Exhibit 4.1
FIRST SUPPLEMENTAL JUNIOR SUBORDINATED INDENTURE
BETWEEN
AMERIPRISE FINANCIAL, INC.
AND
U.S. BANK NATIONAL ASSOCIATION
AS TRUSTEE
----------------------------------------
DATED AS OF MAY 26, 2006
----------------------------------------
7.518% JUNIOR SUBORDINATED NOTES DUE 2066
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.........................................................1
Section 1.01 Definition of Terms...........................................1
ARTICLE II TERMS OF THE NOTES................................................10
Section 2.01 Designation and Principal Amount.............................10
Section 2.02 Issue Date; Maturity.........................................10
Section 2.03 Place of Payment and Surrender for Registration of Transfer..10
Section 2.04 Registered Securities; Form; Denominations; Depositary.......10
Section 2.05 Interest.....................................................11
Section 2.06 Optional Deferral Of Interest................................12
Section 2.07 Mandatory Deferral of Interest...............................13
Section 2.08 Deferral of Interest in General..............................16
Section 2.09 Right to Optional Redemption by the Company..................16
Section 2.10 Events of Default............................................17
Section 2.11 Covenant Defaults............................................17
Section 2.12 Designation of Depositary....................................19
Section 2.13 Conversion...................................................19
Section 2.14 Definitive Form of Notes.....................................19
Section 2.15 Company Reports..............................................19
Section 2.16 Modification of Indenture....................................19
Section 2.17 Other........................................................19
ARTICLE III COVENANTS........................................................19
Section 3.01 Limitation on Company Payments...............................19
Section 3.02 Alternative Coupon Satisfaction Mechanism....................20
ARTICLE IV SUBORDINATION.....................................................21
Section 4.01 Senior Indebtedness..........................................21
ARTICLE V MISCELLANEOUS......................................................22
Section 5.01 Meetings and Voting..........................................22
Section 5.02 Ratification of Indenture....................................23
Section 5.03 Trustee Not Responsible for Recitals.........................23
Section 5.04 Governing Law................................................23
Section 5.05 Severability.................................................23
Section 5.06 Counterparts.................................................23
Section 5.07 Successors and Assigns.......................................23
Exhibit A
FIRST SUPPLEMENTAL JUNIOR SUBORDINATED INDENTURE, dated as of May 26, 2006
(this "FIRST SUPPLEMENTAL INDENTURE"), between AMERIPRISE FINANCIAL, INC., a
Delaware corporation (the "COMPANY"), having its principal executive office at
000 0xx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as trustee (the "TRUSTEE"), having
its principal corporate trust office at 00 Xxxxxxxxxx Xxxxxx, Xx. Xxxx,
Xxxxxxxxx 00000-0000 supplementing the Junior Subordinated Indenture, dated as
of May 5, 2006, between the Company and the Trustee (the "BASE INDENTURE,"
together with this First Supplemental Indenture, the "INDENTURE").
The Company executed and delivered the Base Indenture to the Trustee to
provide for the issuance from time to time of its junior subordinated notes,
debentures, bonds or other evidences of indebtedness (hereinafter generally
called the "DEBT SECURITIES," and individually, a "DEBT SECURITY") to be issued
in one or more series as might be determined by the Company under the Base
Indenture, in an unlimited aggregate principal amount which may be authenticated
and delivered as provided in the Base Indenture;
Pursuant to the terms of this First Supplemental Indenture, the Company
desires to provide for the establishment of a new series Debt Securities to be
known as the "7.518% Junior Subordinated Notes due 2066" (the "NOTES"), the form
and substance of such Notes and the terms, provisions and conditions thereof to
be as set forth in the Indenture;
The Company has requested that the Trustee execute and deliver this First
Supplemental Indenture. All requirements necessary to make this First
Supplemental Indenture a valid instrument in accordance with its terms (and to
make the Notes, when duly executed by the Company and duly authenticated and
delivered by the Trustee, the valid and enforceable obligations of the Company)
have been performed, and the execution and delivery of this First Supplemental
Indenture have been duly authorized in all respects.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of Notes by the
Holders thereof, it is mutually covenanted and agreed, for the equal and
proportional benefit of all Holders of Notes, as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITION OF TERMS.
Unless the context otherwise requires:
(a) a term not defined herein that is defined in the Base Indenture has the
same meaning when used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has the
same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) unless otherwise specified, any reference to a Section or Article is to
a Section or Article of this First Supplemental Indenture;
(e) headings are for convenience of reference only and do not affect
interpretation;
(f) any reference herein to an agreement entered into in connection with
the issuance of securities contemplated therein as of May 26, 2006 shall mean
such agreement as it may be amended, modified or supplemented in accordance with
its terms; and
(g) the following terms have the following meanings:
"3-MONTH LIBOR" means, with respect to an Interest Payment Period, the rate
(expressed as a percentage per year) for deposits in U.S. dollars for a 3-month
period that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the
second London Banking Day immediately preceding the first day of such Interest
Payment Period. The term "Telerate Page 3750" means the display on MoneyLine
Telerate page 3750 or any successor service or page for the purpose of
displaying the London interbank offered rates of major banks. If 3-Month LIBOR
cannot be determined as described above, the Company shall select four major
banks in the London interbank market and shall request that the principal London
offices of those four selected banks provide their offered quotations to prime
banks in the London interbank market at approximately 11:00 a.m., London time,
on the second London Banking Day immediately preceding the first day of the
applicable Interest Payment Period. These quotations will be for deposits in
U.S. dollars for a 3-month period. Offered quotations must be based on a
principal amount equal to an amount that is representative of a single
transaction in U.S. dollars in the market at the time. If two or more quotations
are provided, 3-Month LIBOR for the Interest Payment Period will be the
arithmetic mean of those quotations. If fewer than two quotations are provided,
the Company will select three offered rates quoted by three major banks in New
York City, on the second London Banking Day immediately preceding the first day
of the applicable Interest Payment Period. The rates quoted will be for loans in
U.S. dollars, for a 3-month period. Rates quoted must be based on a principal
amount equal to an amount that is representative of a single transaction in U.S.
dollars in the market at the time. If fewer than three New York City banks
selected by the Company are quoting rates, 3-Month LIBOR for the applicable
interest payment period will be the same as for the immediately preceding
Interest Payment Period or, if a Fixed Rate of interest applies to such
immediately preceding Interest Payment Period, the same as for the most recent
fiscal quarter for which 3-month LIBOR can be determined.
"ADJUSTED STOCKHOLDERS' EQUITY AMOUNT" means, as of any fiscal quarter end,
the stockholders' equity of the Company as reflected on the Company's
consolidated GAAP balance sheet as of such fiscal quarter end, minus (i)
accumulated other comprehensive income as reflected on such consolidated balance
sheet and (ii) any increase in stockholders' equity resulting from the issuance
of preferred stock during such quarter.
"ALTERNATIVE COUPON SATISFACTION MECHANISM has the meaning set forth in
Section 3.02(a).
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"ANNUAL STATEMENT" means, as to a Life Insurance Subsidiary, the annual
statement of such Life Insurance Subsidiary containing its statutory balance
sheet and income statement as required to be filed by it with one or more state
insurance commissioners or other state insurance regulatory authorities.
"AUTHORIZED CONTROL LEVEL" has the meaning specified in subsection J of
Section 1 (or the relevant successor section, if any) of the Model Act.
"BANKRUPTCY DEFAULT" means an Event of Default specified in clause (e) or
(f) of Section 7.01 of the Base Indenture.
"BASE INDENTURE" has the meaning set forth in the Recitals.
"BENCHMARK QUARTER" has the meaning set forth in Section 2.07(b)(ii).
"BUSINESS DAY" means any day which is not a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies located in New
York City are authorized or obligated by law to close.
"CALCULATION AGENT" means U.S. Bank National Association, or such other
Person as is appointed by the Company in its place.
"COMMERCIALLY REASONABLE EFFORTS" by the Company to sell Common Stock means
commercially reasonable efforts to complete the offer and sale of the Common
Stock to third parties that are not Subsidiaries of the Company in public
offerings or private placements; provided, that the Company shall be deemed to
have used made Commercially Reasonable Efforts during a Market Disruption Event
regardless of whether the Company makes any offers or sales during such Market
Disruption Event. For the avoidance of doubt, the Company will not be considered
to have used Commercially Reasonable Efforts to effect a sale of Qualifying
Securities, other than during a Market Disruption Event, if the Company
determines to not pursue or complete such sale solely due to pricing
considerations.
"COMMISSION" means the United States Securities and Exchange Commission.
"COMMON STOCK" means the common stock of the Company, par value $0.01 per
share.
"COMPANY" has the meaning set forth in the Recitals.
"COMPANY ACTION LEVEL" has the meaning specified in subsection J of Section
1 (or the relevant successor section, if any) of the Model Act.
"COMPARABLE TREASURY ISSUE" means the U.S. Treasury security selected by
the Quotation Agent as having a term comparable to the period from the
Redemption Date to June 1, 2016 that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities with a term comparable to such period.
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"COMPARABLE TREASURY PRICE" means, with respect to a Redemption Date (1)
the average of five Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest Reference Treasury Dealer
Quotations or (2) if the Quotation Agent obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such quotations.
"COMPOUNDED INTEREST" means additional interest on any accrued and unpaid
interest to the extent permitted by applicable law, at the from time to time
then applicable Fixed Rate compounded semi-annually, or at the from time to time
then applicable Floating Rate compounded quarterly, as the case may be.
"COVENANT DEFAULT" means a default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture (other than an Event of
Default as defined in Section 2.10 hereof or a covenant or warranty that has
been included solely for the benefit of Debt Securities of another series), and
a continuance of such default or breach for a period of 90 days after there has
been given, by registered or certified mail, to the Company by the Trustee, or
to the Company and the Trustee by the Holders of a majority in principal amount
of the Outstanding Debt Securities of such series, a written notice specifying
such default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default."
"COVERED LIFE INSURANCE SUBSIDIARIES" means, as of any year end, Life
Insurance Subsidiaries that account for 80% or more of the combined general
account admitted assets of the Company's Life Insurance Subsidiaries as of such
year end. The Company's Covered Life Insurance Subsidiaries as of a year end
will be identified by first ranking the Life Insurance Subsidiaries of the
Company from largest to smallest based upon the amount of each such Life
Insurance Subsidiary's general account admitted assets and then, beginning with
the Life Insurance Subsidiary that has the largest amount of general account
admitted assets as of such year end, identifying such Life Insurance
Subsidiaries as Covered Life Insurance Subsidiaries until the ratio of the
combined general account admitted assets of the Life Insurance Subsidiaries so
identified to the combined general account admitted assets of all of the Life
Insurance Subsidiaries as of such year end equals or exceeds 80%.
"DEBT SECURITIES" or "DEBT SECURITY" has the meaning set forth in the
Recitals.
"DTC" means The Depository Trust Company, a New York corporation, and its
successors.
"EXTENSION PERIOD" means an Optional Extension Period or a Trigger Period
or a combination thereof, whether or not consecutive. An Extension Period shall
commence of the first Interest Payment Date on which interest is deferred
(whether due to an optional deferral or the occurrence of a Trigger Event) and
will not be considered terminated until the first date thereafter when all
accrued and unpaid interest, together with any compounded interest, has been
paid in full.
"FIRST SUPPLEMENTAL INDENTURE" has the meaning set forth in the Recitals.
"FIXED RATE" has the meaning set forth in Section 2.05(a)(i).
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"FIXED RATE INTEREST PAYMENT DATE" has the meaning set forth in Section
2.05(a)(i).
"FIXED RATE PERIOD" means from the date of initial issuance to June 1,
2016.
"FLOATING RATE" has the meaning set forth in Section 2.05(b).
"FLOATING RATE INTEREST PAYMENT DATE" has the meaning set forth in Section
2.05(b).
"FLOATING RATE PERIOD" means the period from June 1, 2016 to the Stated
Maturity.
"FOREGONE INTEREST" has the meaning set forth in Section 2.07(f).
"GAAP" means, at any date or for any period, U.S. generally accepted
accounting principles as in effect on such date or for such period.
"GLOBAL NOTE" has the meaning set forth in Section 2.04(a).
"H.15(519)" means the weekly statistical release designated as such, or any
successor publication, published by the Federal Reserve System Board of
Governors, available through the world-wide-web site of the Board of Governors
of the Federal Reserve System at XXXX://XXX.XXXXXXXXXXXXXX.XXX/XXXXXXXX/X00/ or
any successor site or publication.
"INDENTURE" has the meaning set forth in the Recitals.
"INTEREST PAYMENT DATE" means a Fixed Rate Interest Payment Date or a
Floating Rate Interest Payment Date.
"INTEREST PAYMENT PERIOD" means, during the Fixed Rate Period, any
semi-annual period, and during the Floating Rate Period, any quarterly period,
during which interest accrues pursuant to this Indenture.
"LIFE INSURANCE SUBSIDIARY" means any of the Company's subsidiaries that is
organized under the laws of any state in the United States and is licensed as a
life insurance company in any state in the United States but does not include
any subsidiary of a Life Insurance Subsidiary.
"LONDON BANKING DAY" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"MAKE-WHOLE REDEMPTION AMOUNT" will be equal to the greater of:
(i) the principal amount of the Notes then outstanding; and
(ii) the sum of the present value of the aggregate principal amount
outstanding of the Notes on the Interest Payment Date falling on June 1,
2016 together with the present values of scheduled semi-annual interest
payments from
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the date fixed for redemption through and including the Interest Payment
Date on June 1, 2016, in each case discounted to the date fixed for
redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus (x) in the case of a Tax
Event, 50 basis points, and (y) in the case of a redemption for any other
reason, 40 basis points,
plus, in each of cases (i) and (ii), any accrued and unpaid interest,
together with any Compounded Interest to the date of redemption, as
calculated by the Quotation Agent.
"MANDATORILY DEFERRED INTEREST" means all interest deferred pursuant to
Section 2.07, as then accrued and unpaid, together with Compounded Interest
thereon, if any.
"MARKET DISRUPTION EVENT" means the occurrence or existence of any of the
following events or sets of circumstances:
(i) the Company is required to obtain the consent or approval of its
shareholders or a regulatory body (including, without limitation, any
securities exchange) or governmental authority to issue common stock and
such consent or approval has not yet been obtained despite the Company's
Commercially Reasonable Efforts to obtain such consent or approval;
(ii) trading in securities generally on the New York Stock Exchange,
the American Stock Exchange, the Nasdaq Stock Market, or trading in any
securities of the Company (or any options or futures contracts related to
the securities of the Company) on any exchange or in the over-the-counter
market is suspended or the settlement of such trading generally is
materially disrupted or minimum prices are established on any such exchange
or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction;
(iii) a material disruption or banking moratorium shall have occurred
in commercial banking or securities settlement or clearance services in the
United States;
(iv) there is 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, as to make it, in the Company's judgment, impracticable to
proceed with the offer and sale of capital stock; or
(v) an event occurs and is continuing as a result of which the
offering document for such offer and sale of securities would, in the
judgment of the Company, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and either (1) the disclosure of
that event at such time, in the judgment of the Company, would have a
material adverse effect on the business of the
6
Company or (2) the disclosure relates to a previously undisclosed proposed
or pending material business transaction, the disclosure of which would
impede the ability of the Company to consummate such transaction, provided
that no single suspension period contemplated by this subsection (v) may
exceed 90 consecutive days and multiple suspension periods contemplated by
this subsection (v) may not exceed an aggregate of 180 days in any 360-day
period.
"MODEL ACT" means the NAIC Risk-Based Capital for Insurers Model Act as
included in the NAIC's Model Laws, Regulations and Guidelines as of May 26, 2006
and as hereinafter amended, modified or supplemented.
"NAIC" means the National Association of Insurance Commissioners.
"NOTES" or "NOTE" has the meaning set forth in the Recitals.
"OPINION OF COUNSEL" means the written opinion of counsel rendered by an
independent law firm which shall be reasonably acceptable to the Trustee.
"OPTIONAL EXTENSION PERIOD" has the meaning set forth in Section 2.06(a).
"OPTIONALLY DEFERRED INTEREST" means all interest deferred pursuant to
Section 2.06, as then accrued and unpaid, together with Compounded Interest
thereon, if any.
"PAR REDEMPTION AMOUNT" means a cash redemption price of 100% of the
principal amount of the Notes to be redeemed, plus accrued and unpaid interest,
together with Compounded Interest thereon, to the Redemption Date.
"PARITY DEBT SECURITIES" means debt securities that rank pari passu with
the Notes.
"PARITY GUARANTEES" means guarantees that rank pari passu with the Notes.
"PAYING AGENT" shall initially be U.S. Bank National Association. The
Company may change the Paying Agent without notice to any Holder.
"PRIMARY TREASURY DEALER" means a primary U.S. government securities dealer
in New York City.
"QUALIFYING SECURITIES" means (i) the capital stock of the Company or (ii)
other securities or combinations of securities which, as determined in good
faith by the Company's board of directors, rank equally with or junior to the
Notes and have a term of comparable duration, comparable deferral features and
replacement intent provisions comparable to those of the Notes, except that if
the Company issues securities to any of its subsidiaries, such securities will
be deemed to be Qualifying Securities only if such subsidiary receives net
proceeds in an equal or greater amount from the contemporaneous issuance to a
person other than the Company or its other subsidiaries of securities having the
characteristics described above, as determined in good faith by the Company's
board of directors.
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"QUOTATION AGENT" means one of the Reference Treasury Dealers appointed by
the Company.
"RBC INSTRUCTIONS" means the risk-based capital report including risk-based
capital instructions adopted by the NAIC, as these risk-based capital
instructions may be amended by the NAIC from time to time in accordance with the
procedures adopted by the NAIC.
"REFERENCE TREASURY DEALER" means (1) Xxxxxx Brothers Inc. and (2) any
additional Primary Treasury Dealers selected by the Company and their
successors; provided, however, that if any of them ceases to be a Primary
Treasury Dealer the Company will substitute therefor another Primary Treasury
Dealer.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Quotation Agent, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Quotation Agent at 5:00 p.m., New York City time, on the third
Business Day preceding such Redemption Date.
"REGULAR RECORD DATE" has the meaning set forth in Section 2.05(f).
"RISK-BASED CAPITAL RATIO" means the ratio calculated from the reports by
insurance companies to their regulators as of the end of each year in accordance
with prescribed procedures, as in effect from time to time. The ratio measures
the relationship of Total Adjusted Capital relative to Company Action Level. For
all Covered Life Insurance Subsidiaries, calculated on a combined basis, this
ratio equals the sum of Total Adjusted Capital amounts for Covered Life
Insurance Subsidiaries divided by the sum of Company Action Level amounts for
those same subsidiaries.
"SECURITY REGISTRAR" shall initially be U.S. Bank National Association. The
Company may change the Security Registrar without notice to any Holder.
"SENIOR INDEBTEDNESS" has the meaning set forth in Section 4.01.
"SHARE CAP AMOUNT" has the meaning set forth in Section 3.02(b).
"STATED MATURITY" has the meaning set forth in Section 2.02.
"TAX EVENT" means the receipt by the Company of an Opinion of Counsel,
rendered by a law firm with experience in such matters, to the effect that, as a
result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations or (c) a threatened challenge asserted in connection with an
audit of the Company or any of its Subsidiaries, or a threatened challenge
asserted in writing against any other taxpayer that has raised capital through
the issuance of securities that are substantially similar to the Notes, which
amendment or change is effective or which pronouncement or decision is announced
or which challenge occurs on or after the date of issuance the Notes, there is
more than an insubstantial increase in the risk that interest accruing or
payable by the
8
Company on the Notes is not, or at any time subsequent to the Company's receipt
of such Opinion of Counsel, shall not be, wholly deductible by Company for
United States federal income tax purposes.
"TIA COVENANT DEFAULT" means a Covenant Default resulting from a breach of
the provisions of Section 9.04 of the Base Indenture to the extent such
provisions are mandated by the Trust Indenture Act of 1939, as amended.
"TOTAL ADJUSTED CAPITAL" means the sum of (1) an insurer's statutory
capital and surplus as determined in accordance with the statutory accounting
applicable to the annual financial statements required to be filed by the
Covered Life Insurance Subsidiary under applicable laws and regulations; and (2)
such other items, if any, as the RBC Instructions may provide.
"TRAILING FOUR QUARTERS CONSOLIDATED NET INCOME AMOUNT" means, for any
fiscal quarter, the sum of the Company's consolidated GAAP net income for the
four fiscal quarters ending as of the last day of such fiscal quarter.
"TREASURY RATE" means the yield, under the heading that represents the
average for the week immediately prior to the applicable Redemption Date,
appearing in the most recently published statistical release designated
"H.15(519)" or any successor publication that is published weekly by the Board
of Governors of the Federal Reserve System and that establishes yields on
actively traded U.S. Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or after
the end of the relevant Interest Payment Period, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue will be
determined and the Treasury Rate will be interpolated or extrapolated from such
yields on a straight line basis, rounding to the nearest month). If such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, "Treasury Rate" means the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date. The Treasury Rate will be
calculated on the third Business Day preceding the Redemption Date.
"TRIGGER DETERMINATION DATE" has the meaning set forth in Section 2.07(b).
"TRIGGER EVENT" has the meaning set forth in Section 2.07(b).
"TRIGGER PERIOD" has the meaning set forth in Section 2.07(a).
"TRUSTEE" has the meaning set forth in the Recitals.
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ARTICLE II
TERMS OF THE NOTES
Pursuant to Section 3.01 of the Base Indenture, the Notes are hereby
established with the following terms and other provisions:
Section 2.01 DESIGNATION AND PRINCIPAL AMOUNT. (a)There is hereby
authorized a series of Debt Securities designated the "7.518% Junior
Subordinated Notes due 2066," in the initial aggregate principal amount of
$500,000,000.
(b) The Company may, from time to time, subject to compliance with any
other applicable provisions of this Indenture but without the consent of the
Holders, create and issue pursuant to this Indenture an unlimited principal
amount of additional Notes (in excess of any amounts theretofore issued) having
the same terms and conditions to those of the other outstanding Notes, except
that any such additional Notes (i) may have a different issue date and issue
price from other outstanding Notes and (ii) may have a different amount of
interest payable on the first Interest Payment Date after issuance than is
payable on other outstanding Notes. Such additional Notes shall constitute part
of the same series of Notes hereunder, unless any such adjustment pursuant to
this Section 2.01(b) shall cause such additional Notes to constitute, as
determined pursuant to an Opinion of Counsel, a different class of securities
than the original series of Notes for U.S. federal income tax purposes.
Section 2.02 ISSUE DATE; MATURITY. The Notes shall be issued as of May
26, 2006; and the stated maturity of the principal amount of the Notes shall be
June 1, 2066 (the "STATED MATURITY").
Section 2.03 PLACE OF PAYMENT AND SURRENDER FOR REGISTRATION OF TRANSFER.
Payment of principal of (and premium, if any) and interest on Notes shall be
made, the transfer of Notes will be registrable and Notes will be exchangeable
for Notes of other denominations of a like principal amount at the office or
agency of the Company maintained for such purpose, initially the Corporate Trust
Office of the Trustee. Payment of any principal (and premium, if any) and
interest on Notes issued as Global Notes shall be payable by the Company through
the Paying Agent to the Depositary in immediately available funds. At the
Company's option, interest on Notes issued in physical form may be payable (i)
by a U.S. Dollar check drawn on a bank in The City of New York mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register, or (ii) upon application to the Security Registrar not later
than the relevant Regular Record Date by a Holder of a principal amount of the
Notes in excess of $5,000,000, by wire transfer in immediately available funds,
which application shall remain in effect until the Holder notifies, in writing,
the Security Registrar to the contrary.
Section 2.04 REGISTERED SECURITIES; FORM; DENOMINATIONS; DEPOSITARY. (a)The
Notes shall be issued in fully registered form as Registered Securities and
shall be initially issued in the form of one or more permanent Global Notes (the
"GLOBAL NOTES"), in the form of Exhibit A hereto. The Notes shall not be
issuable in bearer form. The terms and provisions contained in the form of Note
shall constitute, and are hereby expressly made, a part of the Indenture, and
the
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Company and the Trustee, by their execution and delivery of the Indenture,
expressly agree to such terms and provisions and to be bound thereby.
(b) The Notes shall be issued in denominations of $1,000 and whole
multiples thereof.
Section 2.05 INTEREST.
(a) FIXED RATE PERIOD. (i) Subject to the provisions of Section 2.06,
Section 2.07 and Section 2.08, during the Fixed Rate Period, the Notes shall
accrue interest at a rate per annum of 7.518% (the "FIXED RATE") of the
principal amount of $1,000 per Note, payable semi-annually in arrears on June 1
and December 1 of each year (each, a "FIXED RATE INTEREST PAYMENT DATE"),
commencing on December 1, 2006, to the Person in whose name the Note is
registered in the Security Register at the close of business on the Regular
Record Date.
(ii) The amount of interest payable for any Interest Payment Period
during the Fixed Rate Period will be computed as follows:
(A) for any full Interest Payment Period, on the basis of a
360-day year of twelve 30-day months;
(B) for any period shorter than a full Interest Payment Period,
on the basis of a 30-day month; and
(C) for any period shorter than a 30-day month, on the basis of
the actual number of days elapsed in the 30-day month.
(iii) In the event that any Fixed Rate Interest Payment Date is
not a Business Day, payment of the interest payable on such Fixed Rate
Interest Payment Date shall be made on the next succeeding day that is
a Business Day without any interest or other payment in respect of any
such delay.
(b) FLOATING RATE PERIOD. (i) Subject to the provisions of Section 2.06,
Section 2.07 and Section 2.08, during the Floating Rate Period, the Notes shall
accrue interest at an annual rate of 3-month LIBOR plus a margin equal to 290.5
basis points (the "FLOATING RATE"), payable quarterly in arrears on March 1,
June 1, September 1 and December 1 of each year (each, a "FLOATING RATE INTEREST
PAYMENT DATE"), commencing on June 1, 2016 to the Person in whose name the Note
is registered in the Security Register at the close of business on the
applicable Regular Record Date.
(ii) The amount of Floating Rate interest payable on the Notes for any
Interest Payment Period will be computed on the basis of a 360-day year and
the actual number of days elapsed in the 360-day year.
(iii) If a scheduled Floating Rate Interest Payment Date is not a
Business Day, such Interest Payment Date shall be postponed to the next
succeeding day that is a Business Day; provided that if such Business Day
is in the next succeeding calendar month, such Interest Payment Date shall
be the immediately preceding Business Day.
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(c) PERIOD OF ACCRUAL. Subject to Section 2.05(a)(iii), interest will
accrue from and including the last date in respect of which interest has been
paid or duly provided for to but excluding the Interest Payment Date on which
the interest is actually paid or the Stated Maturity, as the case may be.
(d) DUTIES OF CALCULATION AGENT. The Calculation Agent will calculate the
Floating Rate for the Notes and the amount of interest payable on each Floating
Rate Interest Payment Date. Promptly upon such determination, the Calculation
Agent will notify the Company and, if the Trustee is not then serving as the
Calculation Agent, the Trustee, of the Floating Rate for the new quarterly
Interest Payment Period. The Floating Rate determined by the Calculation Agent,
absent manifest error, will be binding and conclusive on the Company, the
Holders and the Trustee. All percentages resulting from any interest rate
calculation will be rounded upward or downward, as appropriate, to the next
higher or lower one hundred-thousandth of a percentage point.
(e) UNPAID INTEREST. Interest not paid on any Interest Payment Date,
including any interest deferred during any Extension Period, will accrue and
compound at the from time to time then applicable interest rate (whether
semi-annually at the Fixed Rate or quarterly at the Floating Rate, as the case
may be). Subject to Section 2.05(a)(iii), such interest will accrue and compound
to the date that it is actually paid.
(f) REGULAR RECORD DATES. The Regular Record Dates for the Notes shall be:
(i) as long as the Notes remain in book-entry only form or are
represented by a Global Note, the Business Day next preceding the
corresponding Interest Payment Date; or
(ii) if such Notes are issued in definitive form, on such Business Day
selected by the Company that is at least one Business Day prior to the
corresponding Interest Payment Date.
(g) ALLOCATION OF INTEREST PAYMENTS. Any interest payment made (including
any interest payment made pursuant to the Alternative Coupon Satisfaction
Mechanism) will first be allocated to payment of the interest due and payable on
that Interest Payment Date. Any interest payment in excess of the amount of the
interest due and payable on that Interest Payment Date will be applied first
against any then-existing accrued and unpaid interest, in chronological order
beginning with the earliest unpaid Interest Payment Date, and then against any
accrued and unpaid Compounded Interest.
Section 2.06 OPTIONAL DEFERRAL OF INTEREST.
(a) OPTIONAL EXTENSION PERIOD. Subject to Section 2.08 and Section 3.02, as
long as no Event of Default has occurred and is continuing, and as long as no
Trigger Event has occurred and no Trigger Period caused thereby is continuing,
the Company shall have the right at any time and from time to time, to defer
payments of interest on the Notes by extending the Interest Payment Period on
the Notes for a period (an "OPTIONAL EXTENSION PERIOD") not exceeding ten years
following the first Interest Payment Date in such period on which interest was
deferred, during which Optional Extension Period deferred interest on the Notes
shall not be
12
due and payable but will continue to accrue and compound semi-annually or
quarterly, as applicable, to the extent permitted by applicable law, at the then
applicable rate of interest on the notes; provided that no such Optional
Extension Period may end on a date other than an Interest Payment Date or extend
beyond the stated maturity of the Notes.
At the end of any Optional Extension Period, the Company may settle any and
all Optionally Deferred Interest with cash from any source until the date that
is five years following the first Interest Payment Date as of which the Company
commenced an Optional Extension Period on the Notes. Thereafter, subject to the
occurrence of a Market Disruption Event, the Company must immediately and
continuously use its Commercially Reasonable Efforts to sell shares of Common
Stock and to use the proceeds therefrom to pay any outstanding Optionally
Deferred Interest in accordance with the provisions of Section 3.02.
If a Trigger Event occurs after commencement of an Optional Extension
Period, the Optional Extension Period will be deemed suspended for so long as
the Trigger Period is continuing. Once the Trigger Period is no longer
continuing, the right of the Company to optionally defer payment of interest
will continue, subject to the limitations and consequences described herein.
The first Interest Payment Date on which the Company defers the payment of
any interest (whether due to an optional deferral or the occurrence of a Trigger
Event) will commence an Optional Extension Period. This Optional Extension
Period will not be considered terminated until the first date thereafter when
all accrued and unpaid interest, together with any Compounded Interest, has been
paid by the Company. An Optional Extension Period may not, under any
circumstances, extend beyond the tenth anniversary of its commencement or beyond
the stated maturity date of the Notes. When and if an Optional Extension Period
is terminated because the Company has paid in full all accrued and unpaid
interest then owed by the Company, together with any Compounded Interest
thereupon, the Company may commence a new Optional Extension Period, subject to
the requirements of this Section 2.06, there being no limit to the number of
such new Optional Extension Period that the Company may commence.
(b) COVENANTS. During an Optional Extension Period, the Company shall be
subject to the limitations set forth in Section 3.01 of this First Supplemental
Indenture.
(c) NOTICES. The Company shall give notice of its election to defer
payments of interest on the Notes for an Optional Extension Period at least ten
Business Days prior to the first Interest Payment Date during such Optional
Extension Period as follows:
(i) by first class mail, postage prepaid, addressed to the Holders; or
(ii) as to any Global Note registered in the name of DTC or its
nominee, by e-mail, fax, or any other manner as agreed to by the Company
and the Holder of the Global Note.
Copies of any such notice to a Holder, if given by the Company, shall be
mailed to the Trustee at the same time.
Section 2.07 MANDATORY DEFERRAL OF INTEREST.
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(a) TRIGGER PERIOD. Subject to Section 2.08 and Section 3.02, if and to the
extent that a Trigger Event has occurred as of any Trigger Determination Date,
the Company shall defer payments of interest on the Notes beginning on the
Interest Payment Date immediately following such Trigger Determination Date,
thereby extending the Interest Payment Period on the Notes until (but not
including) the first subsequent Interest Payment Date for which no Trigger Event
has occurred as of the Trigger Determination Date applicable to such Interest
Payment Date, but in any event for a period not extending beyond the date which
is ten years following commencement of the applicable Extension Period, or
beyond the Stated Maturity of the Notes (a "TRIGGER PERIOD"), during which
Trigger Period deferred interest on the Notes shall not be due and payable,
except to the extent that any such payment is made using the Alternative Coupon
Satisfaction Mechanism, provided for in Section 3.02.
(b) TRIGGER EVENT. "TRIGGER EVENT" means a determination by the Company
that any of the following conditions exists as of the day that is the thirtieth
day prior to any Interest Payment Date (or, in the event that such date is not a
Business Day, the immediately preceding Business Day) (a "TRIGGER DETERMINATION
DATE"):
(i) the Risk-Based Capital Ratio for all Covered Life Insurance
Subsidiaries, calculated on a combined basis, is less than 175% based on
the most recent annual financial statements that such Covered Life
Insurance Subsidiaries have filed with applicable state insurance
commissioners; or
(ii) (x) the Trailing Four Quarters Consolidated Net Income Amount for
the period ending at the end of the fiscal quarter that ends two fiscal
quarters prior to the most recently completed fiscal quarter prior to such
Trigger Determination Date is zero or a negative amount, and (y) the
Adjusted Stockholders' Equity Amount as of the end of the most recently
completed quarter and as of the end of the fiscal quarter that ends two
quarters prior to such most recently completed fiscal quarter has declined
by 10% or more as compared to the Adjusted Stockholders' Equity Amount at
the end of the fiscal quarter (the "BENCHMARK QUARTER") that is the later
of (1) the quarter ended March 31, 2005 or (2) the quarter that is ten
quarters prior to the most recently completed fiscal quarter.
In the case of a Trigger Event arising under clause (ii) above, the Trigger
Period shall continue until the Company satisfies both of the tests in clauses
(i) and (ii) above as of the Trigger Determination Date applicable to any
subsequent Interest Payment Date, and the Company's Adjusted Stockholders'
Equity Amount has increased, or has declined by less than 10%, in either case as
compared to the Adjusted Stockholders' Equity Amount at the end of the Benchmark
Quarter with respect to the Trigger Period for which interest payment
restrictions were imposed under clause (ii) above.
(c) CHANGES IN GAAP. If, because of a change in GAAP that results in a
cumulative effect of a change in an accounting principle or a restatement, (i)
the Company's consolidated net income is higher or lower than it would have been
absent such change, then, for purposes of the calculations described in
paragraph (b)(ii) of this Section 2.07, commencing with the fiscal quarter for
which such change in GAAP becomes effective, such consolidated net income shall
be calculated on a pro forma basis as if such change had not occurred or (ii)
the Adjusted
14
Stockholders' Equity Amount as of a fiscal quarter end is higher or lower than
it would have been absent such change, then, for purposes of the calculations
described in paragraph (b)(ii) of this Section 2.07, commencing with the fiscal
quarter for which such change in GAAP becomes effective, the Adjusted Common
Stockholders' Equity Amount shall be calculated on a pro forma basis as if such
change had not occurred.
(d) CHANGES IN THE MODEL ACT. If a change in the Model Act results in (1) a
change in the mathematical relationship between the Company Action Level and the
Authorized Control Level, or (2) any similar recalibration or re-scaling of the
levels of Total Adjusted Capital that a life insurance company must possess in
order to avoid triggering particular company action or regulatory action
(whether mandatory or authorized) under the Model Act, then for purposes of
making the calculations described in clause (i) of the definition of "Trigger
Event," commencing with the first year for which such change becomes effective,
the conditions for the occurrence of a Trigger Event will be changed to
correspondingly adjust the 175% Risk-Based Capital Ratio set forth in such
clause (i), as determined and verified by a nationally recognized independent
actuarial consulting firm that is designated by a nationally recognized
accounting firm that is not the independent registered public accounting firm
that is the Company's auditors at the time of such designation.
(e) COVENANTS. During a Trigger Period, the Company shall be subject to the
limitations set forth in Section 3.01 and Section 3.02 of this First
Supplemental Indenture.
(f) FOREGONE INTEREST. By acquiring a Note or an interest therein, each
Holder or beneficial owner of a Note, as the case may be, agrees that in the
event of a Bankruptcy Default prior to the Stated Maturity or redemption of the
Notes, any unpaid Mandatorily Deferred Interest in excess of 25% of the then
outstanding principal amount of such Holder's Note (or the portion of such Note
in which such beneficial owner holds an interest) (the "FOREGONE INTEREST")
shall not be due and payable and no Holder or beneficial owner will have any
claim for, and thus any right to receive, such Foregone Interest.
(g) PAYMENT OF MANDATORILY DEFERRED INTEREST. Mandatorily Deferred Interest
on the Notes may only be satisfied using the Alternative Coupon Satisfaction
Mechanism except upon an Event of Default, in which case such Mandatorily
Deferred Interest may be satisfied without regard to the Alternative Coupon
Satisfaction Mechanism. In the event that a Trigger Period is no longer
continuing, subsequent interest may be paid in cash without regard to the
Alternative Coupon Satisfaction Mechanism.
(h) NOTICES. By not later than the 15th day prior to each Interest Payment
Date for which the Interest Payment Period is being extended by reason of a
Trigger Event, the Company shall give notice of such Trigger Period as follows:
(i) by first class mail, postage prepaid, addressed to the Holders; or
(ii) as to any Global Note registered in the name of DTC or its
nominee, by e-mail, fax, or any other manner as agreed to by the Company
and the Holder of the Global Note.
15
Copies of any such notice to a Holder, if given by the Company, shall be
mailed to the Trustee at the same time.
Such notice, in addition to stating that interest payments will be
deferred, shall set forth (x) the Risk-Based Capital Ratio for any relevant
Covered Life Insurance Subsidiary, if the Trigger Event has been triggered by
the test set forth in Section 2.07(b)(i) hereof, or (y) the Trailing Four
Quarters Consolidated Net Income Amount and the Adjusted Stockholders' Equity
Amount for the relevant periods and dates, if the Trigger Event has been
triggered by the test set forth in Section 2.07(b)(ii) hereof, and, in either
case, (z) the amount by which the Risk-Based Capital Ratio or the Adjusted
Stockholders' Equity Amount, as the case may be, must increase in order for the
Trigger Period to cease and for interest payments to be resumed. Copies of any
such notice to a Holder, if given by the Company, shall be mailed to the Trustee
at the same time.
Section 2.08 DEFERRAL OF INTEREST IN GENERAL. (a) Any unpaid interest
accrued during any Extension Period, including Compounded Interest, will in all
events be due and payable upon the Stated Maturity, subject, in the case of
Foregone Interest, to Section 2.07(f).
(b) At the termination of any Extension Period, the Company shall pay all
deferred interest then accrued and unpaid, together with Compounded Interest, on
the Interest Payment Date on which such Extension Period terminates, subject to
Section 2.07. An Extension Period will be deemed to terminate upon any
redemption or upon any acceleration of the Stated Maturity.
(c) In no event shall any Extension Period, whether or not consisting of
consecutive Interest Payment Periods, (i) exceed ten years, (ii) end on a date
other than an Interest Payment Date or (iii) extend beyond the Stated Maturity.
For purposes of calculating the foregoing limitation on Extension Periods, (x)
only when all accrued and unpaid interest, together with any Compounded Interest
thereon, has been paid will any Interest Payment Period during which interest
has been deferred no longer be included; and (y) after the commencement of an
Extension Period, the period from the first Interest Payment Date for which
interest was deferred pursuant to Section 2.06 or Section 2.07 and ending on the
Interest Payment Date on which all interest that was deferred pursuant to
Section 2.06 or Section 2.07, including Compounded Interest, is paid in full,
shall be included for purposes of calculating the length of an Extension Period.
Section 2.09 RIGHT TO OPTIONAL REDEMPTION BY THE COMPANY. (a)The Company
may, at its option, redeem the Notes:
(i) in whole or in part, on or after June 1, 2016 at the Par
Redemption Amount; provided that if the Notes are not redeemed in whole, at
least $50 million aggregate principal amount of the Notes (excluding Notes
held by the Company or any of its Affiliates) remains outstanding after
giving effect to such redemption; or
(ii) in whole but not in part at any time at the Make-Whole Redemption
Amount.
16
(b) The Company may not redeem fewer than all outstanding Notes unless all
accrued and unpaid interest on the Notes, together with any Compounded Interest
thereon, has been paid in full for all Interest Payment Periods terminating on
or prior to the Redemption Date.
(c) The date fixed for redemption of any Notes as a result of a Tax Event
will be within 180 days following the occurrence of the Tax Event; provided,
however, that if at the time the Company is able to eliminate, within the 180
day period, the Tax Event by taking some ministerial action that has no adverse
effect on the Company or the Holders, the Company shall pursue such action in
lieu of redemption; provided, further, that the Company will have no right or
obligation to redeem the Notes while it is pursuing such ministerial action.
(d) The definition of "Redemption Price" in Section 1.01 of the Base
Indenture shall mean, in the case of a redemption of the Notes in whole or in
part on or after June 1, 2016, the Par Redemption Amount, and in the case of a
redemption in whole prior to June 1, 2016, the Make-Whole Redemption Amount; and
Section 2.10 EVENTS OF DEFAULT. (a)Section 7.01 of the Base Indenture is
hereby amended and supplemented with respect to the Notes by deleting clauses
(a), (c) and (d) thereof and adding the following additional Event of Default:
(i) the Company defaults in the payment of interest on the Notes when
such interest becomes due and payable and such default continues for a
period of 30 calendar days, whether or not such payment is prohibited by
the subordination provisions of the Indenture; provided that the deferral
of interest pursuant to a valid Extension Period satisfying Section 2.06,
Section 2.07 and Section 2.08, as applicable, of the First Supplemental
Indenture shall not constitute a default in the payment of interest.
(b) The first paragraph of Section 7.02 of the Base Indenture is hereby
modified with respect to the Notes by replacing the same with the following: "If
an Event of Default with respect to the Notes at the time Outstanding occurs and
is continuing, then in every such case the Trustee or the Holders of at least
25% in principal amount of the Outstanding Notes may declare the principal
amount of all the Notes to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration, such principal amount, plus accrued and unpaid interest (other
than Foregone Interest, in the event of a Bankruptcy Default), and premium, if
payable, shall become immediately due and payable; provided, however, the
payment of such principal, premium, if any, and interest, if any, on the Notes
shall remain subordinated to the extent provided in the Indenture. Upon payment
of such amount in the Currency in which the Notes are denominated (except as
otherwise provided pursuant to Sections 3.01), all obligations of the Company in
respect of the payment of principal of the Notes shall terminate."
(c) The use of sources of funding other than the Alternative Coupon
Satisfaction Mechanism to fund interest payments during a Trigger Period is not
an Event of Default.
Section 2.11 COVENANT DEFAULTS. (a)The Base Indenture is hereby amended and
supplemented with respect to the Notes as follows:
17
(i) The last paragraph of Section 7.03 is amended in its entirety as
follows: "If an Event of Default or a TIA Covenant Default with respect to
the Notes occurs and is continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders of
the Notes by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other
proper remedy."
(ii) Section 7.03 is further supplemented by adding the following
paragraph following the last paragraph, as amended, in clause (i) above:
"If a Covenant Default with respect to the Notes occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper
remedy. If a Covenant Default other than a TIA Covenant Default with
respect to the Notes occurs and is continuing, and then only if the Trustee
is directed by Holders pursuant to and in accordance with Section 7.12 of
the Base Indenture, the Trustee shall proceed to protect and enforce the
rights of the Holders of the Notes by such appropriate judicial proceedings
as such Holders shall so direct to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy."
(iii) Section 7.07, clause (1) is amended in its entirety as follows:
"an Event of Default or Covenant Default shall have occurred and be
continuing and such Holder has previously given written notice to the
Trustee of a continuing Event of Default or Covenant Default, as the case
may be, with respect to such series."
(iv) Section 7.07, clause (2) is amended in its entirety as follows:
"the Holders of not less than 25% in principal amount, in the case of an
Event of Default, or a majority in principal amount, in the case of a
Covenant Default, of the Outstanding Notes shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default
or such Covenant Default, as the case may be, in its own name as Trustee
hereunder."
(v) Section 7.11 is amended in its entirety as follows: "No delay or
omission of the Trustee or of any Holder to exercise any right or remedy
accruing upon any Event of Default or Covenant Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or
Covenant Default or any acquiescence therein. Every right and remedy given
by this Indenture or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders, as the case may be."
(vi) Section 8.1(b) is amended in its entirety as follows: "In case an
Event of Default or a TIA Covenant Default with respect to the Notes has
occurred and is continuing, the Trustee shall, with respect to the Notes,
exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their
18
exercise, as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs."
(b) Notwithstanding the foregoing, a Covenant Default shall not constitute
an Event of Default and shall not give rise to any of the rights or duties set
forth in Section 7.02 of the Base Indenture, as amended and supplemented with
respect to the Notes by this First Supplemental Indenture.
Section 2.12 DESIGNATION OF DEPOSITARY. Initially, the Depositary for the
Notes will be The Depository Trust Company. The Global Notes will be registered
in the name of the Depositary or its nominee, Cede & Co., and delivered by the
Trustee to the Depositary or a custodian appointed by the Depositary for
crediting to the accounts of its participants.
Section 2.13 CONVERSION. The Notes will not be convertible into shares of
Common Stock or any other security.
Section 2.14 DEFINITIVE FORM OF NOTES. The Notes will be issued in
definitive form only under the limited circumstances set forth in Section 3.05
of the Base Indenture.
Section 2.15 COMPANY REPORTS. The provisions of Section 9.04 of the Base
Indenture relating to the nature, content and date for reports by the Company to
the Holders, to the extent such provisions are mandated by the Trust Indenture
Act of 1939, as amended, shall apply to the Notes.
Section 2.16 MODIFICATION OF INDENTURE. In addition to the provisions
contained in Article Eleven of the Base Indenture, The Company may, without the
consent of any Holder, ammend this First supplemental Indenture to (i) increase
the Share Cap Amount in accordance with the provisions of Section 3.02(b), and
(ii) to amend Section 2.07(b)(i), in accordance with the provisions of Section
2.07(d).
Section 2.17 OTHER. (a) The provisions contained in Article Five of the
Base Indenture and, without limiting the provisions of Section 4.01 of this
First Supplemental Indenture, any provisions in the Base Indenture relating to
the Issuer Trusts shall not apply to the Notes.
(b) The Company agrees, and by acquiring an interest in a Note each
beneficial owner of a Note agrees, to treat the Notes as indebtedness for U.S.
federal income tax purposes.
ARTICLE III
COVENANTS
Article Twelve of the Base Indenture is hereby supplemented with respect to
the Notes by the following additional covenants of the Company:
Section 3.01 LIMITATION ON COMPANY PAYMENTS. During any Extension Period
and until such time as all accrued but unpaid interest, together with any
Compounded Interest thereon, is paid in full, the Company shall not (and shall
not permit any of its Subsidiaries to):
19
(a) declare or pay any dividends on, make distributions regarding, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
shares of the capital stock of the Company, other than:
(i) purchases of capital stock of the Company in connection with any
employee or agent benefit plans or the satisfaction of the Company's
obligations under any contract or security outstanding on such date
requiring the Company to purchase its capital stock, or under any dividend
reinvestment plan;
(ii) in connection with the reclassification of any class or series of
capital stock of the Company or the exchange or the conversion of one class
or series of the capital stock of the Company for or into another class or
series of the capital stock of the Company;
(iii) the purchase of fractional interests in shares of the capital
stock of the Company in connection with the conversion or exchange
provisions of such capital stock or the security being converted or
exchanged;
(iv) dividends or distributions in the Company's capital stock, or
rights to acquire Common Stock, or repurchases or redemptions of Common
Stock solely from the issuance or exchange of Common Stock;
(v) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuances of capital
stock under any such plan in the future, or redemptions or repurchases of
any rights outstanding pursuant to a Company shareholder rights plan; or
(vi) acquisitions of Common Stock in connection with any acquisitions
of businesses made by the Company (which acquisitions by the Company are
made in connection with the satisfaction of indemnification obligations of
the sellers of such businesses);
(b) make any payment of principal of, or interest or premium, if any, on,
or repay, repurchase or redeem any debt securities issued by the Company that
rank pari passu with or junior in interest to the Notes other than any payment,
repurchase or redemption in respect of Parity Debt Securities made ratably and
in proportion to the respective amount of (1) accrued and unpaid amounts on such
Parity Debt Securities, on the one hand, and (2) accrued and unpaid amounts on
the Notes, on the other hand; and
(c) make any guarantee payments with respect to any guarantee by the
Company of the Debt Securities of any Subsidiary of the Company, if such
guarantee ranks pari passu with or junior in interest to the Notes, other than
any payment in respect of Parity Guarantees made ratably and in proportion to
the respective amount of (1) accrued and unpaid amounts on such Parity
Guarantees, on the one hand, and (2) accrued and unpaid amounts on the Notes, on
the other hand.
Section 3.02 ALTERNATIVE COUPON SATISFACTION MECHANISM. (a) Commencing at
the date (i) on which a Trigger Event occurs or (ii) that is five-years
following the first Interest
20
Payment Date as of which the Company elected to commence an Optional Extension
Period, the Company shall use Commercially Reasonable Efforts to satisfy its
obligation to pay interest then outstanding on the Notes by selling Common Stock
(including treasury shares and shares of Common Stock sold pursuant to any
dividend reinvestment plan or employee benefits plan) (the "ALTERNATIVE COUPON
SATISFACTION MECHANISM"), the proceeds of which shall be paid to the Holders, in
satisfaction of the accrued but unpaid interest, together with any Compounded
Interest thereon, then due on the Notes. Mandatorily Deferred Interest on the
Notes may only be satisfied using the Alternative Coupon Satisfaction Mechanism
except if an Event of Default has occurred and is continuing, in which case such
interest obligation may be satisfied without regard to the Alternative Coupon
Satisfaction Mechanism. In the event that a Trigger Period is no longer
continuing, subsequent interest may be paid in cash without regard to the
Alternative Coupon Satisfaction Mechanism.
(b) The Company is not permitted to sell shares of Common Stock in excess
of a number of shares of Common Stock which at May 26, 2006 is equal to
55,000,000 (the "SHARE CAP AMOUNT"), for the purpose of satisfying the
Alternative Coupon Satisfaction Mechanism or otherwise paying deferred interest
on the Notes. The Company may, at its discretion, increase the Share Cap Amount
(including through the increase of its authorized share capital, if necessary)
if the Company determines that such increase is necessary to allow it to issue
sufficient shares to satisfy its obligations to pay deferred interest on the
Notes pursuant to the Alternative Coupon Satisfaction Mechanism or otherwise pay
deferred interest on the Notes. If the issued and outstanding shares of Common
Stock shall have been changed into a different number of shares or a different
class by reason of any stock split, reverse stock split, stock dividend,
reclassification, recapitalization, split-up, combination, exchange of shares or
other similar transaction, then the Share Cap Amount shall be correspondingly
adjusted.
(c) The net proceeds received by the Company from the issuance of shares of
Common Stock (i) starting at such date that is 180 days prior to any Interest
Payment Date on which the Company intends to use the Alternative Coupon
Satisfaction Mechanism and (ii) designated by the Company at or before the time
of such issuance as available to pay interest on the Notes will, at the time
such proceeds are delivered to the Trustee to satisfy the relevant interest
payment, be deemed to satisfy the Company's obligations to pay interest on the
Notes pursuant to the Alternative Coupon Satisfaction Mechanism pursuant to the
preceding clause (a).
(d) In the event that the Company extends the Interest Payment Period on
the Notes and on other Parity Debt Securities that contain similar requirements
to pay Mandatorily Deferred Interest pursuant to the Alternative Coupon
Satisfaction Mechanism, the Company will apply any net proceeds so raised on a
pro rata basis towards its obligations to pay interest on the Notes and on such
Parity Debt Securities.
ARTICLE IV
SUBORDINATION
Section 4.01 SENIOR INDEBTEDNESS. "Senior Indebtedness" for all purposes of
this Indenture shall have the meaning ascribed to such term in the Base
Indenture and shall also include the principal, premium, if any, and interest on
(including interest accruing on or after the
21
filing of any petition in bankruptcy or for reorganization relating to the
Company, whether or not such claim for post-petition interest is allowed in such
proceeding):
(a) all senior, senior subordinated, subordinated and other indebtedness of
the Company, whether outstanding on the date of the issuance of the Notes or
thereafter created, incurred or assumed, which is for money borrowed (including,
without limitation, the Company's 5.35% Senior Notes due 2010, 5.65% Senior
Notes due 2015 and any amounts borrowed under the Company's $750 million senior
unsecured revolving credit facility or any amounts owed by the Company under any
debentures or similar instruments issued in connection with any "trust preferred
securities"), or which is otherwise evidenced by a note or similar instrument;
(b) all obligations of the Company under leases required or permitted to be
capitalized under GAAP;
(c) any indebtedness of any other Person of the kinds described in the
preceding clause (a), for the payment of which the Company or its property is
responsible or liable as guarantor or otherwise; and
(d) amendments, modifications, renewals, extensions, deferrals and
refundings of any of the forgoing types of indebtedness.
Senior Indebtedness shall continue to be Senior Indebtedness and to be entitled
to the benefits of the subordination provisions of the Indenture irrespective of
any amendment, modification or waiver of any term of the Senior Indebtedness, or
any extension or renewal of the Senior Indebtedness. Notwithstanding anything to
the contrary in the foregoing or in the Base Indenture, Senior Indebtedness
shall not include (i) any accounts payable or other liability to trade
creditors, (ii) any indebtedness which by its terms is expressly made pari passu
with or subordinated to the Notes, (iii) obligations owed by the Company to any
of its subsidiaries or (iv) any liability for federal, state, local or other
taxes owed or owing by the Company or its subsidiaries.
ARTICLE V
MISCELLANEOUS
Section 5.01 MEETINGS AND VOTING. (a)Section 9.3 of the Base Indenture is
hereby amended and supplemented with respect to the Notes such that the request
of the Holders of at least 25% of the Outstanding Debt Securities of a series or
of all series, as the case may be, shall be required to call a meeting of
Holders.
(b) With respect to the Notes, any request, demand, authorization,
direction, notice, consent, waiver or other action provided by the Base
Indenture to be given or taken by Holders may be embodied in one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent or proxy duly appointed in writing; and, except as otherwise
expressly provided in the Base Indenture, such action will become effective when
such instrument or instruments are delivered to the Trustee and, where expressly
required, to the Company. Whenever Holders of a specified percentage in
aggregate principal amount may take any act, such act may be evidenced by: (i)
instruments executed by Holders; (ii) the record of
22
Holders voting in favor thereof at any meeting of the Holders; or (iii) a
combination of such instruments and any such record of such a meeting of
Holders.
Section 5.02 RATIFICATION OF INDENTURE. The Base Indenture, as supplemented
and amended by this First Supplemental Indenture, is ratified and confirmed, and
this First Supplemental Indenture shall be deemed part of the Base Indenture
with respect to the Notes in the manner and to the extent herein and therein
provided. If any provision of this First Supplemental Indenture is inconsistent
with a provision of the Base Indenture, the terms of this First Supplemental
Indenture shall control.
Section 5.03 TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals contained
herein are made by the Company and not by the Trustee, and the Trustee assumes
no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this First Supplemental
Indenture.
Section 5.04 GOVERNING LAW. This First Supplemental Indenture and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York.
Section 5.05 SEVERABILITY. In case any one or more of the provisions
contained in this First Supplemental Indenture or in the Notes shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this First Supplemental Indenture or of the Notes, but this First
Supplemental Indenture and the Notes shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
Section 5.06 COUNTERPARTS. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
Section 5.07 SUCCESSORS AND ASSIGNS. All covenants and agreements in the
Indenture by the Company shall bind its successors and assigns, whether
expressed or not. The Company will have the right at all times to assign any of
its respective rights or obligations under the Indenture to a direct or indirect
wholly owned Subsidiary of the Company; provided that, in the event of any such
assignment, the Company will remain liable for all of its respective
obligations. Subject to the foregoing, the Indenture will be binding upon and
inure to the benefit of the parties thereto and their respective successors and
assigns. The Indenture may not otherwise be assigned by the parties thereto.
22
1
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
AMERIPRISE FINANCIAL, INC.
as the Company
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
and Treasurer
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By: /s/ Xxxxxxx Xxxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Vice President
EXHIBIT A
[FACE OF NOTE]
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO. AS NOMINEE OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY.
THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS
NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE
OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY
THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY) MAY BE REGISTERED UNLESS AND UNTIL THIS NOTE IS
EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM. UNLESS (A) THIS NOTE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO AMERIPRISE
FINANCIAL, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
(B) ANY NOTE ISSUED IS REGISTERED IN THE NAME REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY AND (C) ANY PAYMENT HEREON IS MADE TO U.S. BANK
NATIONAL ASSOCIATION, AS TRUSTEE, OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), AND EXCEPT AS OTHERWISE PROVIDED
IN THE INDENTURE, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
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AMERIPRISE FINANCIAL, INC.
7.518% JUNIOR SUBORDINATED NOTE DUE 2066
CERTIFICATE NO.: ____________ $____________
CUSIP NO: ____________
This Note is one of a duly authorized series of Debt Securities of
AMERIPRISE FINANCIAL, INC. (the "NOTES"), all issued under and pursuant to a
Junior Subordinated Indenture dated as of May 5, 2006, duly executed and
delivered by AMERIPRISE FINANCIAL, INC., a Delaware corporation (the "COMPANY,"
which term includes any successor corporation under the Indenture hereinafter
referred to), and U.S. Bank National Association, a national banking
association, as Trustee (the "TRUSTEE"), as supplemented by the First
Supplemental Indenture thereto dated as of May 26, 2006, between the Company and
the Trustee, to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Notes. By the terms of the Indenture, the Notes are issuable
in series that may vary as to amount, date of maturity, rate of interest and in
other respects as provided in the Indenture.
The Company, for value received, hereby promises to pay to Cede & Co., as
nominee of The Depository Trust Company or its registered assigns, the principal
sum of ________________________ U.S. Dollars ($____________) on June 1, 2066, as
increased or decreased as provided for in Schedule 1 hereto.
Subject to Section 2.06, Section 2.07 and Section 2.08 of the First
Supplemental Indenture, Interest Payment Dates during the Fixed Rate Period:
June 1 and December 1, commencing on December 1, 2006.
Subject to Section 2.06, Section 2.07 and Section 2.08 of the First
Supplemental Indenture, Interest Payment Dates during the Floating Rate Period:
March 1, June 1, September 1 and December 1, commencing on June 1, 2016.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed
manually or by facsimile by its duly authorized officers under its corporate
seal.
AMERIPRISE FINANCIAL, INC.
as the Company
By:
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
and Treasurer
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 7.518% Junior Subordinated Notes due 2066 issued under
the within mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
----------------------------
Name:
Title:
Dated: __________, 2006
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[REVERSE OF NOTE]
AMERIPRISE FINANCIAL, INC.
7.518% JUNIOR SUBORDINATED NOTE DUE 2066
To the extent that any rights or other provisions of this Note differ from
or are inconsistent with those contained in the Indenture, then the Indenture
shall control. Capitalized terms used herein but not defined shall have the
meanings assigned to them in the Indenture referred to below unless otherwise
indicated.
1. Principal and Interest
AMERIPRISE FINANCIAL, INC., a Delaware corporation (including any successor
corporation under the Indenture hereinafter referred to, the "COMPANY"),
promises to pay interest on the principal amount of this Note at the Fixed Rate
from May 26, 2006 to June 1, 2016, and at the Floating Rate from June 1, 2016 to
the Stated Maturity.
Subject to Section 2.06, Section 2.07 and Section 2.08 of the First
Supplemental Indenture, (a) during the Fixed Rate Period, this Note will accrue
interest at a rate per annum of 7.518% of the principal amount of $1,000 per
Note, payable semi-annually in arrears on June 1 and December 1 of each year
(each a "FIXED RATE INTEREST PAYMENT DATE"), commencing on December 1, 2006 and
(b) during the Floating Rate Period, this Note will accrue interest at a rate
per annum of 3-month LIBOR plus a margin equal to 290.5 basis points, payable
quarterly in arrears on March 1, June 1, September 1 and December 1 of each year
(each a "FLOATING RATE INTEREST PAYMENT DATE" and together with the Fixed Rate
Interest Payment Date, an "INTEREST PAYMENT DATE"), commencing on June 1, 2016.
Interest not paid on any Interest Payment Date, including any interest deferred
during any Extension Period, will accrue and compound at the from time to time
then applicable interest rate (whether semi-annually at the Fixed Rate or
quarterly at the Floating Rate, as the case may be), as provided in the
Indenture. Subject to Section 2.05(a)(iii), such interest will accrue and
compound to the date that it is actually paid.
The amount of interest on this Note payable for any Interest Payment Date
during the Fixed Rate Period shall be computed (i) for any full Interest Payment
Period on the basis of a 360-day year of twelve 30-day months, (ii) for any
period shorter than a full Interest Payment Period, on the basis of a 30-day
month and (iii) for any period shorter than a 30-day month, on the basis of the
actual number of days elapsed in the 30-day month. Floating Rate interest on
this Note shall be computed on the basis of a 360-day year and the actual number
of days elapsed in the 360-day year.
2. Optional Deferral of Interest
Subject to Section 2.06 and Section 2.08 of the First Supplemental
Indenture, as long as no Event of Default has occurred and is continuing, and no
Trigger Event has occurred and no Trigger Period caused thereby is continuing,
the Company shall have the right at any time and
A-5
from time to time, to defer payments of interest on the Notes by extending the
Interest Payment Period on the Notes for a period (an "OPTIONAL EXTENSION
PERIOD") not exceeding ten years, during which Optional Extension Period
deferred interest on the Notes shall not be due and payable but will continue to
accrue and compound semi-annually or quarterly, as applicable, to the extent
permitted by applicable law, at the then applicable rate of interest on the
notes; provided that no such Optional Extension Period may end on a date other
than an Interest Payment Date or extend beyond the stated maturity of the Notes.
At the end of any Optional Extension Period, the Company may settle any and
all Optionally Deferred Interest with cash from any source until the date that
is five years following the first Interest Payment Date as of which the Company
commenced an Optional Extension Period on the Notes. Thereafter, subject to the
occurrence of a Market Disruption Event, the Company must immediately and
continuously use its Commercially Reasonable Efforts to sell shares of Common
Stock and to use the proceeds therefrom to pay any outstanding Optionally
Deferred Interest in accordance with the Alternative Coupon Satisfaction
Mechanism.
If a Trigger Event occurs after commencement of an Optional Extension
Period, the Optional Extension Period will be deemed suspended for so long as
the Trigger Period is continuing. Once the Trigger Period is no longer
continuing, the right of the Company to optionally defer payment of interest
will continue, subject to the limitations and consequences described herein.
The first Interest Payment Date on which the Company defers the payment of
any interest (whether due to an optional deferral or the occurrence of a Trigger
Event) will commence an Optional Extension Period. This Optional Extension
Period will not be considered terminated until the first date thereafter when
all accrued and unpaid interest, together with any Compounded Interest, has been
paid by the Company. An Optional Extension Period may not, under any
circumstances, extend beyond the tenth anniversary of its commencement or beyond
the stated maturity date of the Notes. When and if an Optional Extension Period
is terminated because the Company has paid in full all accrued and unpaid
interest then owed by the Company, together with any Compounded Interest
thereupon, the Company may commence a new Optional Extension Period, subject to
the requirements of Section 2.06, there being no limit to the number of such new
Optional Extension Period that the Company may commence.
During an Optional Extension Period, the Company shall not (and shall not
permit any of its Subsidiaries to) make the payments or take any of the actions
set forth in Section 3.01 of the First Supplemental Indenture.
3. Mandatory Deferral of Interest
Subject to Section 2.07 and Section 2.08 of the First Supplemental
Indenture, if and to the extent that a Trigger Event has occurred as of any
Trigger Determination Date, the Company shall defer payments of interest on the
Notes beginning on the Interest Payment Date immediately following such Trigger
Determination Date, thereby extending the Interest Payment Period on the Notes
until (but not including) the first subsequent Interest Payment Date for which
no Trigger Event has occurred as of the Trigger Determination Date applicable to
such Interest Payment Date, but in any event for a period not exceeding ten
years (a "TRIGGER
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PERIOD"), during which Trigger Period deferred interest on the Notes shall not
be due and payable, except to the extent that any such payment is made using the
Alternative Coupon Satisfaction Mechanism.
By acquiring this Note or an interest herein, the Holder or beneficial
owner of this Note, as the case may be, agrees that in the event of a Bankruptcy
Default prior to the Stated Maturity or redemption of this Note, any unpaid
Mandatorily Deferred Interest in excess of 25% of the then outstanding principal
amount of this Note (or the portion of this Note in which such beneficial owner
holds an interest) (the "FOREGONE INTEREST") shall not be due and payable and no
Holder or beneficial owner will have any claim for, and thus any right to
receive, such Foregone Interest.
Mandatorily Deferred Interest on the Notes may only be satisfied using the
Alternative Coupon Satisfaction Mechanism except upon an Event of Default, in
which case such Mandatorily Deferred Interest may be satisfied without regard to
the Alternative Coupon Satisfaction Mechanism. In the event that a Trigger Event
is no longer continuing, subsequent interest may be paid in cash without regard
to the Alternative Coupon Satisfaction Mechanism.
During a Trigger Period, the Company shall not (and shall not permit any of
its Subsidiaries to) make the payments or take any of the actions set forth in
Section 3.01 of the First Supplemental Indenture.
4. Extension Periods in General
The Holder of this Note, and each beneficial owner of an interest in this
Note, by accepting the same, agrees to and shall be bound by the deferral
provisions in the Indenture, including Section 2.06, Section 2.07, and Section
2.08 of the First Supplemental Indenture.
At the termination of any Extension Period, the Company shall pay all
deferred interest then accrued and unpaid, together with Compounded Interest, on
the Interest Payment Date on which such Extension Period terminates, subject to
Section 2.07. An Extension Period will be deemed to terminate upon any
redemption or upon any acceleration of the Stated Maturity.
In no event shall any Extension Period, whether or not consisting of
consecutive Interest Payment Periods, (i) exceed ten years, (ii) end on a date
other than an Interest Payment Date or (iii) extend beyond the Stated Maturity.
For purposes of calculating the foregoing limitation on Extension Periods, (x)
only when all accrued and unpaid interest, together with any Compounded Interest
thereon, has been paid will any Interest Payment Period during which interest
has been deferred no longer be included; and (y) after the commencement of an
Optional Extension Period, the period from the first Interest Payment Date for
which interest was deferred pursuant to Section 2.06 of the First Supplemental
Indenture and ending on the Interest Payment Date on which all interest that was
deferred pursuant to such Section 2.06, including Compounded Interest, is paid
in full, shall be included for purposes of calculating the length of an Optional
Extension Period.
5. Method of Payment
A-7
Interest on this Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name this Note is registered in the Security Register at the close of business
on the Regular Record Date for the payment of such interest. As long as the
Notes remain in book entry form or are represented by a Global Note, the Regular
Record Dates for this Note shall be the Business Day next preceding the
corresponding Interest Payment Date. If the Notes are issued in definitive form,
the Regular Record Dates for this Note shall be such Business Day selected by
the Company that is at least one Business Day prior to the corresponding
Interest Payment Date.
6. Paying Agent and Security Registrar
Initially, U.S. Bank National Association, the Trustee, will act as Paying
Agent and Security Registrar. The Company may change the Paying Agent and
Security Registrar without notice to any Holder.
7. Indenture
This Note is one of a duly authorized series of the 7.518% Junior
Subordinated Notes due 2066 (the "NOTES") of the Company issued under a Junior
Subordinated Indenture, dated as of May 5, 2006 (the "BASE INDENTURE"), as
supplemented by the First Supplemental Junior Subordinated Indenture dated May
26, 2006 (the "FIRST SUPPLEMENTAL INDENTURE" and, together with the Base
Indenture, the "INDENTURE"), in each case, between the Company and U.S. Bank
National Association, as trustee (the "TRUSTEE"). The terms of this Note include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended ("TIA"). This Note is subject to
all such terms, and Holders are referred to the Indenture and the TIA for a
statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Note and the terms of the
Indenture, the terms of the Indenture shall control. Capitalized terms used but
not defined herein have the meanings assigned to them in the Indenture unless
otherwise indicated.
8. Optional Right of Redemption
The Company may, at its option, redeem the Notes (a) in whole or in part,
on or after June 1, 2016 at the Par Redemption Amount; provided that if the
Notes are not redeemed in whole, at least $50 million aggregate principal amount
of the Notes (excluding Notes held by the Company or any of its Affiliates)
remains outstanding after giving effect to such redemption; or (b) in whole but
not in part at any time at the Make-Whole Redemption Amount.
9. No Sinking Fund.
The Notes will not be subject to a sinking fund provision.
10. Subordination
The payment of principal of and interest on this Note is, to the extent and
in the manner provided in the Indenture, subordinated and subject in right of
payment to the prior payment in full of all amounts then due on all Senior
Indebtedness of the Company, and this Note is issued
A-8
subject to such subordination provisions contained in the Indenture. Each Holder
of this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes.
11. Defaults and Remedies
The Indenture provides for Events of Default and remedies relating thereto
with respect to the Notes as set forth in Article Seven of the Base Indenture as
supplemented by Section 2.10 of the First Supplemental Indenture.
12. Amendment; Supplement
The Indenture provides for amendments, supplements and waivers with respect
to the Indenture as set forth in Article Eleven of the Base Indenture, as
supplemented by Section 2.16 of the First Supplemental Indenture.
13. Restrictive Covenants
The Indenture provides restrictive covenants with respect to the Notes as
set forth in Article Twelve of the Base Indenture as supplemented by Article III
of the First Supplemental Indenture.
14. Denomination; Transfer; Exchange
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations herein and therein set forth, Notes
so issued are exchangeable for a like aggregate principal amount at maturity of
Notes of a different authorized denomination, as requested by the Holder
surrendering the same.
As provided in the Indenture and subject to certain limitations therein set
forth, this Note is transferable by the registered Holder hereof on the Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Trustee in the City and State of New
York accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee, duly executed by the registered
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of authorized denominations and for the same aggregate principal
amount at maturity will be issued to the designated transferee or transferees.
No service charge will be made for any such transfer, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in relation thereto.
15. Persons Deemed Owners
The registered Holder of this Note shall be treated as its owner for all
purposes.
16. Tax Treatment
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The Company agrees, and by acquiring an interest in a Note each beneficial
owner of a Note agrees, to treat the Notes as indebtedness for U.S. federal
income tax purposes.
17. Defeasance
Subject to certain conditions contained in the Indenture, the Company's
obligations under the Indenture and some or all of the Notes may at any time be
terminated if the Company deposits with the Trustee cash and/or U.S. Government
Obligations sufficient in the opinion of a nationally recognized firm of
independent public accountants to pay and discharge each installment of
principal, premium, if any, and interest on the Notes to Stated Maturity.
18. No Recourse Against Others
No recourse shall be had for the payment of the principal of or the
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, or based on or in respect of the Indenture, against any incorporator,
shareholder, officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.
19. Authentication
This Note shall not be valid until the Trustee (or authenticating agent)
executes the certificate of authentication on the other side of this Note.
20. Governing Law
The Indenture and this Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
A-10
SCHEDULE 1
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Principal Amount
Amount of decrease Amount of increase in of Notes evidenced
in Principal Amount Principal Amount of by this Global Note Signature of
of Notes evidenced Notes evidenced by following such authorized
Date by this Global Note this Global Note decrease or increase officer of agent
-------- ------------------- --------------------- -------------------- ----------------
Schedule 1
