REPLACEMENT CAPITAL COVENANT
Exhibit
4(d)
REPLACEMENT
CAPITAL COVENANT
Replacement Capital Covenant,
dated as of March 1, 2008 (this “Replacement Capital
Covenant”), by American Electric Power Company, Inc., a New York
corporation (together with its successors and assigns, the “Corporation”), in favor of
and for the benefit of each Covered Debtholder (as defined below).
Recitals
A. On
the date hereof, the Corporation is issuing $315,000,000 aggregate principal
amount of its 8.75% Junior Subordinated Debentures (together with any such
junior subordinated debentures issued after the date hereof that may be
consolidated and form a single series with such junior subordinated debentures
issued on the date hereof, the “Subordinated
Debentures”).
B. This
Replacement Capital Covenant is the “Replacement Capital Covenant” referred to
in the Prospectus Supplement, dated March 13, 2008, relating to the Subordinated
Debentures which supplements the Corporation’s Prospectus, dated June 9,
2005.
C. The
Corporation, in entering into and disclosing the content of this Replacement
Capital Covenant in the manner provided below, is doing so with the intent that
the covenants provided for in this Replacement Capital Covenant be enforceable
by each Covered Debtholder and that the Corporation be estopped from
disregarding the covenants in this Replacement Capital Covenant, in each case to
the fullest extent permitted by applicable law.
D. The
Corporation acknowledges that reliance by each Covered Debtholder upon the
covenants in this Replacement Capital Covenant is reasonable and foreseeable by
the Corporation and that, were the Corporation to disregard its covenants in
this Replacement Capital Covenant, each Covered Debtholder would have sustained
an injury as a result of its reliance on such covenants.
NOW,
THEREFORE, the Corporation hereby covenants and agrees as follows in favor of
and for the benefit of each Covered Debtholder.
Section
1. Definitions. Capitalized
terms used in this Replacement Capital Covenant (including the Recitals) have
the meanings set forth in Schedule I hereto.
Section
2. Limitations on Redemption,
Defeasance or Purchase of Subordinated Debentures. The
Corporation hereby promises and covenants to and for the benefit of each Covered
Debtholder that the Corporation shall not redeem or purchase or satisfy,
discharge or defease any portion of the principal amount of the Subordinated
Debentures through the deposit of money and/or U.S. Government Obligations as
contemplated by Article Seven of the Indenture (such satisfaction, discharge or
defeasance herein referred to as “defeasance”), and shall cause its
majority-owned Subsidiaries not to purchase, all or any part of the Subordinated
Debentures on or before the Termination Date except to the extent that
either:
(a) the
principal amount defeased or the applicable redemption or purchase price does
not exceed the sum of the following amounts raised through the issuance of
Replacement Capital Securities: the Applicable Percentage of (A) the aggregate
amount of the net cash proceeds the Corporation and its Subsidiaries have
received from the sale of Common Stock and Rights to acquire Common Stock, (B)
the Market Value of any Common Stock that has been issued in connection with the
conversion into or exchange for Common Stock of any convertible or exchangeable
securities, other than, in the case of (B), securities for which the Corporation
or any of its Subsidiaries has received equity credit from any NRSRO; and (C)
the aggregate amount of net cash proceeds received by the Corporation and its
Subsidiaries from the sale of Replacement Capital Securities (other than the
securities set forth above); to Persons other than the Corporation and its
Subsidiaries within the applicable Measurement Period (without double counting
proceeds received in any prior Measurement Period); provided that the limitations
in this Section 2 shall not restrict the repayment, redemption or other
acquisition of any Subordinated Debentures that have been previously defeased or
purchased in accordance with this Replacement Capital Covenant; or
(b) the
Subordinated Debentures are exchanged for consideration that includes an
aggregate principal amount or liquidation preference (or, in the case of Common
Stock, Market Value) of Replacement Capital Securities equal to
100% (or, in the case of Common Stock, 50%) of the aggregate
principal amount of Subordinated Debentures that are exchanged.
Section
3. Covered
Debt. (a) The Corporation represents and warrants
that the Initial Covered Debt is Eligible Debt.
(b) On,
or during the 30-day period immediately preceding, any Redesignation Date with
respect to the Covered Debt then in effect, the Corporation shall identify the
series of Eligible Debt that will become the Covered Debt on the related
Redesignation Date in accordance with the following procedures:
(i) the
Corporation shall identify each series of its then outstanding long-term
indebtedness for money borrowed that is Eligible Debt;
(ii) if
only one series of the Corporation’s then outstanding long-term indebtedness for
money borrowed is Eligible Debt, such series shall become the Covered Debt
commencing on the related Redesignation Date;
(iii) if
the Corporation has more than one outstanding series of long-term indebtedness
for money borrowed that is Eligible Debt, then the Corporation shall identify a
specific series that has the latest stated final maturity date as of the date
the Corporation is applying the procedures in this Section 3(b) and such series
shall become the Covered Debt commencing on the related Redesignation
Date;
(iv) the
series of outstanding long-term indebtedness for money borrowed that is
determined to be Covered Debt pursuant to clause (ii) or (iii) above shall be
the Covered Debt for purposes of this Replacement Capital Covenant for the
period commencing on the related Redesignation Date and continuing to but not
including the Redesignation Date as of which a new series of outstanding
long-term indebtedness is next determined to be the Covered Debt pursuant to the
procedures set forth in this Section 3(b); and
(v) in
connection with such identification of a new series of the Covered Debt, notice
shall be given as provided for in Section 3(d) within the time frame provided
for in such section.
(c) Notwithstanding
any other provisions of this Replacement Capital Covenant, if a series of
Eligible Senior Debt has become the Covered Debt in accordance with Section
3(b), on the date on which the Corporation issues a new series of Eligible
Subordinated Debt, then immediately upon such issuance such series shall become
the Covered Debt and the applicable series of Eligible Senior Debt shall cease
to be the Covered Debt.
(d) Notice. In order
to give effect to the intent of the Corporation described in Recital C, the
Corporation covenants that (i) simultaneously with the execution of this
Replacement Capital Covenant, or as soon as practicable after the date hereof,
(A) notice shall be given to the Holders of the Initial Covered Debt, in the
manner provided in the indenture or other instrument under which such Initial
Covered Debt was issued, of this Replacement Capital Covenant and the rights
granted to such Holders hereunder and (B) the Corporation shall file a copy of
this Replacement Capital Covenant with the Commission as an exhibit to a Form
8-K under the Securities Exchange Act; (ii) so long as the Corporation is a
reporting company under the Securities Exchange Act, the Corporation shall
include in each Form 10-K filed with the Commission under the Securities
Exchange Act a description of the covenant set forth in Section 2 and identify
the series of long-term indebtedness for borrowed money that is Covered Debt as
of the date such Form 10-K is filed with the Commission; (iii) if a series of
the Corporation’s long-term indebtedness for money borrowed (A) becomes Covered
Debt or (B) ceases to be Covered Debt, notice of such occurrence shall be given
within 30 days to the holders of such long-term indebtedness for money borrowed
in the manner provided for in the indenture or other instrument under which such
long-term indebtedness for money borrowed was issued, and the Corporation shall
report such change in a Form 8-K, which must include or incorporate by reference
this Replacement Capital Covenant, and in the Corporation’s next Form 10-Q or
Form 10-K, as applicable; (iv) upon succession of any new entity as the
Corporation hereunder as a result of a merger, consolidation, statutory share
exchange, sale, lease or transfer of all or substantially all of the assets or
other business combination of the Corporation as it existed prior thereto,
notice of such occurrence shall be given within 30 days to the holders of the
Covered Debt in the manner provided for in the indenture or other instrument
under which such long-term indebtedness for money borrowed was issued and the
Corporation shall report such change in a Form 8-K, which must include or
incorporate by reference this Replacement Capital Covenant, and in the
Corporation’s next Form 10-Q or Form 10-K, as applicable; (v) if, and only if,
the Corporation ceases to be a reporting company under the Securities Exchange
Act, the Corporation will (A) post on its website (or any other similar
electronic platform generally available to the public) the information otherwise
required to be included in Securities Exchange Act filings pursuant to clauses
(ii), (iii) and (iv) above; and (B) cause a notice of this Replacement Capital
Covenant to be posted on the Bloomberg screen for the Initial Covered Debt or
any successor Bloomberg screen or, if none, a similar third-party vendor’s
screen the Corporation reasonably believes is appropriate (each an “Investor
Screen”) and cause a hyperlink of this Replacement Capital Covenant to be
included on the Investor Screen for each series of Covered Debt, in each case to
the extent permitted by Bloomberg or such similar third-party vendor, as the
case may be; and (vi) promptly upon the request of any Holder of Covered Debt,
such Holder will be provided with a conformed copy of this Replacement Capital
Covenant.
Section
4. Termination and
Amendment. (a) The obligations of the Corporation
pursuant to this Replacement Capital Covenant shall remain in full force and
effect until the earliest date (the “Termination Date”) to occur of (i) March 1,
2038, or if earlier, the date on which the Subordinated Debentures are otherwise
paid, redeemed, defeased or purchased in full (in compliance with the terms of
Section 2 of this Replacement Capital Covenant), (ii) the date, if any, on which
the Holders of at least a majority of the outstanding principal amount of the
then-effective Covered Debt consent or agree in writing to the termination of
the obligations of the Corporation hereunder, (iii) the date on which the
Corporation has no outstanding Eligible Senior Debt or Eligible Subordinated
Debt (in each case without giving effect to the rating requirement in clause (b)
of the definition of each such term) and (iv) the date on which the Subordinated
Debentures are accelerated as a result of an event of default under the
Indenture. From and after the Termination Date, the obligations of
the Corporation pursuant to this Replacement Capital Covenant shall be of no
further force and effect with respect to the Holders or otherwise.
(b) This
Replacement Capital Covenant may be amended or supplemented from time to time by
a written instrument signed by the Corporation with the consent of the Holders
of at least a majority of outstanding principal amount of the then-effective
Covered Debt, provided that this Replacement Capital Covenant may be amended or
supplemented from time to time by a written instrument signed only by the
Corporation (and without the consent of the Holders of the then-effective series
of Covered Debt) if any of the following apply (it being understood that any
such amendment or supplement may fall into one or more of the following): (i)
such amendment or supplement eliminates Common Stock, Rights to acquire Common
Stock, Common Equity Units and/or Mandatorily Convertible Preferred Stock as
Replacement Capital Securities, if, in the case of this clause, after the date
of this Replacement Capital Covenant, an accounting standard or interpretive
guidance of an existing accounting standard issued by an organization or
regulator that has responsibility for establishing or interpreting accounting
standards in the United States becomes effective such that there is more than an
insubstantial risk that the failure to eliminate Common Stock, Rights to acquire
Common Stock, Common Equity Units and/or Mandatorily Convertible Preferred Stock
as Replacement Capital Securities would result in a reduction in the
Corporation’s earnings per share as calculated in accordance with generally
accepted accounting principles in the United States (“EPS”), or the Corporation
otherwise has been advised in writing by a nationally recognized independent
accounting firm that there is more than an insubstantial risk that the failure
to eliminate such securities as Replacement Capital Securities would result in a
reduction of the Corporation’s EPS, (ii) the effect of such amendment or
supplement is solely to impose additional restrictions on the ability of the
Corporation or its Subsidiaries to redeem, defease or purchase the Subordinated
Debentures or to impose additional restrictions on, or to eliminate certain of,
the types of securities qualifying as Replacement Capital Securities (other than
securities which are covered by clause (i) above) and an officer of the
Corporation has delivered to the trustee for the benefit of the Holders of the
then-effective Covered Debt in the manner provided for in the indenture or other
instrument under which such long-term indebtedness for borrowed money was issued
a written certificate to that effect, (iii) such amendment or supplement extends
the date specified in Section 4(a)(i), the Stepdown Date, or both or (iv) such
amendment or supplement is not adverse to the rights of the Holders of the
then-effective Covered Debt hereunder and an officer of the Corporation has
delivered to the trustee for the benefit of the Holders of the then-effective
Covered Debt in the manner provided for in the indenture or other instrument
under which such long-term indebtedness for money borrowed was issued a written
certificate stating that, in his or her determination, such amendment or
supplement is not adverse to the Holders of the then-effective Covered
Debt. For the avoidance of doubt, an amendment or supplement that
adds new types of Replacement Capital Securities or modifies the requirements of
the Replacement Capital Securities described herein would not be adverse to the
rights of the Holders of Covered Debt if, following such amendment or
supplement, this Replacement Capital Covenant would satisfy the definition of
Explicit Replacement Covenant.
(c) For
purposes of Sections 4(a) and 4(b), the Holders whose consent or agreement is
required to terminate, amend or supplement this Replacement Capital Covenant or
the obligations of the Corporation hereunder shall be the Holders of the
then-effective Covered Debt as of a record date established by the Corporation
that is not more than 30 days prior to the date on which the Corporation
proposes that such termination, amendment or supplement becomes
effective.
Section
5. Miscellaneous. (a) This
Replacement Capital Covenant shall be governed by and construed in accordance
with the laws of the State of New York.
(b) This
Replacement Capital Covenant shall be binding upon the Corporation and its
successors and assigns and shall inure to the benefit of the Covered Debtholders
as they exist from time-to-time (it being understood and agreed by the
Corporation that any Person who is a Covered Debtholder shall retain its status
as a Covered Debtholder for so long as the series of long-term indebtedness for
borrowed money owned by such Person is Covered Debt and, if such Person
initiates a claim or proceeding to enforce its rights under this Replacement
Capital Covenant after the Corporation has violated its covenants in Section 2
and before the series of long-term indebtedness for money borrowed held by such
Person is no longer Covered Debt, such Person’s rights under this Replacement
Capital Covenant shall not terminate by reason of such series of long-term
indebtedness for money borrowed no longer being Covered Debt). The
Corporation agrees that, if at any time the Covered Debt is held by a trust (for
example, where the Covered Debt is part of an issuance of trust preferred
securities), a holder of the securities issued by such trust may enforce
(including by instituting legal proceedings) this Replacement Capital Covenant
directly against the Corporation as though such holder owned the Covered Debt
directly, and the holders of such trust securities shall be deemed Holders of
Covered Debt for purposes of this Replacement Capital Covenant for so long as
the indebtedness held by such trust remains Covered Debt
hereunder. Other than the Covered Debtholders as provided in the two
previous sentences, no other Person shall have any rights under this Replacement
Capital Covenant or be deemed a third party beneficiary of this Replacement
Capital Covenant. In particular, no holder of the Subordinated
Debentures is a third party beneficiary of this Replacement Capital Covenant, it
being understood that such holders may have rights under the
Indenture.
(c) All
demands, notices, requests and other communications to the Corporation under
this Replacement Capital Covenant shall be deemed to have been duly given and
made if in writing and (i) if served by personal delivery upon the Corporation,
on the day so delivered (or, if such day is not a Business Day, the next
succeeding Business Day) or (ii) if delivered by registered post or certified
mail, return receipt requested, or sent to the Corporation by a national or
international courier service, on the date of receipt by the Corporation (or, if
such date of receipt is not a Business Day, the next succeeding Business Day),
and in each case to the Corporation at the address set forth below, or at such
other address as may thereafter be listed as the principal executive offices of
the Corporation in the then most recently filed Form 10-K or Form 10-Q of the
Corporation, or as may thereafter be posted on the Corporation’s website as the
address for notices under this Replacement Capital Covenant:
American
Electric Power Company, Inc.
0
Xxxxxxxxx Xxxxx
Xxxxxxxx,
Xxxx 00000
Attention:
Xxxxx X. Xxxxx
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
IN
WITNESS WHEREOF, the Corporation has caused this Replacement Capital Covenant to
be executed by a duly authorized officer, as of the day and year first above
written.
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AMERICAN
ELECTRIC POWER COMPANY, INC
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By: /s/
Xxxxx X. Xxxxx
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Name: Xxxxx
X. Xxxxx
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Title: Treasurer
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Definitions
“Alternative Payment
Mechanism” means, with respect to any Qualifying Capital Securities,
provisions in the related transaction documents that permit the issuer, in its
sole discretion, to defer or skip in whole or in part payment of Distributions
on such Qualifying Capital Securities for one or more consecutive Distribution
Periods lasting up to ten years and that require the issuer thereof to issue (or
use Commercially Reasonable Efforts to issue), in its sole discretion, one or
more types of APM Qualifying Securities raising “eligible proceeds” (as
defined in (a) below) at least equal to the deferred Distributions on such
Qualifying Capital Securities and apply the proceeds to pay unpaid Distributions
on such Qualifying Capital Securities, commencing on the earlier of (x) the
first Distribution Date after commencement of a deferral period on which the
Corporation pays current Distributions on such Qualifying Capital Securities and
(y) the fifth anniversary of the commencement of such deferral period, and
that:
(a) define
“eligible proceeds” to mean, for purposes of such Alternative Payment Mechanism,
the net proceeds (after underwriters’ or placement agents’ fees, commissions or
discounts and other expenses relating to the issuance or sale and including the
fair market value of property received by the issuer or any of its Subsidiaries
as consideration for such APM Qualifying Securities) that the Corporation has
received during the 180 days prior to the related Distribution Date from the
issuance of APM Qualifying Securities to Persons other than the Corporation and
its Subsidiaries, up to the Preferred Cap (as defined in (e) below) in the case
of APM Qualifying Securities that are Qualifying Preferred Stock or Mandatorily
Convertible Preferred Stock;
(b) permit
the Corporation to pay current Distributions on any Distribution Date out of any
source of funds but (x) require the Corporation to pay deferred Distributions
only out of eligible proceeds and (y) prohibit the Corporation from paying
deferred Distributions out of any source of funds other than eligible
proceeds;
(c) if
deferral of Distributions continues for more than one year (or such shorter
period as may be provided for in the terms of such securities), require the
Corporation or any of its Subsidiaries not to redeem or purchase any securities
that rank pari passu
with or junior to any APM Qualifying Securities that the Corporation has issued
to settle deferred Distributions in respect to that deferral period until at
least one year after all deferred Distributions have been paid (a “Purchase Restriction”), other
than the following (none of which shall be restricted or prohibited by a
Purchase Restriction):
(i) purchases,
redemptions or other acquisitions by the Corporation or its Subsidiaries of
shares of Common Stock in connection with any employment or compensatory
contract, compensation or benefit plan or other similar arrangement with or for
the benefit of employees, officers, directors or consultants; or
(ii) purchases
by the Corporation or its Subsidiaries of shares of Common Stock pursuant to a
contractually binding requirement to buy shares of Common Stock entered into
prior to the beginning of the related deferral period, including under a
contractually binding stock repurchase plan;
(d) limit
the obligation of the Corporation to issue (or use Commercially Reasonable
Efforts to issue) APM Qualifying Securities that are Common Stock or Qualifying
Warrants, either (i) during the first five years of any deferral period or (ii)
with respect to deferred Distributions attributable to the first five years of
any deferral period (provided that such limitation shall not apply after a date
not later than the ninth anniversary of the commencement of any deferral
period), to a number of shares of Common Stock and Rights to acquire Common
Stock which does not, in the aggregate, exceed 2% of the outstanding number of
shares of Common Stock, in each case as of the date of the Corporation’s most
recent publicly available consolidated financial statements at the time of such
issuance (the “Common
Cap”);
(e) limit
the right of the Corporation to issue APM Qualifying Securities that are
Qualifying Preferred Stock or Mandatorily Convertible Preferred Stock, to an
amount from the issuance of such Qualifying Preferred Stock and then-still
outstanding Mandatorily Convertible Preferred Stock pursuant to the related
Alternative Payment Mechanism (including, in the case of Qualifying Preferred
Stock, at any point in time from all prior issuances thereof pursuant to such
Alternative Payment Mechanism) equal to 25% of the initial liquidation or
principal amount of the Qualifying Capital Securities that are the subject of
the related Alternative Payment Mechanism (the “Preferred Cap”);
(f) in
the case of Qualifying Capital Securities, include a Bankruptcy Claim Limitation
Provision; and
(g) permit
the Corporation, at its option, to provide that if the Corporation is involved
in a merger, consolidation, amalgamation, statutory share exchange or
conveyance, transfer or lease of assets substantially as an entirety to any
other person or a similar transaction (a “business combination”) where
immediately after the consummation of the business combination more than 50% of
the voting stock of the surviving entity of the business combination, or the
entity to whom all or substantially all of the Corporation’s assets are
conveyed, transferred or leased, is owned by the shareholders of the other party
to the business combination, then clauses (a), (b) and (c) above will not apply
to any deferral period that is terminated on the next Distribution Date
following the date of consummation of the business combination;
provided (and it being
understood) that:
(a) the
Alternative Payment Mechanism may at the discretion of the Corporation include a
share cap limiting the issuance of APM Qualifying Securities consisting of
Common Stock, Qualifying Warrants and Mandatorily Convertible Preferred Stock,
in each case to a maximum issuance cap to be set at the discretion of the
Corporation (a “Share Cap”); provided that such Share Cap will be subject to the
Corporation’s agreement to use Commercially Reasonable Efforts to increase the
Share Cap when reached and (i) only to the extent it can do so and
simultaneously satisfy its future fixed or contingent obligations under other
securities and derivative instruments that provide for settlement or payment in
shares of Common Stock or (ii) if the Corporation cannot increase the Share Cap
as contemplated in the preceding clause, by requesting its Board of Directors to
adopt a resolution for shareholder vote at the next occurring annual
shareholders meeting to increase the number of shares of the Corporation’s
authorized Common Stock for purposes of satisfying its obligations to pay
deferred Distributions;
(b) the
Corporation shall not be obligated to issue (or use Commercially Reasonable
Efforts to issue) APM Qualifying Securities for so long as a Market Disruption
Event has occurred and is continuing;
(c) if,
due to a Market Disruption Event or otherwise, the Corporation is able to raise
and apply some, but not all, of the eligible proceeds necessary to pay all
deferred Distributions on any Distribution Date, the Corporation will apply any
available eligible proceeds to pay accrued and unpaid Distributions on the
applicable Distribution Date in chronological order subject to the Common Cap,
the Preferred Cap, and the Share Cap (if any), as applicable; and
(d) if
the Corporation has outstanding more than one class or series of securities
under which it is obligated to sell a type of APM Qualifying Securities and
apply some part of the proceeds to the payment of deferred Distributions, then
on any date and for any period the amount of net proceeds received by the
Corporation from those sales and available for payment of deferred Distributions
on such securities shall be applied to such securities on a pro rata basis up to
the Common Cap, the Preferred Cap and the Share Cap (if any), as applicable, in
proportion to the total amounts that are due on such securities.
“APM Qualifying Securities”
means, with respect to an Alternative Payment Mechanism, any Debt Exchangeable
for Preferred Equity or any Mandatory Trigger Provision, one or more of the
following (as designated in the transaction documents for any Qualifying Capital
Securities that include an Alternative Payment Mechanism or a Mandatory Trigger
Provision or for any Debt Exchangeable for Preferred Equity):
(a) Common
Stock;
(b) Qualifying
Warrants;
(c) Qualifying
Preferred Stock; and
(d) Mandatorily
Convertible Preferred Stock
provided that if the APM
Qualifying Securities for any Alternative Payment Mechanism, any Debt
Exchangeable for Preferred Equity or any Mandatory Trigger Provision include
both Common Stock and Qualifying Warrants, such Alternative Payment Mechanism,
Debt Exchangeable for Preferred Equity or Mandatory Trigger Provision may
permit, but need not require, the Corporation to issue Qualifying
Warrants.
“Applicable Percentage”
means:
(i) with
respect to Common Stock, Rights to acquire Common Stock and Mandatorily
Convertible Preferred Stock, 200% prior to the Stepdown Date and 400% on or
after the Stepdown Date;
(ii) (a)
with respect to Qualifying Capital Securities described in clause (a) of the
definition of that term, 100% prior to the Stepdown Date and 200% on or after
the Stepdown Date and (b) with respect to Qualifying Capital Securities
described in clause (b) of the definition of that term, 100%; and
(iii) with
respect to Debt Exchangeable for Equity, 150% prior to the Stepdown Date and
300% on or after the Stepdown Date.
“Bankruptcy Claim Limitation
Provision” means, with respect to any Qualifying Capital Securities that
have an Alternative Payment Mechanism or a Mandatory Trigger Provision,
provisions that, upon any liquidation, dissolution, winding up or reorganization
or in connection with any insolvency, receivership or proceeding under any
bankruptcy law with respect to the issuer, limit the claim of the holders of
such Qualifying Capital Securities to Distributions that accumulate during (a)
any deferral period, in the case of Qualifying Capital Securities that have an
Alternative Payment Mechanism or (b) any period in which the issuer fails to
satisfy one or more financial tests set forth in the terms of such securities or
related transaction agreements, in the case of Qualifying Capital Securities
having a Mandatory Trigger Provision, to:
(i) in
the case of Qualifying Capital Securities having an Alternative Payment
Mechanism or Mandatory Trigger Provision with respect to which the APM
Qualifying Securities do not include Qualifying Preferred Stock or Mandatorily
Convertible Preferred Stock, 25% of the stated or principal amount of such
Qualifying Capital Securities then outstanding; and
(ii) in
the case of any other Qualifying Capital Securities, an amount not in excess of
the sum of (x) the amount of accumulated and unpaid Distributions (including
compounded amounts) that relate to the earliest two years of the portion of the
deferral period for which Distributions have not been paid and (y) an amount
equal to the excess, if any, of the Preferred Cap over the aggregate amount of
net proceeds from the sale of Qualifying Preferred Stock or Mandatorily
Convertible Preferred Stock that the issuer has applied to pay such
Distributions pursuant to the Alternative Payment Mechanism or the Mandatory
Trigger Provision, provided that the holders of such Qualifying Capital
Securities are deemed to agree that, to the extent the remaining claim exceeds
the amount set forth in subclause (x), the amount they receive in respect of
such excess shall not exceed the amount they would have received had the claim
for such excess ranked pari
passu with the interests of the holders, if any, of Qualifying Preferred
Stock or Mandatorily Convertible Preferred Stock.
“Board of Directors” means the
Board of Directors of the Corporation or a duly constituted committee
thereof.
“Business Day” means each day
other than (a) a Saturday or Sunday or (b) a day on which banking institutions
in The City of New York are authorized or required by law to remain
closed.
“Commercially Reasonable
Efforts” means, for purposes of selling APM Qualifying Securities,
commercially reasonable efforts to complete the offer and sale of APM Qualifying
Securities to third parties that are not the Corporation or any of its
Subsidiaries in public offerings or private placements. The issuer of
APM Qualifying Securities shall not be considered to have made Commercially
Reasonable Efforts to effect a sale of APM Qualifying Securities if it
determines not to pursue or complete such sale due to pricing, coupon, dividend
rate or dilution considerations.
“Commission” means the United
States Securities and Exchange Commission.
“Common Cap” has the meaning
specified in the definition of Alternative Payment Mechanism.
“Common Equity Units” means a
security or combination of securities that:
(i) gives
the holders a beneficial interest in (a) debt securities of the Corporation that
may not be redeemed at the Corporation’s option earlier than the settlement date
of the stock purchase contracts referred to below except upon the occurrence of
customary rating agency or tax events permitting early redemption, and (b) an
interest in a stock purchase contract that obligates the holder to acquire a
beneficial interest in a number of shares of Common Stock (subject to customary
anti-dilution adjustments) to be within a range established at the time of
issuance of the debt securities;
(ii) provides
that the holders directly or indirectly grant to the Corporation a security
interest in such debt securities and their proceeds (including any substitute
collateral permitted under the transaction documents) to secure the investors’
direct or indirect obligation to purchase Common Stock pursuant to such stock
purchase contracts;
(iii) includes
a remarketing feature pursuant to which the debt of the Corporation is
remarketed to new investors commencing not later than three Business Days prior
to the regularly scheduled stock purchase date; and
(iv) provides
for the proceeds raised in the remarketing to be used to purchase Common Stock
under the stock purchase contracts on a regularly scheduled stock purchase date
that is not more than approximately three years after the date of issuance of
such securities; provided, however, if there has not been a successful
remarketing by the first Distribution Date that is one year after such regularly
scheduled stock purchase date, provides that the stock purchase contracts will
be settled by the Corporation exercising its rights as a secured creditor with
respect to such debt securities or other collateral directly or indirectly
pledged by investors in the Debt Exchangeable for Equity.
“Common Stock” means any
common stock of the Corporation (including common stock held as treasury shares
and common stock sold pursuant to any dividend reinvestment plan, direct stock
purchase plan or director or employee benefit plan) that has no preference in
the payment of dividends or amounts payable upon the liquidation, dissolution or
winding up of the Corporation (including any security that tracks the
performance of, or relates to the results of, a business, unit or division of
the Corporation), and any securities that have no preference in the payment of
dividends or amounts payable upon the liquidation, dissolution or winding up of
the Corporation and are issued in exchange therefor in connection with a merger,
consolidation, statutory share exchange, business combination, recapitalization
or other similar event.
“Corporation” has the meaning
specified in the introduction to this instrument.
“Covered Debt” means (a) at
the date of this Replacement Capital Covenant and continuing to but not
including the first Redesignation Date, the Initial Covered Debt and (b)
thereafter, commencing with each Redesignation Date and continuing to but not
including the next succeeding Redesignation Date, the Eligible Debt identified
pursuant to Section 3(b) as the Covered Debt for such period.
“Covered Debtholder” means
each Person (whether a Holder or a beneficial owner holding through a
participant in a clearing agency) that buys, holds or sells long-term
indebtedness for money borrowed of the Corporation during the period that such
long-term indebtedness for money borrowed is Covered Debt, provided that a
Person who has sold all its right, title and interest in Covered Debt shall
cease to be a Covered Debtholder at the time of such sale if, at such time, the
Corporation has not breached or repudiated, or threatened to breach or
repudiate, its obligations hereunder.
“Debt Exchangeable for Equity”
means Common Equity Units or Debt Exchangeable for Preferred
Equity.
“Debt Exchangeable for Preferred
Equity” means a security or combination of securities (together in this
definition, “such
securities”) that:
(a) gives
the holder a beneficial interest in (i) subordinated debt securities of the
Corporation permitting the Corporation to defer Distributions in whole or in
part on such securities for one or more Distribution Periods of up to at least
seven years without any remedies other than Permitted Remedies and that are the
most junior subordinated debt of the Corporation (or rank pari passu with the most
junior subordinated debt of the Corporation) (in this definition, “subordinated debt”) and (ii)
a fractional interest in a stock purchase contract for a share or shares of
Qualifying Preferred Stock of the Corporation that ranks pari passu with or junior to
all other preferred stock of the Corporation (in this definition, “preferred
stock”);
(b) provides
that the holders directly or indirectly grant to the Corporation a security
interest in such subordinated debt and their proceeds (including any substitute
collateral permitted under the transaction documents) to secure the holders’
direct or indirect obligation to purchase preferred stock of the Corporation
pursuant to such stock purchase contracts;
(c) includes
a remarketing feature pursuant to which the subordinated debt of the Corporation
is remarketed to new investors commencing not later than the first Distribution
Date that is at least five years after the date of issuance of such securities
or earlier in the event of an early settlement event based on: (i) the
dissolution of the issuer of such securities or (ii) one or more financial tests
set forth in the terms of the instrument governing such securities;
(d) provides
for the proceeds raised in the remarketing of the subordinated debt to be used
to purchase preferred stock of the Corporation under the stock purchase
contracts and, if there has not been a successful remarketing by the first
Distribution Date that is six years after the date of issuance of such
securities, provides that the stock purchase contracts will be settled by the
Corporation exercising its remedies as a secured party with respect to its
subordinated debt or other collateral directly or indirectly pledged by the
holders of such securities;
(e) is
subject to an Explicit Replacement Covenant that will apply to such securities
and preferred stock of the Corporation, and will not include Debt Exchangeable
for Equity as a Replacement Capital Security; and
(f) if
applicable, after the issuance of such preferred stock of the Corporation,
provides the holders of such securities with a beneficial interest in such
preferred stock of the Corporation.
“Defeasance” has the meaning
specified in Section 2.
“Distribution Date” means, as
to any security or combination of securities, the dates on which periodic
Distributions on such securities are scheduled to be made.
“Distribution Period” means,
as to any security or combination of securities, each period from and including
a Distribution Date for such securities to but not including the next succeeding
Distribution Date for such securities.
“Distributions” means, as to a
security or combination of securities, dividends, interest payments or other
income distributions to the holders thereof that are not Subsidiaries of the
Corporation.
“Eligible Debt” means, at any
time, Eligible Subordinated Debt or, if no Eligible Subordinated Debt is then
outstanding, Eligible Senior Debt. The Subordinated Debentures shall
not be considered “Eligible Debt” for purposes of this Replacement Capital
Covenant.
“Eligible Senior Debt” means,
at any time in respect of any issuer, each series of the issuer’s
then-outstanding unsecured long-term indebtedness for money borrowed that (a)
upon a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks
most senior among the issuer’s then outstanding classes of unsecured
indebtedness for money borrowed, (b) is then assigned a rating by at least one
NRSRO (provided that this clause (b) shall apply on a Redesignation Date only if
on such date the issuer has outstanding senior long-term indebtedness for money
borrowed that satisfies the requirements of clauses (a), (c) and (d) that is
then assigned a rating by at least one NRSRO), (c) has an outstanding principal
amount of not less than $100,000,000, and (d) was issued through or with the
assistance of a commercial or investment banking firm or firms acting as
underwriters, initial purchasers or placement or distribution
agents. For purposes of this definition as applied to securities with
a CUSIP number, each issuance of long-term indebtedness for money borrowed that
has (or, if such indebtedness is held by a trust or other intermediate entity
established directly or indirectly by the issuer, the securities of such
intermediate entity that have) a separate CUSIP number shall be deemed to be a
series of the issuer’s long-term indebtedness for money borrowed that is
separate from each other series of such indebtedness.
“Eligible Subordinated Debt”
means, at any time in respect of any issuer, each series of the issuer’s
then-outstanding unsecured long-term indebtedness for money borrowed that (a)
upon a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks
senior to the Subordinated Debentures and subordinate to the issuer’s then
outstanding series of unsecured indebtedness for money borrowed that ranks most
senior, (b) is then assigned a rating by at least one NRSRO (provided that this
clause (b) shall apply on a Redesignation Date only if on such date the issuer
has outstanding subordinated long-term indebtedness for money borrowed that
satisfies the requirements in clauses (a), (c) and (d) that is then assigned a
rating by at least one NRSRO), (c) has an outstanding principal amount of not
less than $100,000,000, and (d) was issued through or with the assistance of a
commercial or investment banking firm or firms acting as underwriters, initial
purchasers or placement or distribution agents. For purposes of this
definition as applied to securities with a CUSIP number, each issuance of
long-term indebtedness for money borrowed that has (or, if such indebtedness is
held by a trust or other intermediate entity established directly or indirectly
by the issuer, the securities of such intermediate entity have) a separate CUSIP
number shall be deemed to be a series of the issuer’s long-term indebtedness for
money borrowed that is separate from each other series of such
indebtedness.
“Explicit Replacement
Covenant” means, as to any security or combination of securities, that
the issuer has made a covenant substantially similar to this Replacement Capital
Covenant to the effect that the issuer will redeem, defease or purchase, and any
Subsidiaries of the issuer will purchase, such securities only if and to the
extent that the applicable percentage of the net proceeds raised through the
issuance of specified replacement capital securities that have terms and
provisions at the time of redemption, defeasance or purchase that are as much or
more equity-like than the securities then being redeemed, defeased or purchased,
raised within 180 days prior to the applicable redemption, defeasance or
purchase date, and that the board of directors of the issuer has determined in
good faith and in the board’s reasonable discretion that such covenant is
binding on the issuer for the benefit of one or more series of the long-term
indebtedness for money borrowed of the issuer to the same extent as this
Replacement Capital Covenant is binding on the Corporation for the benefit of
the Holders of the Initial Covered Debt.
“Form 8-K” means a Current
Report on Form 8-K filed with the Commission under the Securities Exchange Act,
and any successor report.
“Form 10-K” means an Annual
Report on Form 10-K filed with the Commission under the Securities Exchange Act,
and any successor report.
“Form 10-Q” means a Quarterly
Report on Form 10-Q filed with the Commission under the Securities Exchange Act,
and any successor report.
“Holder” means, as to the
Covered Debt then in effect, each holder of such Covered Debt as reflected on
the securities register maintained by or on behalf of the Corporation with
respect to such Covered Debt.
“Indenture” means the Junior
Subordinated Indenture, dated as of March 1, 2008, between the Corporation and
The Bank of New York, as trustee.
“Initial Covered Debt” means
the Corporation’s 5.25% Senior Notes, Series D, due 2015 (CUSIP
000000XX0).
“Intent-Based Replacement
Disclosure” means, as to any security or combination of securities
issued, directly or indirectly, that the issuer has publicly stated its
intention, either in the prospectus or other offering document under which such
security or combination of securities were initially offered for sale or in
filings with the Commission made by the issuer or an affiliate under the
Securities Exchange Act prior to or contemporaneously with the issuance of such
securities, that the issuer will redeem, purchase or defease, and any
Subsidiaries of the issuer will purchase, such securities only with net proceeds
raised from securities that have terms and provisions at the time of repayment,
redemption or purchase that are as or more equity-like than the securities then
being redeemed, purchased or defeased, and issued within 180 days prior to the
applicable redemption or purchase date.
“Investor Screen” has the
meaning specified in Section 3(d).
“Largest Subsidiary” means,
from time to time, the Subsidiary of the Corporation with the greatest total
assets that also has outstanding at least one series of Eligible Subordinated
Debt; provided, however, that if no Subsidiary of the Corporation has
outstanding a series of Eligible Subordinated Debt, this term shall mean the
Subsidiary of the Corporation with the greatest total assets that also has
outstanding at least one series of Eligible Senior Debt.
“Mandatorily Convertible Preferred
Stock” means cumulative preferred stock of the Corporation with (a) no
prepayment obligation on the part of the issuer thereof, whether at the election
of the holders or otherwise, and (b) a requirement that the preferred stock
convert into Common Stock within three years from the date of its issuance for a
determinable number of shares or within a range established at the time of
issuance of the preferred stock, subject to customary anti-dilution
adjustments.
“Mandatory Trigger Provision”
means, as to any security or combination of securities, provisions in the terms
thereof or in the related transaction agreements that (a) require, or at its
option in the case of perpetual Non-Cumulative Preferred Stock permit, the
issuer of such security or combination of securities to make payment of
Distributions on such securities only in connection with the issuance and sale
of APM Qualifying Securities, within two years of a failure to satisfy one or
more financial tests set forth in the terms of such securities or related
transaction agreements, in an amount such that the net proceeds of such sale at
least equal the amount of unpaid Distributions on such securities (including
without limitation all deferred and accumulated amounts) and in either case
requires the application of the net proceeds of such sale to pay such unpaid
Distributions; provided
that (i) such Mandatory Trigger Provision shall limit the issuance and sale of
Common Stock and Qualifying Warrants the proceeds of which may be applied to pay
such Distributions pursuant to such provision to the Common Cap, unless the
Mandatory Trigger Provision requires such issuance and sale within one year of
such failure, and (ii) the amount of Qualifying Preferred Stock and still
outstanding Mandatorily Convertible Preferred Stock the net proceeds of which
the issuer may apply to pay such Distributions pursuant to such provision may
not exceed the Preferred Cap, (b) in the case of securities other than perpetual
Non-Cumulative Preferred Stock, prohibit the issuer from purchasing any APM
Qualifying Securities, or any securities that rank pari passu with or junior to
APM Qualifying Securities, the proceeds of which were used to settle deferred
interest during the relevant deferral period prior to the date six months after
the issuer applies the net proceeds of the sales described in clause (a) to pay
such unpaid Distributions in full, (c) in the case of securities other than
perpetual Non-Cumulative Preferred Stock, include a Bankruptcy Claim Limitation
Provision and (d) if deferral of Distributions continues for more than one year
(or such shorter period as may be provided for in the terms of such securities),
prohibit the issuer of such securities from redeeming or purchasing any of its
securities ranking upon the liquidation, dissolution or winding up of the issuer
junior to or pari passu
with any APM Qualifying Securities the proceeds of which were used to settle
deferred Distributions during the relevant deferral period until at least one
year after all deferred Distributions have been paid. For purposes of
this definition of Mandatory Trigger Provision, (1) the issuer will not be
obligated to issue (or use Commercially Reasonable Efforts to issue) any such
APM Qualifying Securities for so long as a Market Disruption Event has occurred
and is continuing; (2) if, due to a Market Disruption Event or otherwise, the
issuer is able to raise and apply some, but not all, of the eligible proceeds
necessary to pay all deferred Distributions on any Distribution Date, the issuer
will apply any available eligible proceeds to pay accrued and unpaid
Distributions on the applicable Distribution Date in chronological order subject
to the Common Cap, the Preferred Cap and the Share Cap (if any), as applicable;
and (3) if the issuer has outstanding more than one class or series of
securities under which it is obligated to sell a type of any such APM Qualifying
Securities and applies some part of the proceeds to the payment of deferred
Distributions, then on any date and for any period the amount of net proceeds
received by the issuer from those sales and available for payment of deferred
Distributions on such securities shall be applied to such securities on a pro
rata basis up to the Common Cap, the Preferred Cap and the Share Cap (if any),
as applicable, in proportion to the total amounts that are due on such
securities. No remedy other than Permitted Remedies will arise by the
terms of such securities or related transaction agreements in favor of the
holders of such securities as a result of the issuer’s failure to pay
Distributions because of the Mandatory Trigger Provision or as a result of the
issuer’s exercise of its right under an Optional Deferral Provision until
Distributions have been deferred for one or more Distribution Periods that total
together at least ten years.
“Market Disruption Event”
means the occurrence or existence of any of the following events or sets of
circumstances:
(a) trading
in securities generally, or in the securities of the issuer (or any Subsidiary
of the issuer that may issue securities in settlement of an Alternative Payment
Mechanism) specifically, on The New York Stock Exchange or any other national
securities exchange or over-the-counter market on which such securities are then
listed or traded shall have been suspended or the settlement of such trading
generally shall have been materially disrupted or minimum prices shall have been
established on any such exchange or market by the Commission, by the relevant
exchange or by any other regulatory body or governmental body having
jurisdiction, and the establishment of such minimum prices materially disrupts
or otherwise has a material adverse effect on trading in, or the issuance and
sale of, such securities;
(b)
the issuer (or a Subsidiary as specified in clause (a)) would be required to
obtain the consent or approval of its shareholders) or a regulatory body
(including, without limitation, any securities exchange) or governmental
authority to issue APM Qualifying Securities and the issuer (or a Subsidiary as
specified in clause (a)) fails to obtain that consent or approval
notwithstanding the commercially reasonable efforts of the issuer (or such
Subsidiary) to obtain that consent or approval or a regulatory authority
instructs the issuer (or a Subsidiary as specified in clause (a)) not to sell or
offer for sale such securities;
(c)
a banking moratorium shall have been declared by the federal or state
authorities of the United States and such moratorium materially disrupts or
otherwise has a material adverse effect on trading in, or the issuance and sale
of, APM Qualifying Securities;
(d)
a material disruption shall have occurred in commercial banking or securities
settlement or clearance services in the United States and such disruption
materially disrupts or otherwise has a material adverse effect on trading in, or
the issuance and sale of, APM Qualifying Securities;
(e)
the United States shall have become engaged in hostilities, there shall have
been an escalation in hostilities involving the United States, there shall have
been a declaration of a national emergency or war by the United States or there
shall have occurred any other national or international calamity or crisis and
such event materially disrupts or otherwise has a material adverse effect on
trading in, or the issuance and sale of, APM Qualifying Securities;
(f)
there shall have occurred such a material adverse change in general domestic or
international economic, political or financial conditions, including without
limitation as a result of terrorist activities, and such change materially
disrupts or otherwise has a material adverse effect on trading in, or the
issuance and sale of, APM Qualifying Securities;
(g)
an event occurs and is continuing as a result of which the offering document for
the offer and sale of the APM Qualifying Securities would, in the reasonable
judgment of the issuer (or a Subsidiary as specified in clause (a)), contain an
untrue statement of a material fact or omit to state a material fact required to
be stated in that offering document or necessary to make the statements in that
offering document not misleading and either (A) the disclosure of that event at
such time, in the reasonable judgment of the issuer (or a Subsidiary as
specified in clause (a)), would have a material adverse effect on the business
of the issuer (or a Subsidiary as specified in clause (a)) or (B) the disclosure
relates to a previously undisclosed proposed or pending material business
transaction, the disclosure of which would impede the ability of the issuer or
any Subsidiary to consummate that transaction, provided that no single
suspension period contemplated by this paragraph (g) shall exceed 90 consecutive
days and multiple suspension periods contemplated by this paragraph (g) shall
not exceed an aggregate of 180 days in any 360-day period; or
(h)
the issuer (or a Subsidiary as specified in clause (a)) reasonably believes, for
reasons other than those referred to in paragraph (g) above, that the offering
document for such offer and sale of APM Qualifying Securities would not be in
compliance with a rule or regulation of the Commission and the issuer (or a
Subsidiary as specified in clause (a)) is unable to comply with such rule or
regulation or such compliance is unduly burdensome, provided that no single
suspension period contemplated by this paragraph (h) shall exceed 90 consecutive
days and multiple suspension periods contemplated by this paragraph (h) shall
not exceed an aggregate of 180 days in any 360-day period.
The
definition of “Market
Disruption Event,” or similar words, as used in any Replacement Capital
Securities, may include less than all of the paragraphs outlined above, as
determined by the Corporation at the time of issuance of such securities, and in
the case of clauses (a), (b), (c) and (d), as applicable to a circumstance where
the Corporation (or a Subsidiary as specified in clause (a)) would otherwise
endeavor to issue preferred stock, shall be limited to circumstances affecting
markets where the Corporation’s (or such Subsidiary’s) preferred stock trades or
where a listing for its trading is being sought.
“Market Value” means, on any
date, the closing sale price per share of Common Stock (or if no closing sale
price is reported, the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask prices) on that
date as reported in composite transactions by The New York Stock Exchange or, if
the Common Stock is not then listed on The New York Stock Exchange, as reported
by the principal U.S. securities exchange on which the Common Stock is traded or
quoted; if the Common Stock is not either listed or quoted on any U.S.
securities exchange on the relevant date, the Market Value will be the average
of the mid-point of the bid and ask prices for the Common Stock on the relevant
date submitted by at least three nationally recognized independent investment
banking firms selected by the Corporation for this purpose.
“Measurement Period” with
respect to any redemption, purchase or defeasance of Subordinated Debentures,
means the period (i) beginning on the date that is 180 days prior to the date of
delivery of notice of such redemption (such date of delivery, the “notice date”) or the date of
such purchase or defeasance and (ii) ending on such notice date or the date of
such purchase or defeasance. Measurement Periods cannot run
concurrently.
“Most Junior Subordinated
Debt” means debt securities of the Corporation that rank upon the
Corporation’s liquidation, dissolution or winding-up junior to all of the
Corporation’s other long-term indebtedness for money borrowed (other than the
Corporation’s long-term indebtedness for money borrowed from time to time
outstanding that by its terms ranks pari passu with such
securities) and pari
passu with the claims of the Corporation’s trade creditors. As
of the date hereof, the term “Most Junior Subordinated Debt” shall include the
Subordinated Debentures.
“Non-Cumulative” means, with
respect to any securities, that the issuer thereof may elect not to make any
number of periodic Distributions without any remedy arising under the terms of
the securities or related agreements in favor of the holders, other than one or
more Permitted Remedies.
“Non-Cumulative Preferred
Stock” means preferred or preference stock having Distributions which may
be skipped by the issuer thereof for any number of Distribution Periods without
any remedy arising under the terms of such securities or related transaction
agreements in favor of the holders of such securities as a result of such
issuer’s failure to pay Distributions, other than Permitted
Remedies.
“No Payment Provision” means a
provision or provisions in the transaction documents for securities (referred to
in this definition as “such
securities”) that include the following:
(a) an
Alternative Payment Mechanism; and
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(b)
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an
Optional Deferral Provision modified and supplemented from the general
definition of that term to provide that the issuer of such securities may,
in its sole discretion, defer in whole or in part payment of Distributions
on such securities for one or more consecutive Distribution periods of up
to five years or, if a Market Disruption Event has occurred and is
continuing, ten years, without any remedy other than Permitted Remedies
and the obligations (and limitations on obligations) described in the
definition “Alternative Payment Mechanism”
applying.
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“NRSRO” means a nationally
recognized statistical rating organization as such term is used under the
Securities Exchange Act.
“Optional Deferral Provision”
means, as to any security or combination of securities, a provision in the terms
thereof or of the related transaction agreements, to the effect that the issuer
thereof may, in its sole discretion, defer in whole or in part payment of
Distributions on such securities for one or more consecutive Distribution
Periods of up to ten years without any remedy other than Permitted Remedies as a
result of such issuer’s failure to pay Distributions.
“Permitted Remedies” means, as
to any security or combination of securities, any one or more of the following
remedies:
(a)
rights in favor of the holders of such securities permitting such holders to
elect one or more directors of the issuer (including any such rights required by
the listing requirements of any stock or securities exchange on which such
securities may be listed or traded); and
(b)
complete or partial prohibitions on the issuer paying Distributions on or
repurchasing Common Stock or other securities that rank pari passu with or junior as
to Distributions to such securities for so long as Distributions on such
securities, including deferred Distributions, have not been paid in full or to
such lesser extent as may be specified in the terms of such
securities.
“Person” means any individual,
corporation, partnership, joint venture, trust, limited liability company or
corporation, unincorporated organization or government or any agency or
political subdivision thereof.
“Preferred Cap” has the
meaning specified in the definition of Alternative Payment
Mechanism.
“Purchase Restriction” has the
meaning specified in the definition of Alternative Payment
Mechanism.
“Qualifying Capital
Securities” means securities (other than Common Stock, Rights to acquire
Common Stock, Mandatorily Convertible Preferred Stock and Debt Exchangeable for
Equity) that rank pari
passu with or junior to the Most Junior Subordinated Debt of the
Corporation upon its liquidation, dissolution or winding up, that, in the
determination of the Corporation’s Board of Directors reasonably construing the
definitions and other terms of this Replacement Capital Covenant, meet one of
the following criteria:
(a) in
connection with any redemption, defeasance or purchase of Subordinated
Debentures prior to the Stepdown Date:
(i)
securities issued by the Corporation or its Subsidiaries that (A) have no
maturity or a maturity of at least 51 years and (B) either (x) are subject to an
Explicit Replacement Covenant and are (I) Non-Cumulative or (II) have a No
Payment Provision or (y) have a Mandatory Trigger Provision and an Optional
Deferral Provision and are subject to Intent-Based Replacement
Disclosure;
(ii)
securities issued by the Corporation or its Subsidiaries that (A) have no
maturity or a maturity of at least 31 years, (B) are subject to an Explicit
Replacement Covenant, (C) have an Optional Deferral Provision and (D) have a
Mandatory Trigger Provision;
(iii)
securities issued by the Corporation or its Subsidiaries that (A) have no
maturity or a maturity of at least 51 years, (B) are subject to an Explicit
Replacement Covenant and (C) have an Optional Deferral Provision;
(iv) securities
issued by the Corporation or its Subsidiaries that (A) have no maturity or a
maturity of at least 51 years, (B) are subject to Intent-Based Replacement
Disclosure and (C) are Non-Cumulative or have a No Payment
Provision;
(v) securities
issued by the Corporation or its Subsidiaries that (A) have no maturity or a
maturity of at least 51 years, (B) have an Optional Deferral Provision and (C)
have a Mandatory Trigger Provision;
(vi)
securities issued by the Corporation or its Subsidiaries that (A) have no
maturity or a maturity of at least 31 years, (B) are subject to an Explicit
Replacement Covenant and (C) are Non-Cumulative or have a No Payment
Provision;
(vii) securities
issued by the Corporation or its Subsidiaries that (A) either (x) have no
maturity or a maturity of at least 31 years and are subject to Intent-Based
Replacement Disclosure or (y) have no maturity or a maturity of at least 21
years and are subject to an Explicit Replacement Covenant, (B) have an Optional
Deferral Provision and (C) have a Mandatory Trigger Provision; or
(viii)
any other preferred stock issued by the Corporation that (A) has no prepayment
obligation on the part of the issuer thereof, whether at the election of the
holders or otherwise, (B) has no maturity or a maturity of at least 51 years and
(C) is subject to an Explicit Replacement Covenant;
(b) in
connection with any redemption, defeasance or purchase of the Subordinated
Debentures on or after the Stepdown Date:
(i) all
securities described under clause (a) of this definition;
(ii) securities
issued by the Corporation or its Subsidiaries that (A) have no maturity or a
maturity of at least 51 years, (B) are subject to Intent-Based Replacement
Disclosure and (C) have an Optional Deferral Provision;
(iii) securities
issued by the Corporation or its Subsidiaries that (A) have no maturity or a
maturity of at least 31 years, (B) are subject to an Explicit Replacement
Covenant and (C) have an Optional Deferral Provision;
(iv) securities
issued by the Corporation or its Subsidiaries that (A) either (x) have no
maturity or a maturity of at least 31 years and are subject to Intent-Based
Replacement Disclosure or (y) have no maturity or a maturity of at least 21
years and are subject to an Explicit Replacement Covenant and (B) are
Non-Cumulative or have a No Payment Provision;
(v) securities
issued by the Corporation or its Subsidiaries that (A) have no maturity or a
maturity of at least 21 years, (B) are subject to Intent-Based Replacement
Disclosure, (C) have an Optional Deferral Provision and (D) have a Mandatory
Trigger Provision; or
(vi) any
other preferred stock issued by the Corporation that (A) has no prepayment
obligation on the part of the issuer thereof, whether at the election of the
holders or otherwise and (B) either (x) has no maturity or a maturity of at
least 51 years and is subject to Intent-Based Replacement Disclosure or (y) has
no maturity or a maturity of at least 31 years and is subject to an Explicit
Replacement Covenant.
“Qualifying Preferred Stock”
means non-cumulative perpetual preferred stock of the Corporation that (a) ranks
pari passu with or
junior to all other preferred stock of the Corporation, and (b) either (x) is
subject to a Explicit Replacement Capital Covenant or (y) is subject to
Intent-Based Replacement Disclosure and has a provision that provides for
mandatory suspension of Distributions upon its failure to satisfy one or more
financial tests set forth therein, and (c) as to which the transaction documents
provide for no remedies as a consequence of non-payment of dividends other than
Permitted Remedies.
“Qualifying Warrants” means
net share settled warrants to purchase Common Stock that have an exercise price
greater than the current Market Value of the issuer’s Common Stock as of their
date of issuance, that do not entitle the issuer to redeem for cash and the
holders of such warrants are not entitled to require the issuer to repurchase
for cash in any circumstance.
“Redesignation Date” means, as
to the then-effective Covered Debt, the earliest of (a) the date that is two
years prior to the final maturity date of such Covered Debt, (b) if the
Corporation elects to redeem or defease, or the Corporation or a majority-owned
Subsidiary of the Corporation elects to purchase, such Covered Debt either in
whole or in part with the consequence that after giving effect to such
redemption, defeasance or purchase the outstanding principal amount of such
Covered Debt is less than $100,000,000, the applicable redemption, defeasance or
purchase date and (c) if the then-outstanding Covered Debt is not Eligible
Subordinated Debt, the date on which the Corporation issues long-term
indebtedness for money borrowed that is Eligible Subordinated Debt.
“Replacement Capital Covenant”
has the meaning specified in the introduction to this instrument.
“Replacement Capital
Securities” means securities that meet one or more of the following
criteria in the determination of the Board of Directors reasonably construing
the definitions and other terms of this Replacement Capital
Covenant:
(a) Common
Stock or rights to acquire Common Stock (including Common Stock or rights to
acquire Common Stock issued pursuant to the Corporation’s dividend reinvestment
plan, direct share purchase program or employee benefit plans);
(b) Debt
Exchangeable for Equity;
(c) Mandatorily
Convertible Preferred Stock; and
(d) Qualifying
Capital Securities.
“Rights to acquire Common
Stock” includes any right to acquire Common Stock, including any right to
acquire Common Stock pursuant to a stock purchase plan or employee benefit
plan. Rights to acquire Common Stock shall include Qualifying
Warrants.
“Securities Exchange Act”
means the Securities Exchange Act of 1934, as amended.
“Share Cap” has the meaning
specified in the definition of Alternative Payment Mechanism.
“Stepdown Date” means the date
that is 50 years prior to the maturity date, as extended, of the Subordinated
Debentures, subject to the following provisos: (i) that the Stepdown Date for
any Subordinated Debenture(s) for which a notice of redemption has been
delivered shall be the date that is 50 years prior to the maturity date of the
Subordinated Debenture(s) as of the date such notice of redemption was delivered
and (ii) that if a redemption of such Subordinated Debenture(s) is not
effectuated by the redemption date contained in such notice, provisio (i) shall
have no effect.
“Subordinated Debentures” has
the meaning specified in Recital A.
“Subsidiary” means, at any
time, any Person the shares of stock or other ownership interests of which
having ordinary voting power to elect a majority of the board of directors or
other managers of such Person are at the time owned, or the management or
policies of which are otherwise at the time controlled, directly or indirectly
through one or more intermediaries (including other Subsidiaries) or both, by
another Person.
“Termination Date” has the
meaning specified in Section 4(a).
