of APM Qualifying Securities would, in the
Corporation’s reasonable judgment, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
in
that offering document or necessary to make the statements in that
offering document not misleading and either (a) the disclosure of
that
event, in the Corporation’s reasonable judgment, would have a material
adverse effect on its business or (b) the disclosure relates to a
previously undisclosed proposed or pending material business transaction,
the disclosure of which would impede its ability to consummate that
transaction; provided
that one or more events described under this bullet point
shall not constitute a market disruption event with respect to more
than
90 days in any 180-day period; or
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•
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the
Corporation reasonably believes that the offering document for the
contemplated offer and sale of registered APM Qualifying Securities
would
not be in compliance with a rule or regulation of the SEC, for reasons
other than those referred to in the preceding bullet point, and the
Corporation determines that it is unable to comply with such rule
or
regulation or such compliance is unduly burdensome; provided
that no single suspension contemplated by this bullet
point
may exceed 90 days in any 180-day
period.
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I-12
“Market
Value” means, on any date, (i) in the case of Common Stock, 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 New York Stock Exchange or, if the
Common Stock is not then listed on the New York 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 midpoint 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 by the Corporation for this purpose and (ii) in the
case
of Rights to acquire Common Stock, a value determined by a nationally recognized
independent investment banking firm selected by the Corporation’s Board of
Directors (or a duly authorized committee thereof) for this
purpose.
“Measurement
Date” means, with respect to any payment, redemption or purchase
of ECAPSSM (a)
on or prior to June 1, 2012, the date that is 180 days prior to delivery of
notice of such payment or redemption or prior to the date of such purchase
and
(b) after June 1, 2012, the date that is 90 days prior to delivery of notice
of
such payment or redemption or prior to the date of such purchase.
“Measurement
Period” means the period from a Measurement Date to the related
notice date or purchase date. Measurement Periods cannot run
concurrently.
“NRSRO”
means a nationally recognized statistical rating organization within the meaning
of Section 3(a)(62) under the Exchange Act.
“Optional
Deferral Provision” means, as to any securities, a provision in
the terms thereof or of the related transaction agreements that contains the
following: (a) 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 five years or, if a Market Disruption
Event is continuing, ten years, without any remedy other than Permitted Remedies
and (b) an Alternative Payment Mechanism.
“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
I-13
(b)
complete or partial prohibitions preventing the issuer from paying Distributions
on or purchasing 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 for Common
Equity) 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 redemption, repayment or purchase of ECAPSSM on or prior
to the
date that is 50 years prior to the Final Maturity Date:
(A)
securities issued by the Corporation or its Subsidiaries that (1) rank pari
passu with or junior to the ECAPSSM
upon the
liquidation, dissolution or winding-up of the Corporation, (2) have no maturity
or a maturity of at least 55 years and (3)(a) are subject to a replacement
capital covenant substantially similar to this Replacement Capital Covenant
and
have a Ten-Year Optional Deferral Provision or (b) have a Mandatory Trigger
Provision and an Optional Deferral Provision;
(B)
securities issued by the Corporation or its Subsidiaries that (1) rank pari
passu with 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
Intent-Based Replacement Disclosure and (4) have a Mandatory Trigger Provision
and an Optional Deferral Provision;
(C)
securities issued by the Corporation or its Subsidiaries that (1) would rank
junior to all of the senior and subordinated debt of the Corporation other
than
the ECAPSSM, (2)
have a Mandatory Trigger Provision and an Optional Deferral Provision and (3)
have no maturity or a maturity of at least 55 years and are subject to
Intent-Based Replacement Disclosure;
I-14
(D)
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)(a) has no maturity or a
maturity of at least 55 years and (b) is subject to a replacement capital
covenant substantially similar to this Replacement Capital Covenant;
or
(E)
Qualifying Non-Cumulative Preferred Stock; or
(ii)
in connection with any repayment, redemption or purchase of ECAPSSM after the
date that
is 50 years prior to the Final Maturity Date and on or prior to the date that
is
15 years prior to the Final Maturity Date:
(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 ECAPSSM
upon a liquidation,
dissolution or winding-up of the Corporation, (2) have a Ten-Year Optional
Deferral Provision, (3) have no maturity or a maturity of at least 55 years
and
(4) are subject to Intent-Based Replacement Disclosure;
(C)
securities issued by the Corporation or its Subsidiaries that (1) rank pari
passu with or junior to the ECAPSSM
upon a liquidation,
dissolution or winding-up of the Corporation, (2) have a Ten-Year Optional
Deferral Provision and (3) have no maturity or a maturity of at least 55 years
and 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 ECAPSSM
upon a liquidation,
dissolution or winding-up of the Corporation, (2) have no maturity or a maturity
of at least 40 years and (3)(a) have a Ten-Year Optional Deferral Provision
and
are subject to a replacement capital covenant substantially similar to this
Replacement Capital Covenant or (b) have a Mandatory Trigger Provision and
an
Optional Deferral Provision; or
(E)
other securities issued by the Corporation or its Subsidiaries that (1) rank
upon a liquidation, dissolution or winding-up of the Corporation either (a)
pari
passu with or junior to the ECAPSSM
or (b) pari
passu
with the claims of the Corporation’s trade creditors and junior to
all of the Corporation’s
I-15
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 (2) either (a) have no maturity or a
maturity of at least 40 years, are subject to Intent-Based Replacement
Disclosure and have a Mandatory Trigger Provision and an Optional Deferral
Provision or (b) have no maturity or a maturity of at least 25 years, are
subject to a replacement capital covenant substantially similar to this
Replacement Capital Covenant and have a Mandatory Trigger Provision and an
Optional Deferral Provision.
“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, that
the transaction documents provide for no remedies as a consequence of
non-payment of dividends other than Permitted Remedies and is either (a) subject
to a replacement capital covenant substantially similar to this Replacement
Capital Covenant or (b) has a provision that prohibits distributions upon the
issuer’s failure to satisfy one or more financial tests set forth in the terms
of the preferred stock and is subject to Intent-Based Replacement
Disclosure.
“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 pay or purchase, such Covered
Debt
either in whole or in part with the consequence that after giving effect to
such
redemption, payment or purchase the outstanding principal amount of such Covered
Debt is less than $100,000,000, the applicable redemption, payment or purchase
date and (c) if such Covered Debt is not Eligible Subordinated Debt, the date
on
which the Corporation issues long-term indebtedness for money borrowed that
is
Eligible Subordinated Debt.
“Replacement
Capital Covenant” has the meaning specified in the introduction
to this instrument.
“Replacement
Capital Securities”
means,
(i)
Common Stock and Rights to acquire Common Stock (including Common Stock and
Rights to acquire Common Stock issued pursuant to the Corporation’s dividend
reinvestment plan, direct stock purchase plan or employee benefit
plans);
(ii)
Mandatorily Convertible Preferred Stock;
I-16
(iii)
Debt Exchangeable for Common Equity;
(iv)
Debt
Exchangeable for Preferred Equity; and
(v)
Qualifying
Capital Securities.
“Rights
to acquire Common Stock” means net share settled warrants to purchase
Common Stock that have an exercise price at least 10% above the current stock
market price of the issuer’s Common Stock as of their date of issuance, that do
not entitle the issuer to redeem for cash and the holders of such warrants
are
not entitled to require the issuer to repurchase for cash in any
circumstance.
“Subsidiary”
means, with respect to any Person, at any time, any corporation, limited
liability company, partnership or other entity, 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 corporation, limited liability
company, partnership or other entity 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
such Person.
“Supplemental
Indenture” means, the Supplemental Indenture, dated as of May
25, 2007, between the Corporation and The Bank of New York Trust Company, N.A.,
as Trustee, relating to the ECAPSSM.
“Ten-Year
Optional Deferral Provision” means, as to any securities, a
provision in the terms thereof or of the related transaction agreements to
the
effect that the issuer of such securities thereof 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 ten years without any remedy
other than Permitted Remedies.
“Termination
Date” has the meaning specified in Section 4(a).
“Trust”
means a trust, the common securities of which are held directly or indirectly
by
the Corporation.
I-17
