As filed with the Securities and Exchange Commission on April 28, 1997
Registration No. 333-
333- -01
===============================================================================AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 30, 2001
REGISTRATION NO. 333-72646,
NO. 333-72646-01
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form----------------------------------
PRE-EFFECTIVE AMENDMENT
NO. 1 TO
FORM S-3
Registration Statement under the Securities Act ofREGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------------------------------
INDEPENDENT BANK CORP. INDEPENDENT CAPITAL TRUST IIII
(Exact nameName of RegistrantCo-Registrants as specified (Exact name of Registrant asSpecified in its charter) specified in its trust agreement)
MASSACHUSETTS DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
_________ _________their Charters)
MASSACHUSETTS DELAWARE
(State or Other Jurisdiction of Incorporation or (State or Other Jurisdiction of Incorporation or
Organization) Organization)
6022 6719
(Primary Standard Industrial
(Primary Standard Industrial Classification Code Number) (Primary Standard Industrial Classification Code Number)
04-2870273 13-7307281
(IRS Employer Identification Number) (IRS Employer Identification Number)
288 UNION STREET C/O THE BANK OF NEW YORK
ROCKLAND, MASSACHUSETTS 02370 101 BARCLAY STREET
(781) 878-6100 NEW YORK, NEW YORK 10286
(212) 896-7298
(Address, Including Zip Code, Number) Classificationand Telephone Number, Including Area Code, Number)
04-2870273 Applied for
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification No.)
------------------------
288 Union Street
Rockland, Massachusetts 02370
(617) 878-6100
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
------------------------
Richard J. Seaman
Chief Financial Officer
Independent Bank Corp.
288 Union Street
Rockland, Massachusetts 02370
(617)Principal Executive Offices)
----------------------------------
EDWARD H. SEKSAY EDWARD H. SEKSAY
GENERAL COUNSEL ADMINISTRATIVE TRUSTEE
288 UNION STREET C/O THE BANK OF NEW YORK
ROCKLAND, MASSACHUSETTS 02370 101 BARCLAY STREET
(781) 878-6100 NEW YORK, NEW YORK 10286
(212) 896-7298
(Name, address, including zip code,Address, Including Zip Code, and telephone number, including area code,Telephone Number, Including Area Code,
of agentsAgent For Service for service)
------------------------
Copies to:
Norman B. Antin, Esq. Vince Pisano, Esq.
Elias, Matz, Tiernan & Herrick L.L.P. Skadden, Arps, Slate, Meagher & Flom LLP
734 15th Street, N.W. 919 Third Avenue
Washington, D.C. 20005 New York, New York 10022
------------------------Co-Registrants)
----------------------------------
COPIES TO:
NORMAN B. ANTIN, ESQ. RICHARD A. SCHABERG, ESQ.
JEFFREY D. HAAS, ESQ. THACHER PROFFITT & WOOD
KELLEY DRYE & WARREN LLP 1700 PENNSYLVANIA AVENUE, N.W.
8000 TOWERS CRESCENT DRIVE, SUITE 1200 SUITE 800
VIENNA, VIRGINIA 22182 WASHINGTON, D.C. 20006
(703) 918-2300 (202) 347-8400
----------------------------------
Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Formform are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the formationfollowing box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462 under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a holding companypost-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and therelist the Securities Act
registration statement number of the earlier registration statement for the same
offering. / /
If delivery of the prospectus is compliance
with General Instruction G,expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
===================================================================================================
Title of Each Class Amount Proposed Maximum Proposed Maximum Amount of
of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Unit(1) Offering Price(1) Fee(2)PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED SHARE (1) PRICE (1) REGISTRATION FEE (2)
===================================================================================================Cumulative Trust Preferred Securities of 1,000,000 $25 $25,000,000 $5,999.08 (1) (3)
Independent Capital Trust I ...... $28,750,000 100% $28,750,000 $8,713
- ---------------------------------------------------------------------------------------------------III...........
Junior Subordinated Deferrable
Interest Debentures of $25,000,000 100% $25,000,000 (2) N/A
Independent Bank Corp.(2)..................... $28,750,000 100% $28,750,000 N/A
- ---------------------------------------------------------------------------------------------------..............
Independent Bank Corp. Guarantee with respect to the Trust
Preferred Securities(3)........... N/A N/A N/A N/A
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Total........................... $28,750,000(4)respect to the Preferred Securities
(4).....................................
Total..................................... -- 100% $28,750,000(4) $8,713
===================================================================================================$25,000,000 $5,999.08
(1) Estimated solely forSuch amount represents the purposeliquidation amount of computing the registration fee.Independent Capital
Trust III preferred securities and the principal amount of debentures that
may be distributed to holders of such preferred securities upon a
liquidation of Independent Capital Trust III.
(2) No separate consideration will be received for the Junior Subordinated
Deferrable Interest Debenturesdebentures of Independent
Bank Corp. (the "Junior
Subordinated Debentures")which may be distributed upon anya liquidation of Independent
Capital Trust I.III.
(3) The total amount of the registration fee is $6,250.00. The Company applied a
$250.92 pending balance in its account with the Commission from excess fees
previously paid towards this registration fee.
(4) No separate consideration will be received for the Independent Bank Corp.
Guarantee.
(4) Such amount representsguarantee. The guarantee, when taken together with Independent Bank Corp.'s
obligations under the liquidation amount oftrust agreement, the Independent Capital
Trust I Trust Preferred Securitiesindenture and the principal amountdebentures,
each as described herein, will provide a full and unconditional guarantee,
on a subordinated basis, of Junior
Subordinated Debentures that may be distributed to holderspayment of such Trust
Preferred Securities upon any liquidation of Independent Capital Trust I.
------------------------
The Registrants hereby amend this registration statementdistributions on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act ofpreferred
securities.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 or until this registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a)OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
may determine.
==============================================================================MAY DETERMINE.
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- --------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED _______ __, 1997NOVEMBER 30, 2001
PROSPECTUS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
INDEPENDENT BANK CORP. AND THE TRUST MAY NOT SELL THESE SECURITIES UNTIL THE
SECURITIES AND EXCHANGE COMMISSION DECLARES THE REGISTRATION STATEMENT
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
1,000,000 Trust Preferred SecuritiesTRUST PREFERRED SECURITIES
INDEPENDENT CAPITAL TRUST III
% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
FULLY, IRREVOCABLY AND UNCONDITIONALLY GUARANTEED ON A SUBORDINATED BASIS, AS
DESCRIBED IN THIS PROSPECTUS, BY
[LOGO]
---------------------
Independent Capital Trust I
___% Cumulative Trust Preferred Securities
(Liquidation AmountIII is offering 1,000,000 preferred securities at
$25 per Trust Preferred Security)
Fully and Unconditionally Guaranteed, as Described Herein, bysecurity. The preferred securities represent an indirect interest in
Independent Bank Corp.'s % subordinated debentures. The _____% Cumulative Trust Preferred Securities (the "Trust Preferred
Securities") offered herebysubordinated debentures
have the same payment terms as the preferred securities and will represent undivided beneficial interests in
Independent Capital Trust I, abe purchased by
the trust formedusing the proceeds received from its offering of the preferred
securities.
The trust preferred securities have been approved for quotation on the
Nasdaq National Market under the lawssymbol "INDBN." Trading is expected to commence
on or prior to delivery of the State of
Delaware (the "Trust"). Independent Bank Corp., a Massachusetts corporation (the
"Corporation" or "Independent"), will be the owner of all of the beneficial
interests represented by common securities of the Trust (the "Common
Securities," and together with the Trust Preferred Securities, the "Trust
Securities"). The Bank of New York is the Property Trustee of the Trust. The
Trust exists for the exclusive purposes of issuing the Trust Securities and
investing the proceeds thereof in the _____% Junior Subordinated Deferrable
Interest Debentures (the "Junior Subordinated Debentures"), to be issued by the
Corporation, and certain other limited activities described herein. The Junior
Subordinated Debentures are scheduled to mature on ______, 2027 which date may
be shortened (such date, as it may be shortened, the "Stated Maturity Date") to
a date not earlier than ___________, 2002 if certain conditions are met
(including the Corporation having received prior regulatory approval to do so if
then required under applicable capital guidelines or regulatory policies). The
Trust Preferred Securities will have a preference over the Common Securities
under certain circumstances with respect to cash distributions and amounts
payable on liquidation, redemption or otherwise. See "Description of Trust
Preferred Securities-Subordination of Common Securities."
(Continued on next page)
-----------
See "Risk Factors" beginning on page __ for a discussion of certain factors that
should be considered by prospective investors in evaluating an investment in the
Trust Preferred Securities.
-----------preferred securities.
--------------------------
INVESTING IN THE TRUST PREFERRED SECURITIES OFFERED HEREBYINVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 10.
--------------------------
THE TRUST PREFERRED SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR
OTHER OBLIGATIONS OF AANY BANK AND ARE NOT INSURED BY THE BANK INSURANCE FUND OF THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
PER PREFERRED SECURITY TOTAL
---------------------- -----------
Public offering price................................ $25.00 $25,000,000
Proceeds to the trust................................ $25.00 $25,000,000
This is a firm commitment underwriting. Independent Bank Corp. will pay
underwriting commissions of $ per preferred security, or a total of $ ,
to the underwriter for arranging the investment in its subordinated debentures.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION ORNOR ANY STATE SECURITIES
COMMISSION NOR HAS THEAPPROVED OR DISAPPROVED OF THESE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACYADEQUACY OR ADEQUACYACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
================================================================================
Price to Underwriting Proceeds to
Public Commission(1) Trust(2)(3)
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Per Trust Preferred Security..... $25.00 (2) $
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Total(4)......................... $25,000,000 (2) $
================================================================================
(1) The Corporation and the Trust have agreed to indemnify the Underwriters
against certain liabilities, including certain liabilities under the
Securities Act. See "Underwriting."
(2) In view of the fact that the proceeds of the sale of the Trust Preferred
Securities will be invested in the Junior Subordinated Debentures, the
Corporation, as issuer of the Junior Subordinated Debentures, has agreed to
pay the Underwriters, as compensation, $__ per Trust Preferred Security (or
$__________ in the aggregate). See "Underwriting."
(3) Before deducting estimated expenses of $_______ payable by the Corporation.
(4) The Trust has granted the Underwriters a 30-day option to purchase up to
150,000 additional Trust Preferred Securities on the same terms and
conditions set forth above solely to cover over-allotments, if any. If this
option is exercised in full, the total Price to Public will be $28,750,000
and Proceeds to Trust will be $______________. See "Underwriting."
----------
The Trust Preferred Securities are offered by the Underwriters, subject to
prior sale, when, as and if issued to and accepted by the Underwriters and
subject to approval of certain legal matters by counsel for the Underwriters and
to certain other conditions. The Underwriters reserve the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part. It is
expected that delivery of the Trust Preferred Securities will be made through
the facilities of the Depository Trust Company ("DTC") in certificated form in
New York, New York on or about _____ __, 1997 against payment therefor in
immediately available funds.
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Legg Mason Wood Walker Piper Jaffray Inc.
Incorporated
The date of this Prospectusprospectus is ___________ __, 1997, 2001
Information contained is subject to completion or amendment.[MAP]
- YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
INDEPENDENT HAS NOT, AND ITS UNDERWRITER HAS NOT, AUTHORIZED ANY PERSON TO
PROVIDE YOU WITH DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH
DIFFERENT OR INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT.
- INDEPENDENT IS NOT, AND ITS UNDERWRITER IS NOT, MAKING AN OFFER TO SELL
THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT
PERMITTED.
- YOU SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS PROSPECTUS IS
ACCURATE AS OF THE DATE ON THE FRONT COVER OF THIS PROSPECTUS ONLY.
- THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT
RELATES.
TABLE OF CONTENTS
PAGE
--------
Summary..................................................... 1
Selected Consolidated Financial and Other Data.............. 8
Risk Factors................................................ 10
Special Note Regarding Forward-Looking Statements........... 15
Use of Proceeds............................................. 15
Capitalization.............................................. 16
Accounting and Regulatory Treatment......................... 17
Description of The Trust.................................... 18
Description of The Preferred Securities..................... 19
Description of The Debentures............................... 32
Book-Entry Issuance......................................... 41
Description of The Guarantee................................ 43
Relationship Among the Preferred Securities, The Debentures
and The Guarantee......................................... 45
Material Federal Income Tax Consequences.................... 47
ERISA Considerations........................................ 50
Underwriting................................................ 51
Legal Matters............................................... 52
Experts..................................................... 52
Where You Can Get More Information.......................... 52
SUMMARY
THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN, OR INCORPORATED
BY REFERENCE INTO, THIS PROSPECTUS. BECAUSE THIS IS A registration
statement relating to these securities has been filed with the Securities and
Exchange Commission. These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes effective. This
prospectus shall not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any jurisdiction in
which such offer, solicitation, or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
jurisdiction.
(Continued from the previous page)
The Trust Preferred Securities will be represented by one or more global
certificates registered in the name of The Depository Trust Company
("Depository" or "DTC") or its nominee. Beneficial interests in such Trust
Preferred Securities will be shown on, and transfers thereof will be effected
through, records maintained by DTC and its participants. Except as described
herein, Trust Preferred Securities in certificate form will not be issued in
exchange for global certificates. See "Book-Entry Issuance."
Application has been made to list the Trust Preferred Securities on the
Nasdaq National Market. Although the Underwriters have indicated an intention to
make a market in the Trust Preferred Securities, the Underwriters are not
obligated to make a market in the Trust Preferred Securities, and any market
making may be discontinued at any time at the sole discretion of the
Underwriters. There can be no assurance that a market will develop for the Trust
Preferred Securities. See "Risk Factors--Absence of Existing Public Market;
Market Prices" and "Underwriting."
Holders of the Trust Preferred Securities will be entitled to receive
cumulative cash distributions arising from the payment of interest on the Junior
Subordinated Debentures, accruing from the date of original issuance and payable
quarterly in arrears on the ____ day of March, June, September and December each
year, commencing _____________1997, at the annual rate of _____% of the
Liquidation Amount of $25 per Trust Preferred Security ("Distributions"). So
long as no Debenture Event of Default (as defined herein) has occurred and is
continuing, the Corporation will have the right to defer payments of interest on
the Junior Subordinated Debentures at any time and from time to time for a
period not exceeding 20 consecutive quarterly periods with respect to each
deferral period (each, an "Extension Period"), provided that no Extension Period
shall end on a date other than an Interest Payment Date (as defined herein) or
extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due, the Corporation may
elect to begin a new Extension Period, subject to the requirements set forth
herein. If and for so long as interest payments on the Junior Subordinated
Debentures are so deferred, Distributions on the Trust Preferred Securities also
will be deferred and the Corporation will not be permitted, subject to certain
exceptions described herein, to declare or pay any cash distributions with
respect to the Corporation's capital stock or to make any payment with respect
to debt securities of the Corporation that rank pari passu with or junior to the
Junior Subordinated Debentures. During an Extension Period, interest on the
Junior Subordinated Debentures will continue to accrue (and the amount of
Distributions to which holders of the Trust Preferred Securities are entitled
will continue to accumulate) at the rate of _____% per annum, compounded
quarterly, and holders of Trust Preferred Securities will be required to accrue
such deferred interest income for United States federal income tax purposes
prior to the receipt of the cash attributable to such income. See "Description
of Junior Subordinated Debentures--Option to Extend Interest Payment Date" and
"Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount."
2
The Corporation will, through the Guarantee, the Trust Agreement, the
Junior Subordinated Debentures and the Indenture (each as defined herein), taken
together, fully, irrevocably and unconditionally guarantee all of the Trust's
obligations under the Trust Preferred Securities. See "Relationship Among the
Trust Preferred Securities, the Junior Subordinated Debentures and the
Guarantee--Full and Unconditional Guarantee." The Guarantee and the Common
Securities Guarantee will guarantee payments of Distributions and payments upon
liquidation of the Trust or redemption of the Trust Preferred Securities, but in
each case only to the extent that the Trust has funds on hand legally available
therefor and has failed to make such payments, as described herein. See
"Description of Guarantee." If the Corporation fails to make a required payment
on the Junior Subordinated Debentures, the Trust will not have sufficient funds
to make the related payments, including Distributions, on the Trust Preferred
Securities. The Guarantee and the Common Securities Guarantee will not cover any
such payment when the Trust does not have sufficient funds on hand legally
available therefor. In such event, a holder of Trust Preferred Securities may
institute a legal proceeding directly against the Corporation to enforce its
rights in respect of such payment. See "Description of Junior Subordinated
Debentures--Enforcement of Certain Rights by Holders of Trust Preferred
Securities." The obligations of the Corporation under the Guarantee, the Common
Securities Guarantee and the Junior Subordinated Debentures will be unsecured
and will rank subordinate and junior in right of payment to all Senior and
Subordinated Indebtedness (as defined in "Description of Junior Subordinated
Debentures--Subordination"). See "Risk Factors--Ranking of Subordinated
Obligations under the Guarantee and the Junior Subordinated Debentures." In
addition, because the Corporation is a holding company, the Junior Subordinated
Debentures, the Common Securities Guarantee and the Guarantee effectively will
be subordinated to all existing and future liabilities, including deposits, of
the Corporation's subsidiaries.
The Trust Preferred Securities will be subject to mandatory redemption in a
Like Amount (as defined herein), (i) in whole but not in part, on the Stated
Maturity Date upon repayment of the Junior Subordinated Debentures, (ii) in
whole but not in part, at any time prior to _______, 2002, contemporaneously
with the optional prepayment of the Junior Subordinated Debentures by the
Corporation, upon the occurrence and continuation of a Special Event (as defined
herein), and (iii) in whole or in part, on or after _____________, 2002,
contemporaneously with the optional prepayment by the Corporation of all or part
of the Junior Subordinated Debentures, in each case, at a redemption price equal
to the aggregate Liquidation Amount of such Trust Preferred Securities, plus
accumulated but unpaid Distributions thereon to the date of redemption (the
"Redemption Date"). See "Description of Trust Preferred Securities--Redemption."
The Corporation will have the right at any time to terminate the Trust and,
after satisfaction of liabilities of creditors of the Trust as required by
applicable law, to cause a Like Amount of the Junior Subordinated Debentures to
be distributed to the holders of the Trust Preferred Securities in liquidation
of the Trust, subject to (i) the Corporation having received an opinion of
counsel to the effect that such distribution will not be a taxable event to
holders of Trust Preferred Securities and (ii) the prior approval of the Board
of Governors of the Federal Reserve System (the "Federal Reserve") if then
required under applicable capital guidelines or policies of the Federal Reserve.
Unless the Junior Subordinated Debentures are distributed to the
3
holders of the Trust Preferred Securities, in the event of a liquidation of the
Trust as described herein, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, the holders of the Trust Securities
generally will be entitled to receive a Liquidation Amount of $25 per Trust
Preferred Security plus accumulated and unpaid Distributions thereon to the date
of payment. See "Description of Trust Preferred Securities--Liquidation of the
Trust and Distribution of Junior Subordinated Debentures."
-------------------
CERTAIN PERSONS PARTICIPATINGSUMMARY, IT MAY NOT
CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO YOU. THEREFORE, YOU SHOULD
ALSO READ THE MORE DETAILED INFORMATION SET FORTH IN THIS PROSPECTUS,
INDEPENDENT'S FINANCIAL STATEMENTS AND THE OTHER INFORMATION THAT IS
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, BEFORE MAKING A DECISION TO INVEST
IN THE OFFERING MADE HEREBY MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE
TRUST PREFERRED SECURITIES.
SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE
PURCHASE OFINDEPENDENT BANK CORP. AND
ROCKLAND TRUST PREFERRED SECURITIES TO COVER SYNDICATE SHORT POSITIONS AND
THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
4
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at
the Commission's regional offices at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material may also be obtained by
mail from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. If available, such information
also may be accessed through the Commission's electronic data gathering,
analysis and retrieval system ("EDGAR") via electronic means, including the
Commission's home page on the Internet (http://www.sec.gov.). The Corporation's
common stock is traded on the Nasdaq National Market. Such reports, proxy
statements and other information concerning the Corporation also may be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington D.C. 20006.
No separate financial statements of the Trust have been included herein.
The Corporation and the Trust do not consider that such financial statements
would be material to holders of the Trust Preferred Securities because the Trust
is a newly-formed special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as trust assets the Junior Subordinated
Debentures, issuing the Trust Securities and engaging in incidental activities.
See "Independent Capital Trust I," "Description of Trust Preferred Securities,"
"Description of Junior Subordinated Debentures" and "Description of Guarantee."
In addition, the Corporation does not expect that the Trust will file reports,
proxy statements and other information under the Exchange Act with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission are
incorporated into this Prospectus by reference:
1. The Corporation's Annual Report on Form 10-K for the year ended December
31, 1996.
All documents subsequently filed by the Corporation pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of the offering of the Trust Preferred Securities offered hereby
shall be deemed to be incorporated by reference into this Prospectus and to be a
part of this Prospectus from the date of filing of such document. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement.
5
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or other document.
The Corporation will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein (other
than exhibits unless such exhibits are specifically incorporated by reference in
such documents). Requests for such documents should be directed to: Independent
Bank Corp., 288 Union Street, Rockland, Massachusetts 02370, Attention:
Shareholder Relations (telephone (617) 878-6100).
6
SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus. As used herein, (i) the
"Indenture" means the Indenture, to be dated as of ______ __, 1997, as amended
and supplemented from time to time, between the Corporation and The Bank of New
York, as trustee (the "Debenture Trustee"), relating to the Junior Subordinated
Debentures, (ii) the "Trust Agreement" means the Amended and Restated
Declaration of Trust relating to the Trust among the Corporation, as Sponsor,
The Bank of New York, as Property Trustee (the "Property Trustee"), The Bank of
New York (Delaware), as Delaware Trustee (the "Delaware Trustee"), and the
Administrative Trustees named therein (collectively, with the Property Trustee
and Delaware Trustee, the "Issuer Trustees"), (iii) the "Guarantee" means the
Guarantee Agreement relating to the Trust Preferred Securities between the
Corporation and The Bank of New York, as Guarantee Trustee (the "Guarantee
Trustee") and (iv) the "Common Guarantee" means the Guarantee Agreement relating
to the Common Securities.COMPANY, ITS WHOLLY-OWNED SUBSIDIARY
Independent Bank Corp. The Corporation is thea state-chartered, federally-registered bank
holding company organized under Massachusetts law and the sole stockholder of
Rockland Trust Company (the
"Bank"), a Massachusetts trust company whichCompany. Rockland Trust was charteredfounded in 1907. Independent
is headquartered in Rockland, Massachusetts1907 and at December 31, 1996, the
Corporation had consolidated assets of $1.1 billion, deposits of $918.6 millioncurrently offers
its business and stockholders' equity of $81.1 million.
Through the Bank, the Corporation offersindividual customers a full range of commercial, and
retail
banking, and trustinvestment management services through its network of 33 banking offices,
seven51 branches, nine
commercial lending centers, and three investment management and trust service
offices. The phrase, "PEOPLE DO BUSINESS WITH PEOPLE, NOT INSTITUTIONS", which
Rockland Trust has adopted as its motto, underscores the high degree of
personalized attention and service which Rockland Trust strives to consistently
deliver to its customers, a characteristic which management believes
distinguishes Rockland Trust from its competitors.
During 2000, Rockland Trust acquired 16 bank branches, including associated
deposits and loans. The branch acquisition increased Rockland Trust's branch
network by 50%. The branch acquisition also expanded Rockland Trust's geographic
presence on Cape Cod, where 14 of the acquired branches are located, and
solidified Rockland Trust's already strong presence in Brockton, Massachusetts,
the location of the other two trustacquired branches and financial services offices
locatedthe city with the largest
population in Rockland Trust's market area. As a consequence of the branch
acquisition and Rockland Trust's other efforts over the last decade to expand
its geographic reach, Rockland Trust's primary market area currently encompasses
southeastern Massachusetts spanning Plymouth, Barnstable, Norfolk, and Bristol
Countiescounties.
Rockland Trust at September 30, 2001 had $2.1 billion in assets, comprised
primarily of Southeastern
Massachusetts. The Corporationa $1.3 billion loan portfolio. Management believes that Rockland
Trust's loan portfolio is diversified and well balanced with a composition, on a
percentage basis as of such date, of 46.1% in commercial and commercial real
estate loans, 32.2% in consumer loans, 17.3% in residential real estate loans,
and 4.4% in commercial and residential construction loans. Management believes
that the credit quality of its loan portfolio distinguishes Rockland Trust from
other financial institutions. At September 30, 2001, nonperforming loans
currently comprised only locally based0.15% of Rockland Trust's total assets.
Significant growth in core deposits over the past year has increased
Rockland Trust's net interest margin to 4.94% for the quarter ended
September 30, 2001. Rockland Trust is a commercial bank in
Plymouth County. Aswhich is, due to its
Massachusetts trust company charter, also authorized to offer investment advice
and trust services to its customers. Rockland Trust's investment management
division, which currently has approximately $460.0 million of customer money
under management, provides a community focused commercial bank, the Corporation seeks
to service the needssteady source of local customers in its market by developing long-term
deposit and lending relationships. As such, the Corporation has become a
prominent financial institution in Plymouth County, which represents the
majorityfee income.
The key components of its market area. AtRockland Trust's current business strategy include:
INCREASING ROCKLAND TRUST'S MARKET SHARE OF DEPOSITS--At June 30, 19962000 (the
most recent date for deposit market share information), the Bank had approximately 16.6%Rockland Trust held
17.7% of the total deposits in Plymouth County. That amount represents approximately 169% ofCounty, the largest deposit market share
of its closest competitor. In addition, on the lending side of its business, the
Corporation has been the leading originator of residential mortgagesany financial institution in Plymouth County. As of such date, the acquired
Cape Cod branches held a 6.7% deposit market share in Barnstable County, and the
total amount of Rockland Trust's Cape Cod deposits has increased by 12.4%
through September 30, 2001. The ongoing consolidation of other Massachusetts
based financial institutions and the increasing consumer dissatisfaction with
larger banks continues to create opportunities for Rockland Trust to grow
1
its deposit market share through continuing to provide the last five years.
Insuperior personal
service for which Rockland Trust is well known. Rockland Trust trains employees
in its retail branches, in its commercial and residential lending activities,areas, and in
the Bankinvestment management area to cultivate and sustain long-term customer
relationships and, when appropriate, to cross-sell other financial services
offered by Rockland Trust to its customers. Rockland Trust recently created and
filled new business development officer positions to contact businesses and
individuals which are not currently Rockland Trust customers to seek out new
business deposits and sell other services.
CONTINUING ROCKLAND TRUST'S SMALL BUSINESS LENDING FOCUS--Management
believes it has emphasized the origination of
residential and commercialhad great success in originating small business loans withinthroughout
its primary market areas. At December
31, 1996, the Bank's gross loan portfolio consisted of 29.0% mortgage loans
collateralized by commercial real estate, 28.5% mortgage loans collateralized by
residential real estate, 17.9%Typical commercial loans 4.5% real estate constructionrange in size from $25,000 to
$2.0 million. Rockland Trust, however, also has an in-house lending limit of
$26.1 million dollars, which enables Rockland Trust to satisfy the needs of
larger borrowers. Rockland Trust has, within the last year, established a
division to manage small business loans under $50,000. Rockland Trust's
commercial lenders will continue to seek out new business and 20.1% consumer loans. The Banklarger lending
relationships.
MAINTAINING STRONG ASSET QUALITY--Rockland Trust stresses asset quality
through its emphasis on lending in its local markets where management is most
qualified to make educated underwriting decisions and the application ofapply generally
conservative underwriting criteria. 7
The fact that, at September 30, 2001,
nonperforming assets represented only 0.15% of total assets reflect Rockland
Trust's success in maintaining credit quality.
TAKING ADVANTAGE OF FAVORABLE MARKET DEMOGRAPHICS--Plymouth County, which
has historically been Rockland Trust's primary market area, has grown rapidly in
recent years due to the availability of undeveloped land and recent
transportation improvements. The United States Census for 2000 confirmed
favorable market demographics for both Plymouth County and Cape Cod. The census
data showed that Cape Cod exceeded the Massachusetts average for population
growth and that Plymouth County exceeded the Massachusetts averages for both
population growth and median household income. Management believes that future
population increases in Plymouth County and on Cape Cod will provide significant
opportunities for Rockland Trust that can fuel growth.
PURSUING AN OPPORTUNISTIC APPROACH TO NEW BUSINESS OPPORTUNITIES AND
GEOGRAPHIC EXPANSION--Rockland Trust continues to explore potential new lines of
business and opportunities for continued geographic expansion. Rockland Trust
offers a wide range of investment management and trust services to its
customers. Because Rockland Trust believes that there is a significant demand
for these types of services within Rockland Trust's market, Rockland Trust
intends to heavily promote its investment management services with a goal of
increasing the $460.0 million in assets currently under management. Rockland
Trust analyzes its options for generating new types of revenue and its
opportunities for geographic expansion on an ongoing basis. Rockland Trust
intends to expand its product lines and branch network when and as circumstances
warrant.
Independent's primary executive offices as well as those of Rockland Trust
are located at 288 Union Street, Rockland, Massachusetts. Rockland Trust's
headquarters are located in historic Plymouth County, Massachusetts. Both
Independent and Rockland Trust may be reached by calling (781) 878-6100.
INDEPENDENT CAPITAL TRUST III
Independent Capital Trust I
The TrustIII is a statutory business trust formedcreated under
Delaware law uponlaw. Independent created the filingtrust to offer the preferred securities
and to purchase the debentures. The trust has a term of a certificate of30 years, but may be
dissolved earlier as provided in the trust with the Delaware Secretary of State.
The Trust's business and affairs are conducted by the Issuer Trustees: the
Property Trustee, the Delaware Trustee and the three individual
Administrative Trustees, who are officersagreement. Upon issuance of the
Corporation. Thepreferred securities offered by this prospectus, the purchasers in this offering
will own
2
all of the issued and outstanding preferred securities of the trust. In exchange
for Independent's capital contribution to the trust, Independent will own all of
the common securities of the trust.
In May 1997, Independent established Independent Capital Trust exists for the exclusive purposesI which
issued $28.75 million of (i) issuing and selling the Trust
Securities, (ii) using9.28% cumulative trust preferred securities scheduled
to mature in 2027. That trust invested the proceeds fromof the sale of the Trust Securities to
acquire the Junior Subordinated Debenturesthese
securities in $29.64 million of 9.28% junior subordinated debentures issued by
Independent. The trust preferred securities of that trust can be prepaid in
whole or in part on or after May 19, 2002 at a redemption price equal to $25 per
security plus accumulated but unpaid distributions thereon to the Corporation and
(iii) engagingdate of
redemption. The trust preferred securities of Independent Capital Trust I are
quoted on the Nasdaq National Market under the symbol "INDBP."
In January 2000, Independent established Independent Capital Trust II which
issued $25.00 million of 11.00% cumulative trust preferred securities scheduled
to mature in only those other activities necessary, advisable or
incidental thereto. The Junior Subordinated Debentures will be2030. That trust invested the sole
assetsproceeds of the sale of these
securities in $25.8 million of 11.00% junior subordinated debentures issued by
Independent. The trust preferred securities of that trust can be prepaid in
whole or in part on or after January 31, 2002 at a redemption price equal to $25
per security plus accumulated but unpaid distributions thereon to the date of
the redemption. The trust preferred securities of Independent Capital Trust and, accordingly, paymentsII
are quoted on the Nasdaq National Market under the Junior Subordinated
Debentures will besymbol "INDBO." Independent
currently anticipates redeeming these junior subordinated debentures on or after
January 31, 2002. Independent has sought and received the sole revenueapproval of the Trust. AllBoard
of Governors of the Common
Securities will be owned byFederal Reserve System to redeem such debentures. In
connection with such redemption, that trust would redeem the Corporation.outstanding
preferred securities issued thereunder. See "Use of Proceeds" on page 15.
The Trust'strust's principal offices are located at c/o The Bank of New York, 101
Barclay Street, New York, New York 10286, and its telephone number is (212) 815-5359.
The Offering
Trust Preferred Securities
Issuer............................. Independent Capital Trust I
Securities Offered................. 1,000,000 Trust Preferred Securities. The
Trust Preferred Securities represent
undivided beneficial interests in the
Trust's896-7298.
3
THE OFFERING
The issuer................................ Independent Capital Trust III
Securities being offered.................. 1,000,000 preferred securities, which represent
preferred undivided beneficial interests in the assets
of the trust. Those assets which will consist solely of the
debentures and payments received on the debentures.
The trust will sell the preferred securities to the
public for cash. The trust will use that cash to buy the
debentures from Independent.
Offering price............................ $25 per preferred security.
When distributions will be paid to you.... If you purchase the preferred securities, you are
entitled to receive cumulative cash distributions at a
% annual rate. Distributions will accumulate from the
date the trust issues the preferred securities and are
to be paid quarterly on March 31, June 30, September 30
and December 31 of each year, beginning March 31, 2002.
As long as the preferred securities are represented by a
global security, the record date for distributions on
the preferred securities will be the business day prior
to the distribution date. Independent may defer the
payment of cash distributions, as described below.
When the preferred securities must be
redeemed.................................. The debentures will mature and the preferred securities
must be redeemed on , 2031. Independent has
the option, however, to redeem the preferred securities
at any time on or after , 2006. Independent
will not redeem the preferred securities prior to
, 2031 unless it has received the prior approval
of the Board of Governors of the Federal Reserve System.
Redemption of the preferred securities
before , 2031 is possible....... The trust must redeem the preferred securities when the
debentures are paid at maturity or upon any earlier
redemption of the debentures. Independent may redeem all
or part of the debentures at any time on or after
, 2031. In addition, Independent may redeem, at
any time, all of the debentures if:
- there is a change in existing laws or regulations, or
new official administrative or judicial interpretation
or application of these laws and regulations, that
causes the interest Independent pays on the debentures
to no longer be deductible by it for federal tax
purposes; or the trust becomes subject to federal
income tax; or the trust becomes or will become
subject to other taxes or governmental charges;
4
- there is a change in existing laws or regulations that
requires the trust to register as an investment
company; or
- there is a change in the capital adequacy guidelines
of the Federal Reserve that results in the preferred
securities not being counted as Tier 1 capital.
Independent may also redeem debentures at any time, and
from time to time, in an amount equal to the liquidation
amount of any preferred securities it purchases, plus a
proportionate amount of common securities, but only in
exchange for a like amount of the preferred securities
and common securities then owned by Independent.
Redemption of the debentures prior to maturity will be
subject to the prior approval of the Federal Reserve, if
approval is then required. If your preferred securities
are redeemed by the trust, you will receive the
liquidation amount of $25 per preferred security, plus
any accrued and unpaid distributions to the date of
redemption.
Independent has the option to extend the
interest payment period................... The trust will rely solely on payments made by
Independent under the debentures to pay distributions on
the preferred securities. As long as Independent is not
in default under the indenture relating to the
debentures, Independent may, at one or more times, defer
interest payments on the debentures for up to 20
consecutive quarters, but not beyond , 2031.
If Independent defers interest payments on the
debentures:
- the trust will also defer distributions on the
preferred securities;
- the distributions you are entitled to will accumulate;
and
- these accumulated distributions will earn interest at
an annual rate of %, compounded quarterly, until
paid.
At the end of any deferral period, Independent will pay
to the trust all accrued and unpaid interest under the
debentures. The trust will then pay all accumulated and
unpaid distributions to you.
You will still be taxed if distributions
on the preferred securities are
deferred.................................. If a deferral of payment occurs, you will still be
required to recognize the deferred amounts as income for
federal income tax purposes in advance of receiving
these amounts, even if you are a cash-basis taxpayer.
Independent's full and unconditional
guarantee of payment...................... Independent's obligations described in this prospectus,
in the aggregate, constitute a full, irrevocable and
unconditional guarantee by it on a subordinated basis,
of the obligations of the trust under the preferred
securities. Independent has
5
entered into a guarantee agreement whereby it has
guaranteed that the trust will use its assets to pay the
distributions on the preferred securities and the
liquidation amount upon liquidation of the trust.
However, the guarantee does not apply when the trust
does not have sufficient funds to make the payments. If
Independent does not make payments on the debentures,
the trust will not have sufficient funds to make
payments on the preferred securities. In this event,
your remedy is to institute a legal proceeding directly
against Independent for enforcement of payments under
the debentures.
Independent may distribute the debentures
directly to you........................... Independent may, at any time after , 2031,
dissolve the trust and distribute the debentures to you,
subject to the prior approval of the Federal Reserve, if
required. If Independent distributes the debentures,
Independent will use its best efforts to list them on a
national securities exchange or comparable automated
quotation system.
How the securities will rank in right of
payment................................... Independent's obligations under the preferred
securities, debentures and guarantee are unsecured and
will rank as follows with regard to right of payment:
- the preferred securities will rank equally with the
common securities of the trust. The trust will pay
distributions on the preferred securities and the
common securities pro rata. However, if Independent
defaults with respect to the debentures, then no
distributions on the common securities of the trust or
Independent's common stock will be paid until all
accumulated and unpaid distributions on the preferred
securities have been paid;
- Independent's obligations under the debentures and the
guarantee are unsecured and generally will rank junior
in priority to Independent's existing and future
senior and subordinated indebtedness. Independent had
no senior and subordinated indebtedness outstanding at
September 30, 2001. Independent's obligations under
the debentures will rank equal to other debentures
issued by Independent to similar trusts, including the
debentures previously sold to the trusts Independent
previously established.
- because Independent is a holding company, the
debentures and the guarantee will effectively be
subordinated to all depositors' claims, as well as
existing and future liabilities of Independent's
subsidiaries.
Voting rights of the preferred
securities................................ Except in limited circumstances, holders of the
preferred securities will have no voting rights.
Nasdaq National Market symbol............. INDBN.
6
You will not receive certificates......... The preferred securities will be represented by a global
security that will be deposited with and registered in
the name of The Depository Trust Company, New York, New
York, or its nominee. This means that you will not
receive a certificate for the preferred securities, and
your beneficial ownership interests will be recorded
through the DTC book-entry system.
How the proceeds of this offering will be
used...................................... The trust will invest all of the proceeds from the sale
of the preferred securities in the debentures.
Independent estimates that the net proceeds to
Independent from the sale of the debentures to the
trust, after deducting offering expenses and
underwriting commissions, will be approximately $23.9
million. Independent currently expects to use the
estimated net proceeds from the sale of the debentures
to redeem in full on or after January 31, 2002 the
11.00% junior subordinated debentures sold by
Independent to the trust it established in January 2000.
In connection with such redemption, that trust would
redeem its outstanding preferred securities. If an
unexpected acquisition opportunity were to arise after
the sale of the preferred securities offered by this
prospectus, Independent might decide not to redeem such
debentures. Under such circumstances, Independent would
use the proceeds for general corporate purposes.
Initially, the net proceeds may be used to make
short-term marketable investment grade investments.
Independent is not presently engaged in any acquisition
discussions.
Before purchasing the preferred securities, you should carefully consider
the "Risk Factors" beginning on page 10.
7
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
The following table summarizes Independent's selected consolidated financial
information and other financial data. The summary balance sheet data and summary
operations data insofar as they relate to, as of, or for the five years ended
December 31, 2000 are derived from Independent's audited consolidated financial
statements. The summary balance sheet data and summary operations data as of or
for the nine-month periods ended September 30, 2001 and 2000 are derived from
Independent's unaudited consolidated financial statements. In Independent's
opinion, all adjustments, consisting solely of normal recurring adjustments,
necessary for a fair presentation of results as of or for the Junior Subordinated Debenturesnine-month periods
ended September 30, 2001 and payments thereunder.
Distributions...................... The Distributions payable on each Trust
Preferred Security will2000 have been included. This information should be
fixed at a rate
per annumread together with "Management's Discussion and Analysis of ___%Financial Condition
and Results of the Liquidation Amount
of $25 per Trust Preferred Security, will be
cumulative, will accrue from the date of
issuance of the Trust Preferred Securities,Operations" and will be payable quarterly in arrears on
the __ day of March, June, September and
December of each year, commencing on ______
__, 1997 (subject to possible deferral as
described below). The amount of each
Distribution due with respect to the Trust
Preferred Securities will include amounts
accrued through the date the Distribution
payment is due. See "Description of the
Trust Preferred Securities--Distributions."
Extension Periods.................. So long as no Debenture Event of Default (as
defined herein) has occurred and is
continuing, the Corporation shall have the
right to defer the payment of interest on
the Junior Subordinated Debentures. During
an Extension Period, Distributions on Trust
Preferred Securities will be deferred. No
Extension Period will exceed 20 consecutive
quarterly periods, end on a date other than
an Interest Payment Date or extend beyond
the Stated Maturity Date. See "Description
of Junior Subordinated Debentures--Option to
Extend Interest Payment Date" and "Certain
Federal Income Tax Consequences--Interest
Income and Original Issue Discount."
8
Maturity........................... The Junior Subordinated Debentures will
mature on ______, 2027 which date may be
shortened (such date, as it may be
shortened, the"Stated Maturity Date") to a
date not earlier than _____, 2002 if certain
conditions are met (including the
Corporation having received prior approval
of the Federal Reserve to do so if then
required under applicable capital guidelines
or policies of the Federal Reserve).
Ranking............................ The Trust Preferred Securities will rank
pari passu, and payments thereon will be
made pro rata, with the Common Securities
except as described under "Description of
Trust Preferred Securities - Subordination
of Common Securities." The Junior
Subordinated Debentures will rank pari passu
with all other junior subordinated
debentures (if any) issued by the
Corporation (the "Other Debentures"), which
are issued and sold (if at all) to other
trusts established by the Corporation (if
any), in each case similar to the Trust
("Other Trusts"), and will constitute
unsecured obligations of the Corporation and
will rank subordinate and junior in right of
payment to all current and future Senior and
Subordinated Indebtedness to the extent and
in the manner set forth in the Indenture.
See "Description of Junior Subordinated
Debentures." The Guarantee will rank pari
passu with all other guarantees (if any)
issued by the Corporation with respect to
trust preferred securities (if any) issued
by Other Trusts ("Other Guarantees") and
will constitute an unsecured obligation of
the Corporation and will rank subordinate
and junior in right of payment to all Senior
Indebtedness to the extent and in the manner
set forth in the Guarantee Agreement. See
"Description of Guarantee." In addition,
because the Corporation is a holding
company, the Junior Subordinated DebenturesIndependent's consolidated financial statements
and the Guarantee will be effectively
subordinated to all existing and future
liabilities of the Corporation's
subsidiaries, including the Bank's deposit
liabilities. See "Description of Junior
Subordinated Debentures--Subordination."
9
Redemption......................... The Trust Preferred Securities will be
subject to mandatory redemption in a Like
Amount, (i) in whole but not in part,related notes incorporated by reference into this prospectus from
Independent's Annual Report on the
Stated Maturity Date upon repayment of the
Junior Subordinated Debentures, (ii) in
whole but not in part, at any time prior to
_______, 2002, contemporaneously with the
optional prepayment of the Junior
Subordinated Debentures by the Corporation
upon the occurrence and continuation of a
Special Event (as defined herein) and (iii)
in whole or in part, on or after _______,
2002, contemporaneously with the optional
prepayment by the Corporation of all or part
of the Junior Subordinated Debentures, in
each case, at a redemption price equal to
the accrued and unpaid interest on the Trust
Preferred Securities so redeemed to the
Redemption Date, plus 100% of the principal
amount thereof. See "Description of Trust
Preferred Securities--Redemption" and
"Description of Junior Subordinated
Debentures--Special Event Prepayment."
Distribution of Junior
Subordinated Debentures............ The Corporation has the right at any time to
terminate the Trust and cause the Junior
Subordinated Debentures to be distributed to
holders of Trust Preferred Securities in
liquidation of the Trust, subject the
Corporation having received (i) an opinion
of counsel that such distribution will not
be a taxable event to the holders of the
Trust Preferred Securities and (ii) prior
approval of the Federal Reserve to do so if
then required under applicable capital
guidelines or policies of the Federal
Reserve. See "Description of the Trust
Preferred Securities--Distribution of Junior
Subordinated Debentures."
Absence of Market for the The Trust Preferred Securities will be a new
Trust Preferred issue of securities for which there
Securities......................... currently is no market. Although the
Underwriters have informed the Trust and the
Corporation that they currently intend to
make a market in the Trust Preferred
Securities, the Underwriters are not
obligated to do so, and any such market
making may be discontinued at any time
without notice. Accordingly, there can be no
assurance as to the development or liquidity
of any market for the Trust Preferred
Securities. The Trust and the Corporation
have applied for quotation of the Trust
Preferred Securities on the Nasdaq National
Market. See "Underwriting."
10
Guarantee.......................... The Corporation has guaranteed the payment
of Distributions and payments on liquidation
or redemption of the Trust Preferred
Securities, but only in each case to the
extent of funds held by the Trust, as
described herein. The Corporation and the
Trust believe that, taken together, the
obligations of the Corporation under the
Guarantee, the Trust Agreement, the Junior
Subordinated Debentures and the Indenture
provide, in the aggregate, a full,
irrevocable and unconditional guaranty, on a
subordinated basis, of all of the
obligations of the Corporation relating to
the Trust Preferred Securities. The
obligations of the Corporation under the
Guarantee and the Trust Preferred Securities
are subordinate and junior in right of
payment to all current and future Senior and
Subordinated Indebtedness of the
Corporation. If the Trust has insufficient
funds to pay Distributions on the Trust
Preferred Securities (i.e., if the
Corporation has failed to make required
payments under the Junior Subordinated
Debentures), a holder of the Trust Preferred
Securities would have the right to institute
a legal proceeding directly against the
Corporation to enforce payment of such
Distributions to such holder. See
"Description of Junior Subordinated
Debentures--Enforcement of Certain Rights by
Holders of the Trust Preferred Securities,"
"Debenture Events of Default" and
"Description of Guarantee."
Limited Voting Rights.............. Holders of Trust Preferred Securities
generally will have limited voting rights
relating only to the modification of the
Trust Preferred Securities and the exercise
of the Trust's rights as holder of Junior
Subordinated Debentures. Holders of Trust
Preferred Securities will not be entitled to
vote to appoint, remove or replace, or to
increase or decrease the number of, the
Issuer Trustees, which voting rights are
vested exclusively in the holder of the
Common Securities except upon the occurrence
of certain events described herein.
Proposed Nasdaq National
Market Symbol......................
Use of Proceeds.................... All of the proceeds to the Trust from the
sale of the Trust Securities will be
invested by the Trust in the Junior
Subordinated Debentures. The Corporation
intends to use the net proceeds from the
sale of the Junior Subordinated Debentures
for general corporate purposes, including
contributions to the Bank to fund its
operations and the funding of repurchases of
the Corporation's common stock which may be
made from time to time. Initially, the net
proceeds may be used to make short-term
investments. See "Use of Proceeds."
Risk Factors....................... For a discussion of considerations relevant
to an investment in the Trust Preferred
Securities which should be carefully
considered by prospective investors, see
"Risk Factors."
11
RISK FACTORS
Prospective purchasers of the Trust Preferred Securities should carefully
review the information contained elsewhere in this Prospectus and should
particularly consider the following matters. Information contained in this
Prospectus contains "forward-looking statements" which can be identified by the
use of forward-looking terminology such as "believes," "expects," "may," "will,"
"should," "projected," "contemplates" or "anticipates" or the negative thereof
or other variations thereon or comparable terminology. No assurance can be given
that the future results covered by the forward-looking statements will be
achieved. Certain of the following matters constitute cautionary statements
identifying important factors with respect to such forward-looking statements,
including certain risks and uncertainties, that could cause actual results to
vary materially from the future results covered in such forward-looking
statements. Other factors, such as the general state of the economy, could also
cause actual results to vary materially from the future results covered in such
forward-looking statements.
Ranking of Subordinated Obligations Under the Guarantee and the Junior
Subordinated Debentures; Limitations on Source of Funds
The obligations of the Corporation under the Guarantee issued by it for the
benefit of the holders of Trust Preferred Securities, as well as under the
Junior Subordinated Debentures, will be unsecured and will rank subordinate and
junior in right of payment to all current and future Senior and Subordinated
Indebtedness to the extent and in the manner set forth in the Guarantee and the
Indenture, respectively. No payment may be made of the principal of, or interest
on the Junior Subordinated Debentures, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Junior Subordinated
Debentures, at any time when (i) there shall have occurred and be continuing a
default in any payment in respect of any Senior and Subordinated Indebtedness,
or there has been an acceleration of the maturity thereof because of a default,
or (ii) in the event of the acceleration of the maturity of the Junior
Subordinated Debentures, until payment has been made on all Senior and
Subordinated Indebtedness. At December 31, 1996, the Corporation had no Senior
Indebtedness outstanding. Because the Corporation is a holding company, the
right of the Corporation to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization or otherwise
(and thus the ability of holders of the Trust Preferred Securities to benefit
indirectly from such distribution) is subject to the prior claims of creditors
of that subsidiary (including depositors, in the case of the Bank), except to
the extent that the Corporation may itself be recognized as a creditor of that
subsidiary. At December 31, 1996, the subsidiary of the Corporation had total
liabilities (excluding liabilities owed to the Corporation) of $1.0 billion.
Accordingly, the Junior Subordinated Debentures effectively will be subordinated
to all existing and future liabilities of the Corporation's subsidiary and
holders of Junior Subordinated Debentures should look only to the assets of the
Corporation for payments on the Junior Subordinated Debentures. The Guarantee
will constitute an unsecured obligation of the Corporation and will rank
subordinate and junior in right of payment to all current and future Senior and
Subordinated Indebtedness in the same manner as the Junior Subordinated
Debentures. None of the Indenture, the Guarantee or the Trust Agreement places
any limitation on the amount of secured or unsecured debt, including Senior and
Subordinated
12
Indebtedness, that may be incurred by the Corporation or any of its
subsidiaries. See "Description of Guarantee--Status of the Guarantee" and
"Description of Junior Subordinated Debentures-- "General" and
"--Subordination."
The ability of the Trust to pay amounts due on the Trust Preferred
Securities is solely dependent upon the Corporation making payments on the
Junior Subordinated Debentures as and when required.
The Corporation is a holding company and almost all of the operating assets
of the Corporation are owned by the Corporation's subsidiary. The Corporation
relies primarily on dividends from the Bank to pay dividends to its stockholders
and to meet its obligations for payment of its corporate expenses. There are
regulatory limitations on the payment of dividends directly or indirectly to the
Corporation from the Bank. As of December 31, 1996, under applicable banking
statutes and the Bank's dividend policy, the total capital available for payment
of dividends by the Bank to the Corporation was approximately $24 million.
However, federal and state bank regulatory agencies have the power to prohibit
any act, including the payment of dividends, if such act would reduce the Bank's
capital to a point that, in their opinion, would render the Bank
undercapitalized and thus constitute an unsafe or unsound banking practice. In
addition to restrictions on the payment of dividends, the Bank is subject to
certain restrictions imposed by federal law on any extensions of credit to, and
certain other transactions with, the Corporation and certain other affiliates,
and on investments in stock or other securities thereof. Such restrictions
prevent the Corporation and such other affiliates from borrowing from the Bank
unless the loans are secured by various types of collateral. Further, such
secured loans, other transactions and investments by the Bank are generally
limited in amount as to the Corporation and as to each of such other affiliates
to 10% of the Bank's capital and surplus and as to the Corporation and all of
such other affiliates to an aggregate of 20% of the Bank's capital and surplus.
Option to Extend Interest Payment Period; Tax Consequences; Market Price
Consequences
So long as no Debenture Event of Default (as defined herein) shall have
occurred and be continuing, the Corporation will have the right under the
Indenture to defer payments of interest on the Junior Subordinated Debentures at
any time or from time to time for a period not exceeding 20 consecutive
quarterly periods with respect to each Extension Period, provided that no
Extension Period shall end on a date other than an Interest Payment Date or
extend beyond the Stated Maturity Date. As a consequence of any such deferral,
quarterly Distributions on the Trust Securities by the Trust will be deferred
(and the amount of Distributions to which holders of the Trust Securities are
entitled will accumulate additional Distributions thereon at the rate of _____%
per annum, compounded quarterly) from the relevant payment date for such
Distributions during any such Extension Period. During the pendency of any
Extension Period, the Corporation generally will be prohibited from declaring or
paying dividends on the Corporation's capital stock or from making payments with
respect to debt securities which rank pari passu with or junior to the Junior
Subordinated Debentures. See "Description of Trust Preferred
Securities--Distributions."
13
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 20 consecutive quarterly periods, end on a
date other than an Interest Payment Date or to extend beyond the Stated Maturity
Date. Upon the termination of any Extension Period and the payment of all
interest then accrued and unpaid on the Junior Subordinated Debentures (together
with interest thereon at the annual rate of _____%, compounded quarterly, to the
extent permitted by applicable law), the Corporation may elect to begin a new
Extension Period, subject to the above requirements. There is no limitation on
the number of times that the Corporation may elect to begin an Extension Period.
See "Description of Trust Preferred Securities--Distributions" and "Description
of Junior Subordinated Debentures--Option to Extend Interest Payment Date."
The Corporation has no current plan to exercise its right to defer payments
of interest on the Junior Subordinated Debentures. However, should the
Corporation exercise its right to defer payments of interest on the Junior
Subordinated Debentures, each holder of Trust Preferred Securities will be
required to accrue income (in the form of original issue discount ("OID")) in
respect of the deferred stated interest allocable to its Trust Securities for
United States federal income tax purposes, which will be allocated but not
distributed to holders of Trust Securities. As a result, each holder of Trust
Preferred Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash related
to such income from the Trust if the holder disposes of the Trust Preferred
Securities prior to the record date for the payment of Distributions thereafter.
See "Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount" and "--Sales of Trust Preferred Securities."
Should the Corporation elect to exercise its right to defer payments of
interest on the Junior Subordinated Debentures in the future, the market price
of the Trust Preferred Securities is likely to be affected. A holder that
disposes of its Trust Preferred Securities during an Extension Period,
therefore, might not receive the same return on its investment as a holder that
continues to hold its Trust Preferred Securities. In addition, the mere
existence of the Corporation's right to defer payments of interest on the Junior
Subordinated Debentures may cause the market price of the Trust Preferred
Securities to be more volatile than the market prices of other securities that
are not subject to such deferrals.
Special Event Redemption
Upon the occurrence and continuation of a Special Event (defined as a Tax
Event, an Investment Company Event or a Regulatory Capital Event (in each case
as defined under "Description of Junior Subordinated Debentures--Special Event
Prepayment")) (whether occurring before or after _____, 2002) the Corporation
will have the right to prepay the Junior Subordinated Debentures in whole (but
not in part) at 100% of the principal amount together with accrued but unpaid
interest to the date fixed for redemption within 90 days following the
occurrence of such Special Event and therefore cause a mandatory redemption of
the Trust Preferred Securities at a redemption price equal to the aggregate
Liquidation Amount of such
14
Trust Preferred Securities, plus accrued and unpaid interest thereon. The
exercise of such right is subject to the Corporation having received any
required regulatory approval. See "Description of Trust Preferred
Securities--Redemption."
Proposed Tax Legislation
On February 6, 1997, as part of President Clinton's Fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation that would,
among other things, deny an issuer a deduction for United States federal income
tax purposes for the payment of interest on instruments with characteristics
similar to the Junior Subordinated Debentures. If the proposed legislation were
enacted in its current form, it is not expected to apply to the Junior
Subordinated Debentures since the proposed effective date for this provision is
the date of first committee action. There can be no assurances, however, that
the proposed legislation, if enacted, or similar legislation enacted after the
date hereof would not adversely affect the tax treatment of the Junior
Subordinated Debentures, resulting in a Tax Event, which would permit the
Corporation, upon the approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve, to cause a
redemption of the Trust Preferred Securities by electing to prepay the Junior
Subordinated Debentures. See "Description of Trust Preferred
Securities--Redemption" and "Description of Junior Subordinated
Debentures--Special Event Prepayment." See also "Certain Federal Income Tax
Consequences - Proposed Tax Legislation."
Liquidation Distribution of Junior Subordinated Debentures
The Corporation will have the right at any time to terminate the Trust and,
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, to cause the Junior Subordinated Debentures to be distributed to
the holders of the Trust Preferred Securities in liquidation of the Trust. Such
right is subject to (i) the Corporation having received an opinion of counsel to
the effect that such distribution will not be a taxable event to the holders of
the Trust Preferred Securities and (ii) the prior approval of the Federal
Reserve to do so if then required under applicable capital guidelines or
policies of the Federal Reserve and the receipt of any other required regulatory
approval. Under current United States federal income tax law, a distribution of
Junior Subordinated Debentures upon the dissolution of the Trust would not be a
taxable event to holders of the Trust Preferred Securities. Upon the occurrence
of a Special Event, a dissolution of the Trust in which holders of the Trust
Preferred Securities receive cash would be a taxable event to such holders. See
"Certain Federal Income Tax Considerations--Receipt of Junior Subordinated
Debentures or Cash Upon Liquidation of the Trust."
Shortening of Stated Maturity of Junior Subordinated Debentures
The Corporation will have the right at any time to shorten the maturity of
the Junior Subordinated Debentures to a date not earlier than five years from
the date of issuance and thereby cause the Trust Preferred Securities to be
redeemed on such earlier date. The exercise of such right is subject to the
Corporation having received prior approval of the Federal Reserve
15
if then required under applicable capital guidelines or policies of the Federal
Reserve. See "Description of Junior Subordinated Debentures--Redemption."
Possible Adverse Effect on Market Prices
There can be no assurance as to the market prices for the Trust Preferred
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for Trust Preferred Securities if a termination of the Trust were to
occur. Accordingly, the Trust Preferred Securities or the Junior Subordinated
Debentures may trade at a discount from the price that the investor paid to
purchase the Trust Preferred Securities offered hereby. Because holders of Trust
Preferred Securities may receive Junior Subordinated Debentures in liquidation
of the Trust and because Distributions are otherwise limited to payments on the
Junior Subordinated Debentures, prospective purchasers of the Trust Preferred
Securities are also making an investment decision with regard to the Junior
Subordinated Debentures and should carefully review all the information
regarding the Junior Subordinated Debentures contained herein. See "Description
of Junior Subordinated Debentures."
Rights Under the Guarantee
The Guarantee will guarantee to the holders of the Trust Preferred
Securities the following payments, to the extent not paid by or on behalf of the
Trust: (i) any accumulated and unpaid Distributions required to be paid on the
Trust Preferred Securities, to the extent that the Trust has funds on hand
legally available therefor at such time, (ii) the redemption price with respect
to the Trust Preferred Securities called for redemption, to the extent that the
Trust has funds on hand legally available therefor at such time and (iii) upon a
voluntary or involuntary termination, winding up or liquidation of the Trust
(unless the Junior Subordinated Debentures are distributed to holders of the
Trust Preferred Securities), the lesser of (a) the aggregate of the Liquidation
Amount and all accumulated and unpaid Distributions to the date of payment, to
the extent that the Trust has funds on hand legally available therefor at such
time, and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Trust Preferred Securities at such time, after
the satisfaction of liabilities to creditors of the Trust as provided by
applicable law.
The holders of a majority in Liquidation Amount of the Trust Preferred
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust power conferred
upon the Guarantee Trustee under the Guarantee. Any holder of the Trust
Preferred Securities may institute a legal proceeding directly against the
Corporation to enforce its rights under the Guarantee without first instituting
a legal proceeding against the Trust, the Guarantee Trustee or any other person
or entity. If the Corporation defaults on its obligation to pay amounts payable
under the Junior Subordinated Debentures, the Trust will not have sufficient
funds for the payment of Distributions or amounts payable on redemption of the
Trust Preferred Securities or otherwise, and, in such event, holders of the
Trust Preferred Securities will not be able to rely upon the Guarantee for
payment of such amounts. Instead, in the event a Debenture
16
Event of Default shall have occurred and be continuing and such event is
attributable to the failure of the Corporation to pay the principal or interest
(including Additional Sums, as defined below, if any), on the Junior
Subordinated Debentures on the payment date on which such payment is due and
payable, then a holder of Trust Preferred Securities may institute a legal
proceeding directly against the Corporation for enforcement of payment to such
holder of the aggregate Liquidation Amount of the Trust Preferred Securities of
such holder (a "Direct Action"). Notwithstanding any payments made to a holder
of Trust Preferred Securities by the Corporation in connection with a Direct
Action, the Corporation shall remain obligated to pay the principal and interest
(including Additional Sums, if any), on the Junior Subordinated Debentures, and
the Corporation shall be subrogated to the rights of the holder of such Trust
Preferred Securities with respect to payments on the Trust Preferred Securities
to the extent of any payments made by the Corporation to such holder in any
Direct Action. Except as described herein, holders of Trust Preferred Securities
will not be able to exercise directly any other remedy available to the holders
of the Junior Subordinated Debentures or to assert directly any other rights in
respect of the Junior Subordinated Debentures. See "Description of Junior
Subordinated Debentures--Enforcement of Certain Rights by Holders of Trust
Preferred Securities," "--Debenture Events of Default" and "Description of
Guarantee." The Trust Agreement will provide that each holder of Trust Preferred
Securities by acceptance thereof agrees to the provisions of the Indenture. The
Bank of New York will act as Guarantee Trustee and will hold the Guarantee for
the benefit of the holders of the Trust Preferred Securities. The Bank of New
York will also act as Property Trustee and as Debenture Trustee under the
Indenture. The Bank of New York (Delaware) will act as Delaware Trustee under
the Trust Agreement.
Limited Covenants
The covenants in the Indenture are limited, and there are no covenants
relating to the Corporation in the Trust Agreement. As a result, neither the
Indenture nor the Trust Agreement protects holders of Junior Subordinated
Debentures, or Trust Preferred Securities, respectively, in the event of a
material adverse change in the Corporation or the Corporation's financial
condition or results of operations or limits the ability of the Corporation or
any subsidiary to incur additional indebtedness. Therefore, the provisions of
these governing instruments should not be considered a significant factor in
evaluating whether the Corporation will be able to comply with its obligations
under the Junior Subordinated Debentures or the Guarantee.
Limited Voting Rights
Holders of Trust Preferred Securities generally will have limited voting
rights relating only to the modification of the Trust Preferred Securities and
the exercise of the Trust's rights as holder of Junior Subordinated Debentures.
Holders of Trust Preferred Securities will not be entitled to vote to appoint,
remove or replace, or to increase or decrease the number of, the Issuer
Trustees, which voting rights are vested exclusively in the holder of the Common
Securities except upon the occurrence of certain events described herein. The
Property Trustee, the Administrative Trustees and the Corporation may amend the
Trust Agreement without the consent of holders of Trust Preferred Securities to
ensure that the Trust will be classified for United
17
States federal income tax purposes as a grantor trust. Holders of Trust
Preferred Securities will have no voting rights with respect to any matters
submitted to a vote of the Corporation's stockholders. See "Description of Trust
Preferred Securities--Voting Rights; Amendment of the Trust Agreement" and
"--Removal of Issuer Trustees."
Absence of Existing Public Market
There is no existing market for the Trust Preferred Securities. Application
has been made to list the Trust Preferred Securities on the Nasdaq National
Market. There can be no assurance that an active and liquid trading market for
the Trust Preferred Securities will develop or that a continued listing of the
Trust Preferred Securities will be available on the Nasdaq National Market.
Although the Underwriters have informed the Trust and the Corporation that the
Underwriters intend to make a market in the Trust Preferred Securities offered
hereby, the Underwriters are not obligated to do so and any such market-making
activity may be terminated at any time without notice to the holders of the
Trust Preferred Securities. Future trading prices of the Trust Preferred
Securities will depend on many factors including, among other things, prevailing
interest rates, the operating results and financial condition of the
Corporation, and the market for similar securities.
18
Trading Characteristics of the Trust Preferred Securities
The Trust Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debentures are deemed to have been issued with OID) and who
disposes of its Trust Preferred Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest on
the Junior Subordinated Debentures through the date of disposition in income as
ordinary income (i.e., interest or, possibly, OID), and to add such amount to
its adjusted tax basis in its share of the underlying Junior Subordinated
Debentures deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which will include all accrued but unpaid
interest), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes. See "Certain Federal Income Tax
Considerations--Interest Income and Original Issue Discount" and "--Sales of
Trust Preferred Securities."
INDEPENDENT BANK CORP.
The Corporation is the holding company of the Bank, a Massachusetts trust
company which was chartered in 1907. Independent is headquartered in Rockland,
Massachusetts and at December 31, 1996, the Corporation had consolidated assets
of $1.1 billion, deposits of $918.6 million and stockholder's equity of $81.1
million.
Through the Bank, the Corporation provides a full range of commercial and
retail banking and trust services through its network of 33 banking offices,
seven commercial lending centers, and two trust and financial services offices
located in the Plymouth, Norfolk, and Bristol Counties of Southeastern
Massachusetts. The Corporation is the only locally based commercial bank in
Plymouth County. As a community focused commercial bank, the Corporation seeks
to service the needs of local customers in its market by developing long-term
deposit and lending relationships. As such, the Corporation has become a
prominent financial institution in Plymouth County, which represents the
majority of its market area. At June 30, 1996 (the most recent date for deposit
market share information), the Bank had approximately 16.6% of the deposits in
Plymouth County. That amount represents approximately 169% of market share of
its closest competitor. In addition, on the lending side of its business, the
Corporation has been the leading originator of residential mortgages in Plymouth
County for the last five years.
In its lending activities, the Bank has emphasized the origination of
residential and commercial loans within its primary market areas. At December
31, 1996, the Bank's gross loan portfolio consisted of 29.0% mortgage loans
collateralized by commercial real estate, 28.5% mortgage loans collateralized by
residential real estate, 17.9% commercial loans, 4.5% real estate construction
loans, and 20.1% consumer loans. The Bank stresses asset quality through its
emphasis on lending in its local markets where management is most qualified to
make educated underwriting decisions and the application of generally
conservative underwriting criteria.
19
The Corporation is registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended ("BHCA"), and as such is subject to
regulation by the Federal Reserve. The Bank is subject to regulation and
examination by the Commissioner of Banks of the Commonwealth of Massachusetts
(the "Commissioner") and the Federal Deposit Insurance Corporation ("FDIC"). The
majority of Rockland's deposit accounts are insured to the maximum extent
permitted by law by the Bank Insurance Fund ("BIF") which is administered by the
FDIC. In 1994, the Bank purchased the deposits of three branches of a failed
savings and loan association from the Resolution Trust Corporation. These
deposits are insured to the maximum extent permitted by law by the Savings
Association Insurance Fund ("SAIF").
The Corporation currently is in compliance with all regulatory capital
requirements. At December 31, 1996, the Corporation had Tier 1 capital and total
capital equal to 10.89% and 12.15% of total risk-adjusted assets, respectively,
and Tier 1 leverage capital equal to 7.35% of total assets. The Corporation
reported net income of $11.6 million, or $0.79 per share,Form 10-K for the year ended December 31, 1996, which equated to a 15.2% return2000
and Independent's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2001, June 30, 2001 and September 30, 2001. Results for past periods
are not necessarily indicative of average equity and 1.13%
return on average assets.
The principal executive offices of the Corporation are located at 288 Union
Street, Rockland, Massachusetts 02370, and its telephone number is (617)
878-6100.
20
USE OF PROCEEDS
The proceeds to the Trust from the offering of the Trust Preferred
Securities will be $25,000,000. All of the proceeds from the sale of the Trust
Preferred Securities and the Common Securities will be invested by the Trust in
the Junior Subordinated Debentures. The estimated net proceeds of approximately
$__________ will be available to the Corporation for general corporate purposes,
including contributions to the Bank to fund its operations, the funding of one
or more future acquisitions and the funding of repurchases of the Corporation's
common stock whichresults that may be made from time to time. From time to time,expected for any future
period, and results for the Corporation investigates and holds discussions and negotiations in connection
with possible transactions with other financial institutions and holding
companies thereof. Asnine-month period ended September 30, 2001 are not
necessarily indicative of the date of this Prospectus, the Corporation has not
entered into any agreements or understandings with respect to any such
acquisitions or any other material transactions of the type referred to above.
Initially, the net proceedsresults that may be used to make short-term investments.
The Trust Preferred Securities will be eligible to qualify as Tier 1
Capital under the capital guidelines of the Federal Reserve, provided that under
current Federal Reserve guidelines no more than 25% of the Corporation's Tier 1
Capital may comprise Trust Preferred Securities and other capital securities and
cumulative preferred stock of the Corporation.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of
the Corporation on a consolidated basisexpected for the respective periods indicated.full year ending
December 31, 2001.
Year Ended DecemberAT SEPTEMBER 30, AT DECEMBER 31,
-------------------------------------------------------------------------------------- --------------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996 1995 1994 1993 1992
---------- ---------- ----------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
Ratios
BALANCE SHEET DATA:
Total assets........................... $2,144,319 $1,870,713 $1,949,976 $1,590,056 $1,575,069 $1,370,007 $1,092,793
Total loans............................ 1,288,642 1,170,873 1,184,764 1,028,510 941,112 828,132 695,406
Securities held to maturity............ 121,647 203,286 195,416 229,043 284,944 308,112 290,894
Securities available for sale.......... 547,208 287,677 387,476 201,614 195,199 131,842 26,449
Total deposits......................... 1,568,127 1,485,352 1,489,222 1,081,806 1,043,317 988,148 918,572
FHLB borrowings........................ 284,919 116,224 191,224 256,224 313,724 206,724 78,000
Stockholders' equity................... 135,198 107,227 114,712 98,129 95,848 92,493 81,110
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, FOR THE YEAR ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
OPERATIONS DATA:
Interest income........................ $ 108,350 $ 92,243 $ 127,566 $ 112,006 $ 108,712 $ 93,820 $ 77,424
Interest expense....................... 42,790 40,205 55,419 50,178 49,569 41,578 32,354
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income.................... 65,560 52,038 72,147 61,828 59,143 52,242 45,070
Provision for possible loan losses..... 2,787 1,618 2,268 3,927 3,960 2,260 1,750
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income after provision for
loan losses.......................... 62,773 50,420 69,879 57,901 55,183 49,982 43,320
Non-interest income.................... 15,826(1) 12,064 16,418 14,793 13,125 11,742 11,381
Non-interest expenses.................. 51,349 43,786 59,374 45,450 41,697 38,595 36,951
Minority interest expense.............. 4,157 3,929 5,319 2,668 2,668 1,645 --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income taxes............. 23,093 14,769 21,604 24,576 23,943 21,484 17,750
Income taxes........................... 7,330 4,412 6,414 7,545 7,804 7,326 6,153
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income............................. $ 15,763 $ 10,357 $ 15,190 $ 17,031 $ 16,139 $ 14,158 $ 11,597
========== ========== ========== ========== ========== ========== ==========
PER SHARE DATA:
Net income:
Basic................................ $1.10 $0.73 $1.07 $1.20 $1.10 $0.97 $0.80
Diluted.............................. 1.09 0.72 1.06 1.19 1.08 0.95 0.79
Cash dividends......................... 0.33 0.30 0.40 0.40 0.40 0.34 0.25
Book value, end of Earningsperiod.............. 9.45 7.52 8.05 6.92 6.63 6.25 5.55
8
AT OR FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, AT OR FOR THE YEAR ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
SELECTED FINANCIAL RATIOS(2):
Return on average assets............... 1.04% 0.83% 0.88% 1.09% 1.12% 1.15% 1.13%
Return on average equity............... 17.11 13.47 14.58 17.57 16.71 16.45 15.20
Net interest margin.................... 4.77 4.56 4.59 4.30 4.36 4.52 4.72
Operating expenses as a percent of
average assets....................... 3.37 3.50 3.43 2.90 2.88 3.14 3.60
Nonperforming loans as a percent of
gross loans.......................... 0.25 0.39 0.37 0.35 0.56 0.69 0.63
Nonperforming assets as a percent of
total assets at end of period........ 0.15 0.24 0.23 0.23 0.34 0.43 0.43
Reserve for possible loan losses as a
percent of loans..................... 1.31 1.32 1.31 1.45 1.46 1.53 1.76
Reserve for possible loan losses as a
percent of nonperforming loans at end
of period............................ 534.80 340.62 351.00 409.36 255.69 215.14 273.89
Dividend payout ratio.................. 33.11 36.66 37.53 33.50 37.03 35.78 31.64
Capital ratios at end of period:
Tier 1 leverage...................... 6.15 6.07 5.86 8.15 7.91 8.64 7.35
Tier 1 risk-based.................... 8.98 8.24 8.50 11.14 11.38 13.52 10.89
Total risk-based..................... 11.07 10.82 10.97 12.39 12.63 14.78 12.15
Ratio of earnings to Fixed Charges:fixed charges(3):
Including interest on deposits................deposits....... 1.53x 1.36x 1.39x 1.48x 1.48x 1.51x 1.54x 1.51x 1.43x 1.22x 1.01x
Excluding interest on deposits................deposits....... 2.83x 2.01x 2.19x 2.23x 2.27x 3.02x 4.26x 5.00x 5.66x 4.54x 1.25x
- ------------------------------
(1) Independent reported net securities gains as a separate line item in its
Form 10-Q for the quarter and period ended September 30, 2001.
(2) With the exception of end-of-period ratios, all ratios are based on average
daily balances during the indicated period.
(3) For purposes of computing the ratios of earnings to fixed charges, earnings
represent net income (loss) before extraordinary items and cumulative effect of changes
in accounting principles plus applicable income taxes and fixed charges.
Fixed charges includeincludes gross interest expense (exclusive of interest on
deposits in one case and inclusive of such interest in the other) and
one-third of rent expenses which approximates the interest expense of such
charges.
219
RISK FACTORS
INVESTING IN THE PREFERRED SECURITIES INVOLVES A NUMBER OF RISKS.
INDEPENDENT URGES YOU TO READ ALL OF THE INFORMATION CONTAINED IN THIS
PROSPECTUS. IN ADDITION, INDEPENDENT URGES YOU TO CONSIDER CAREFULLY THE
FOLLOWING FACTORS IN EVALUATING AN INVESTMENT IN THE TRUST BEFORE YOU PURCHASE
THE PREFERRED SECURITIES.
BECAUSE THE TRUST WILL RELY ON THE PAYMENTS IT RECEIVES ON THE DEBENTURES TO
FUND ALL PAYMENTS ON THE PREFERRED SECURITIES, AND BECAUSE THE TRUST MAY
DISTRIBUTE THE DEBENTURES IN EXCHANGE FOR THE PREFERRED SECURITIES, PURCHASERS
OF THE PREFERRED SECURITIES ARE MAKING AN INVESTMENT DECISION THAT RELATES TO
THE DEBENTURES BEING ISSUED BY INDEPENDENT AS WELL AS THE PREFERRED SECURITIES.
PURCHASERS SHOULD CAREFULLY REVIEW THE INFORMATION IN THIS PROSPECTUS ABOUT THE
PREFERRED SECURITIES, THE DEBENTURES AND THE GUARANTEE.
RELATED TO AN INVESTMENT IN THE PREFERRED SECURITIES
THE TRUST'S ABILITY TO MAKE INTEREST PAYMENTS TO YOU ON THE PREFERRED
SECURITIES IS DEPENDENT UPON INDEPENDENT'S ABILITY TO MAKE PAYMENTS TO THE TRUST
ON THE DEBENTURES.
The trust will depend solely on Independent's payments on the debentures to
pay amounts due to you on the preferred securities. If Independent defaults on
its obligation to pay the principal or interest on the debentures, the trust
will not have sufficient funds to pay distributions or the liquidation amount on
the preferred securities. In that case, you will not be able to rely on the
guarantee for payment of these amounts because the guarantee only applies if the
trust has sufficient funds to make distributions on or to pay the liquidation
amount of the preferred securities. Instead, you or the property trustee will
have to institute a direct action against Independent to enforce the property
trustee's rights under the indenture relating to the debentures.
INDEPENDENT'S ABILITY TO MAKE INTEREST PAYMENTS ON THE DEBENTURES TO THE
TRUST MAY BE RESTRICTED.
Independent is a holding company and substantially all of its assets are
held by its subsidiaries, primarily Rockland Trust. Independent's ability to
make payments on the debentures when due will depend primarily on its available
cash resources and dividends from its subsidiaries. Dividend payments or
extensions of credit from Rockland Trust are subject to regulatory limitations,
generally based on capital levels and current and retained earnings, imposed by
the various regulatory agencies with authority over Rockland Trust. The ability
of Rockland Trust to pay dividends is also subject to its profitability,
financial condition, capital expenditures and other cash flow requirements. As
of September 30, 2001, Independent could receive $10.2 million in dividend
payments from Rockland Trust without the need for prior regulatory approval and
still be considered well capitalized. Independent cannot assure you that its
subsidiaries will be able to pay dividends in the future.
Independent could also be precluded from making interest payments on the
debentures by its regulators if in the future they were to perceive deficiencies
in its liquidity or regulatory capital levels. If this were to occur,
Independent may be required to obtain the consent of its regulators prior to
paying dividends on its common stock or interest on the debentures. If consent
became required and its regulators were to withhold their consent, Independent
would likely exercise its right to defer interest payments on the debentures,
and the trust would not have funds available to make distributions on the
preferred securities during such period. As of September 30, 2001, Independent's
Tier 1 leverage capital was $38.6 million in excess of its minimum regulatory
requirements.
IN THE EVENT OF INDEPENDENT'S LIQUIDATION OR REORGANIZATION, YOU WILL NEED
TO LOOK TO INDEPENDENT'S ASSETS FOR PAYMENTS ON THE PREFERRED SECURITIES AND
DEBENTURES.
Independent's obligations under the debentures and the guarantee are
unsecured and will rank junior in priority of payment to its future senior and
subordinated indebtedness. As of September 30, 2001, Independent had no senior
and subordinated indebtedness outstanding. Independent's obligations under the
debentures will rank equal to other debentures issued by it to similar trusts,
including the
10
debentures previously sold to the trusts it established in 1997 and 2000. Except
in certain circumstances, Independent's ability to incur additional indebtedness
is not limited.
Because Independent is a bank holding company, the creditors of its
subsidiaries, including depositors, also will have priority over you in any
distribution of its subsidiaries' assets in liquidation, reorganization or
otherwise. Accordingly, the debentures and the guarantee will be effectively
subordinated to all existing and future liabilities of Independent's
subsidiaries, and you should look only to Independent's assets for payments on
the preferred securities and the debentures.
THE TRUST CAN DEFER INTEREST PAYMENTS ON THE PREFERRED SECURITIES FOR UP TO
FIVE YEARS.
Independent may, at one or more times, defer interest payments on the
debentures for up to 20 consecutive quarters. If Independent defers interest
payments on the debentures, the trust will defer distributions on the preferred
securities during any deferral period. During a deferral period, you will be
required to recognize as income for federal income tax purposes the amount
approximately equal to the interest that accrues on your proportionate share of
the debentures held by the trust in the tax year in which that interest accrues,
even though you will not receive these amounts until a later date.
You will also not receive the cash related to any accrued and unpaid
interest from the trust if you sell the preferred securities before the end of
any deferral period. During a deferral period, accrued but unpaid distributions
will increase your tax basis in the preferred securities. If you sell the
preferred securities during a deferral period, your increased tax basis will
decrease the amount of any capital gain or increase the amount of any capital
loss that you may have otherwise realized on the sale.
If Independent exercises its right to defer interest payments on the
debentures, the market price of the preferred securities would likely be
adversely affected. The preferred securities may trade at a price that does not
fully reflect the value of accrued but unpaid interest on the debentures. If you
sell the preferred securities during a deferral period, you may not receive the
same return on investment as someone who continues to hold the preferred
securities. Due to Independent's right to defer interest payments, the market
price of the preferred securities may be more volatile than the market prices of
other securities without the deferral feature.
NEITHER THE INDENTURE NOR THE TRUST AGREEMENT PROVIDE INVESTORS WITH
PROTECTIONS BY RESTRICTING HOW INDEPENDENT OR ROCKLAND TRUST MAY CONDUCT
BUSINESS IN THE FUTURE.
The indenture governing the debentures and the trust agreement governing the
trust do not require Independent to maintain any financial ratios or specified
levels of net worth, revenues, income, cash flow or liquidity, and therefore do
not protect holders of the debentures or the preferred securities in the event
Independent experiences significant adverse changes in its financial condition
or results of operations. Neither the indenture nor the trust agreement limits
Independent's ability or the ability of any of its subsidiaries to incur other
additional indebtedness that is senior in right of payment to the debentures.
Therefore, you should not consider the provisions of these governing instruments
as a significant factor in evaluating whether Independent will be able to comply
with its obligations under the debentures or the guarantee.
INDEPENDENT MAY TAKE ACTIONS WHICH COULD RESULT IN AN EARLY REDEMPTION OF
THE PREFERRED SECURITIES.
Under the following circumstances, Independent may redeem the debentures
before their stated maturity:
- In whole or in part, at any time on or after , 2006;
- In whole, but not in part, within 180 days after certain specified
occurrences at any time during the life of the trust. These occurrences
may include adverse tax, investment company or bank regulatory
developments; or
11
- At any time, and from time to time, to the extent of any preferred
securities it purchases, plus a proportionate amount of the common
securities it holds.
If the debentures are redeemed, the trust must redeem preferred securities
having an aggregate liquidation amount equal to the aggregate principal amount
of debentures redeemed, and you may be required to reinvest your principal at a
time when you may not be able to earn a return that is as high as you were
earning on the preferred securities.
INDEPENDENT CAN DISTRIBUTE THE DEBENTURES TO YOU, WHICH MAY HAVE ADVERSE TAX
CONSEQUENCES FOR YOU AND WHICH MAY ADVERSELY AFFECT THE MARKET PRICE OF THE
PREFERRED SECURITIES.
The trust may be dissolved at any time before maturity of the debentures on
, 2031. As a result, and subject to the terms of the trust
agreement, the trustees may distribute the debentures to you. If this occurs,
Independent will use its best efforts to list the debentures on the Nasdaq
National Market or other national securities exchange or national quotation
system. However, Independent cannot predict the market prices for the debentures
that may be distributed in exchange for preferred securities upon liquidation of
the trust. The preferred securities, or the debentures that you may receive if
the trust is liquidated, may trade at a discount to the price that you paid to
purchase the preferred securities. Because you may receive debentures, your
investment decision with regard to the preferred securities will also be an
investment decision with regard to the debentures. You should carefully review
all of the information contained in this prospectus regarding the debentures.
Under current interpretations of United States federal income tax laws
supporting classification of the trust as a grantor trust for tax purposes, a
distribution of the debentures to you upon the dissolution of the trust would
not be a taxable event to you. Nevertheless, if the trust is classified for
United States federal income tax purposes as an association taxable as a
corporation at the time it is dissolved, the distribution of the debentures
would be a taxable event to you. In addition, if there is a change in law, a
distribution of debentures upon the dissolution of the trust could be a taxable
event to you.
THERE IS NO CURRENT PUBLIC MARKET FOR THE PREFERRED SECURITIES AND THEIR
MARKET PRICE MAY BE SUBJECT TO SIGNIFICANT FLUCTUATIONS.
There is currently no public market for the preferred securities.
Independent has applied for and received approval to have the preferred
securities quoted on the Nasdaq National Market. However, Independent cannot
assure you that an active or liquid trading market will develop for the
preferred securities. If an active trading market does not develop, the market
price and liquidity of the preferred securities will be adversely affected. Even
if an active public market does develop, there is no guarantee that the market
price for the preferred securities will equal or exceed the price you pay for
the preferred securities. Future trading prices of the preferred securities may
be subject to significant fluctuations in response to prevailing interest rates,
Independent's future operating results and financial condition, the market for
similar securities and general economic and market conditions. Independent's
9.28% cumulative trust preferred securities issued in May 1997 are quoted on the
Nasdaq National Market under the symbol "INDBP" and Independent's 11.00%
cumulative trust preferred securities issued in January 2000 are quoted on the
Nasdaq National Market under the symbol "INDBO."
YOU MUST RELY ON THE PROPERTY TRUSTEE TO ENFORCE YOUR RIGHTS IF THERE IS AN
EVENT OF DEFAULT UNDER THE INDENTURE.
You may not be able to directly enforce your rights against Independent if
an event of default under the indenture occurs. If an event of default under the
indenture occurs and is continuing, this event will also be an event of default
under the trust agreement. In that case, you must rely on the enforcement by the
property trustee of its rights as holder of the debentures against Independent.
The holders of a majority in liquidation amount of the preferred securities will
have the right to direct the property trustee to enforce its rights. If the
property trustee does not enforce its rights following an event of default and a
request by the record holders of a majority in liquidation amount of the
12
preferred securities to do so, any record holder may, to the extent permitted by
applicable law, take action directly against Independent to enforce the property
trustee's rights. If an event of default occurs under the trust agreement that
is attributable to Independent's failure to pay interest or principal on the
debentures, or if Independent defaults under the guarantee, you may proceed
directly against Independent. You will not be able to exercise directly any
other remedies available to the holders of the debentures unless the property
trustee fails to do so.
AS A HOLDER OF PREFERRED SECURITIES, YOU HAVE LIMITED VOTING RIGHTS.
Holders of preferred securities have limited voting rights. Your voting
rights pertain primarily to amendments to the trust agreement. In general, only
Independent, as holder of the trust common securities, can replace or remove any
of the trustees. However, if an event of default under the trust agreement
occurs and is continuing, the holders of at least a majority in aggregate
liquidation amount of the preferred securities may replace the property trustee
and the Delaware trustee.
RISKS RELATING TO AN INVESTMENT IN INDEPENDENT
INDEPENDENT'S LEVEL OF CREDIT RISK IS INCREASING DUE TO THE EXPANSION OF ITS
COMMERCIAL LENDING AND ITS CONCENTRATION ON SMALL BUSINESSES AND MIDDLE MARKET
CUSTOMERS WITH HEIGHTENED VULNERABILITY TO ECONOMIC CONDITIONS.
Independent's commercial real estate loans and commercial business loans
have increased significantly from $260.6 million and $119.7 million,
respectively, at December 31, 1998, to $444.9 million and $150.0 million,
respectively, at September 30, 2001. Independent's level of credit risk has
increased as a result of the growth in its loan portfolio. Commercial real
estate loans generally are considered riskier than single-family residential
loans because they have larger balances to a single borrower or group of related
borrowers. Commercial business loans involve risks because the borrower's
ability to repay the loan typically depends primarily on the successful
operation of the business or the property securing the loan. Most of its
commercial business loans are made to small businesses and middle market
customers who may have a heightened vulnerability to economic conditions.
CHANGES IN INTEREST RATES COULD ADVERSELY IMPACT INDEPENDENT'S FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Independent's ability to make a profit, like that of most financial
institutions, substantially depends upon its net interest income, which is the
difference between the interest income earned on interest-earning assets, such
as loans and investment securities, and the interest expense paid on interest-
bearing liabilities, such as deposits and borrowings. Certain assets and
liabilities, however, may react in different degrees to changes in market
interest rates. Further, interest rates on some types of assets and liabilities
may fluctuate prior to changes in broader market interest rates, while rates on
other types of assets may lag behind. Additionally, some assets, such as
adjustable-rate mortgages, have features, including payment and rate caps, which
restrict changes in their interest rates.
Factors such as inflation, recession, unemployment, money supply, global
disorder such as that experienced as a result of the terrorist activity on
September 11, 2001, instability in domestic and foreign financial markets, and
other factors beyond Independent's control, may affect interest rates. Changes
in market interest rates will also affect the level of voluntary prepayments on
loans and the receipt of payments on mortgage-backed securities, resulting in
the receipt of proceeds that may have to be reinvested at a lower rate than the
loan or mortgage-backed security being prepaid. Although Independent pursues an
asset-liability management strategy designed to control its risk from changes in
market interest rates, changes in interest rates can still have a material
adverse effect on Independent's profitability.
13
IF INDEPENDENT HAS HIGHER LOAN LOSSES THAN IT ALLOWED FOR, ITS EARNINGS
COULD DECREASE AND IT MAY NOT BE ABLE TO MAKE PAYMENTS ON THE DEBENTURES.
Independent's loan customers may not repay their loans according to the
terms of these loans, and the collateral securing the payment of these loans may
be insufficient to assure repayment. Independent may experience significant
credit losses which could have a material adverse effect on its operating
results. Independent makes various assumptions and judgments about the
collectibility of its loan portfolio, including the creditworthiness of its
borrowers and the value of the real estate and other assets serving as
collateral for the repayment of many of its loans. In determining the size of
the allowance for loan losses, Independent relies on its experience and its
evaluation of economic conditions. If its assumptions prove to be incorrect, its
current allowance for loan losses may not be sufficient to cover losses inherent
in its loan portfolio and adjustments may be necessary to allow for different
economic conditions or adverse developments in its loan portfolio. Consequently,
a problem with one or more loans could require Independent to significantly
increase the level of its provision for loan losses. In addition, federal and
state regulators periodically review Independent's allowance for loan losses and
may require it to increase its provision for loan losses or recognize further
loan charge-offs. Material additions to the allowance would materially decrease
Independent's net income and, if it experiences defaults in its loan portfolio
to a greater extent than anticipated, Independent may not be able to pay
interest on the debentures and, as a result, the trust would not be able to make
distributions on the preferred securities.
A SIGNIFICANT AMOUNT OF INDEPENDENT'S LOANS ARE CONCENTRATED IN
MASSACHUSETTS, AND ADVERSE CONDITIONS IN THESE AREAS COULD NEGATIVELY IMPACT ITS
OPERATIONS.
Substantially all of the loans Independent originates are secured by
properties located in or are made to businesses which operate in Massachusetts.
Because of the current concentration of Independent's loan origination
activities in Massachusetts, in the event of adverse economic, political or
business developments or natural hazards that may affect Massachusetts and the
ability of property owners and businesses in Massachusetts to make payments of
principal and interest on the underlying loans, Independent would likely
experience higher rates of loss and delinquency on its loans than if its loans
were made more geographically diversified, which could have an adverse effect on
its results of operations or financial condition.
14
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Independent makes certain forward-looking statements in this prospectus and
in the information incorporated by reference herein that are based upon its
current expectations and projections about current events. Independent intends
these forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and Independent is including this statement for purposes of these
safe harbor provisions. You can identify these statements from Independent's use
of the words "estimate," "project," "believe," "intend," "anticipate," "expect"
and similar expressions. These forward-looking statements include:
- statements of Independent's goals, intentions and expectations;
- statements regarding Independent's business plans and growth strategies;
- statements regarding the asset quality of Independent's loan and
investment portfolios; and
- estimates of Independent's risks and future costs and benefits.
These forward-looking statements are subject to significant risks,
assumptions and uncertainties, including, among other things, the following
important factors which could affect the actual outcome of future events:
- fluctuations in market rates of interest and loan and deposit pricing,
which could negatively affect Independent's net interest margin, asset
valuations and expense expectations;
- adverse changes in the Massachusetts economy, which might affect
Independent's business prospects and could cause credit-related losses and
expenses;
- adverse developments in Independent's loan and investment portfolios;
- competitive factors in the banking industry, such as the trend towards
consolidation in Independent's market; and
- changes in banking legislation or the regulatory requirements of federal
and state agencies applicable to bank holding companies and banks like
Rockland Trust.
Because of these and other uncertainties, Independent's actual future
results may be materially different from the results indicated by these
forward-looking statements. In addition, Independent's past results of
operations do not necessarily indicate its future results.
USE OF PROCEEDS
The trust will invest all of the proceeds from the sale of the preferred
securities in the debentures. Independent anticipates that the net proceeds from
the sale of the debentures will be approximately $23.9 million after deduction
of offering expenses estimated to be $275,000 and underwriting commissions.
Currently, Independent expects to use the estimated net proceeds from the
sale of the debentures to redeem in full on or after January 31, 2002, the
11.00% junior subordinated debentures sold by Independent to the trust it
established in January 2000. In connection with such redemption, that trust
would redeem its outstanding preferred securities. If an unexpected acquisition
opportunity were to arise after the sale of the preferred securities offered by
this prospectus, Independent might decide not to redeem such debentures. Under
such circumstances, Independent would use the proceeds for general corporate
purposes. Initially, the net proceeds may be used to make short-term marketable
investment grade investments. Independent is not presently engaged in any
acquisition discussions.
15
CAPITALIZATION
The following table sets forth theIndependent's unaudited consolidated
capitalization as of September 30, 2001 on a historical basis and as adjusted
for the offering and the application of the Corporation as of December 31, 1996, and such capitalization as adjusted, to
give effect toestimated net proceeds from the
consummationcorresponding sale of the offering of the Trust Preferred
Securities offered hereby. The followingdebentures as if such sale had been consummated on
September 30, 2001. This data should be read in conjunctionconnection with Independent's
consolidated financial statements and the related notes incorporated by
reference into this prospectus from Independent's Annual Report on Form 10-K for
the year ended December 31, 2000 and Independent's Quarterly Report on
Form 10-Q for the quarters ended March 31, 2001, June 30, 2001 and
September 30, 2001.
SEPTEMBER 30, 2001
--------------------------------------
AS ADJUSTED
FOR
ACTUAL AS ADJUSTED REDEMPTION
---------- ----------- -----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
MINORITY INTEREST IN SUBSIDIARIES:
Corporation-obligated mandatorily redeemable 9.28% trust
preferred securities of Trust I due May 19, 2027 (1)... $ 28,750 $ 28,750 $ 28,750
Corporation-obligated mandatorily redeemable 11.00% trust
preferred securities of Trust II due January 31, 2030
(1).................................................... 25,000 25,000 --
Corporation-obligated mandatorily redeemable % trust
preferred securities of Trust III (2).................. -- 25,000 25,000
---------- ---------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value, 1,000,000 shares
authorized; none issued.............................. -- -- --
Common stock, par value $0.01; 30,000,000 shares
authorized; 14,863,821 shares issued and 14,311,009
shares outstanding................................... 149 149 149
Surplus................................................ 43,595 43,595 42,875 (3)
Retained earnings...................................... 88,076 88,076 88,076
Treasury stock, 552,812 shares......................... (8,627) (8,627) (8,627)
Accumulated other comprehensive income, net of tax..... 12,005 12,005 12,005
---------- ---------- ----------
Total stockholders' equity........................... $ 135,198 $ 135,198 $ 134,478
========== ========== ==========
Total liabilities, minority interest in subsidiaries
and stockholders' equity........................... $2,144,319 $2,169,319 $2,143,599
========== ========== ==========
CAPITAL RATIOS (4)
Tier 1 leverage........................................ 6.15% 6.08% 6.10%
Tier 1 risk-based...................................... 8.98% 8.98% 8.91%
Total risk-based....................................... 11.07% 12.83% 11.01%
- ------------------------
(1) Information in Independent's consolidated financial informationstatements is presented
net of issuance costs.
(2) Reflects the preferred securities at their issue price. As described herein,
the only assets of the trust, which is Independent's subsidiary, will be
approximately $25.8 million in aggregate principal amount of debentures,
including the amount attributable to the issuance of the common securities
of the trust, which will mature on , 2031. Independent will own
all of the common securities issued by the trust.
16
(3) Reflects the impact of the Company recording a charge to paid-in-capital
(net of tax) for the early redemption of the securities issued by the trust
established by Independent in 2000 in the amount of $720,000.
(4) The preferred securities have been structured to qualify as Tier 1 capital.
However, in calculating the amount of Tier 1 qualifying capital, the
preferred securities, together with any other of Independent's trust
preferred securities or cumulative preferred stock that may be outstanding
in the future, can only be included up to an amount constituting 25% of
total Tier 1 core capital elements (including the preferred securities).
None of the proceeds from the sale of the perferred securities will be
initially included in documents incorporated herein by reference
orTier 1 capital. As adjusted for this offering and the
subsequent redemption of the preferred securities from Trust II, an
aggregate of $12.1 million of the proceeds will be eligible for inclusion in
the calculation of Tier 1 capital.
ACCOUNTING AND REGULATORY TREATMENT
The trust will be treated, for financial reporting purposes, as a subsidiary
and, accordingly, the accounts of the trust will be included herein. See "Incorporationin Independent's
consolidated financial statements. The preferred securities will be presented as
a separate line item in Independent's consolidated statement of Certain Documents by Reference."
December 31, 1996
-----------------
Actual As Adjusted
------ -----------
(Dollars in Thousands)
Deposits ............................................. $ 918,572 $ 918,572
Advances from Federal Home Loan Bank ................. 78,000 78,000
Federal funds purchased and assets soldfinancial
condition under agreements to repurchase ............................ 840 840
Treasury tax and loan notes .......................... 2,296 2,296
Other liabilities .................................... 11,975 11,975
---------- ----------
Total liabilities .................................... $1,011,683 $1,011,683
---------- ----------
Corporation-obligatedthe caption "Corporation-obligated mandatorily redeemable trust
preferred securities of subsidiary trust, holding solely junior subordinated
debentures of the Corporation(1) ..................................... -- 25,000
---------- ----------
Stockholders' equity:
Preferred stock, par value $.01 per share, 1,000,000
shares authorized, none issued ................... -- --
Common stock, par value $0.01 per share, 30,000,000
shares authorized, 14,604,501 shares issued ...... 146 146
Surplus ............................................ 44,433 44,433
Retained earnings .................................. 36,666 36,666
Unrealized lossCorporation" or other similar caption. In addition,
appropriate disclosures about the preferred securities, the guarantee and the
debentures will be included in the Notes to Independent's Consolidated Financial
Statements. For financial reporting purposes, Independent will record
distributions payable on the preferred securities available for sale,
netin its Consolidated Statements
of tax ........................................ (135) (135)
---------- ----------
Total stockholders' equity ........................... 81,110 81,110
---------- ----------
Total liabilities,Operations as minority interest in subsidiaries
and stockholders' equity ............................ $1,092,793 $1,117,793
========== ==========expense.
Independent's future reports filed under the Securities Exchange Act of 1934
will include a footnote to the audited Consolidated Financial Statements stating
that:
- -----------
(1) Reflects the Trust Preferred Securities at their issue price. As described
herein,trust is wholly owned;
- the sole assets of the Trust, which istrust are the debentures, specifying the
debentures' outstanding principal amount, interest rate and maturity date;
and
- Independent's obligations described in this prospectus, in the aggregate,
constitute a subsidiaryfull, irrevocable and unconditional guarantee on a
subordinated basis by it of the Corporation,
will be $25,774,000 aggregate principal amountobligations of the Junior Subordinated
Debentures (includingtrust under the
amounts attributable to the issuancepreferred securities.
Under accounting rules of the Common
Securities and Exchange Commission,
Independent is not required to include separate financial statements of the
Trust), which will mature on _______, 2027. The Corporationtrust in this prospectus because it will own all of the Common Securities issued bytrust's voting
securities, the Trust.
22
ACCOUNTING TREATMENT
For financial reporting purposes,trust has no independent operations and Independent guarantees
the Trust will be treated as a subsidiary
ofpayments on the Corporation and, accordingly, the accounts of the Trust will be included
in the consolidated financial statements of the Corporation. The Trust Preferred
Securities will be presented as a separate line item in the consolidated balance
sheets of the Corporation, entitled "Corporation-Obligated Mandatorily
Redeemable Trust Preferred Securities of Subsidiary Trust Holding Solely Junior
Subordinated Debentures of the Corporation" and appropriate disclosures about
the Trust Preferred Securities, the Guarantee and the Junior Subordinated
Debentures will be included in the notespreferred securities to the consolidated financial
statements of the Corporation. For financial reporting purposes, the Corporation
will record Distributions payable on the Trust Preferred Securities as a
minority interest expenseextent described in its consolidated statements of income.
23this
prospectus.
17
RECENT DEVELOPMENTS
(Dollars in Thousands, Except Per Share Data)DESCRIPTION OF THE TRUST
The summary consolidated financial data as of and for the three month
periods ended March 31, 1997 and 1996 have been derived from the unaudited
consolidated financial statements of the Corporation which have been prepared by
management on the same basis as the audited consolidated financial statements of
the Corporation incorporated by reference herein and, in the opinion of
management of the Corporation, reflect all adjustments, consisting of only
normal recurring adjustments, necessary for a fair presentation of such data as
of such dates.
March 31, December 31,
Balance Sheet Data: 1997 1996
---- ----
Total assets......................................... $1,118,767 $1,092,793
Loans, net of unearned discount...................... 715,714 695,406
Securities held to maturity.......................... 301,182 290,894
Securities available for sale........................ 31,463 26,449
Total deposits....................................... 909,370 918,572
Stockholders' equity................................. 82,908 81,110
Nonperforming loans.................................. 4,287 4,462
Nonperforming assets................................. 4,833 4,733
Reserve for possible loan losses..................... 12,142 12,221
Three Months Ended March 31,
----------------------------
Operations Data: 1997 1996
---- ----
Interest income...................................... $20,626 $18,564
Interest expense..................................... 8,799 7,699
------- -------
Net interest income.................................. 11,827 10,865
Provision for possible loan losses................... 500 250
------- -------
Net interest income after provision for loan losses.. 11,327 10,615
Non-interest income.................................. 3,157 3,143
Non-interest expense................................. 9,788 9,687
------- -------
Income before income taxes........................... 4,696 4,071
Income taxes......................................... 1,699 1,494
------- -------
Net income........................................... $ 2,997 $ 2,577
======= =======
Per Share Data:
Net income........................................... $.20 $.18
Cash dividends....................................... .08 .06
Book value, end of period............................ 5.67 5.10
(Continued on next page)
24
At or For the
Three Months Ended
March 31,
--------------------
Selected Financial Ratios(1): 1997 1996
---- ----
Return on average assets.................................. 1.09% 1.06%
Return on average equity.................................. 14.55 14.05
Net interest margin....................................... 4.60 4.79
Operating expenses as a percent of average
assets(2) ................. ............................ 3.61 4.00
Nonperforming assets as a percent of total assets
at end of period........................................ .43 .67
Reserve for possible loan losses as a percent of
nonperforming loans at end of period................... 283.23 193.29
Dividend payout ratio..................................... 39.00 33.80
Capital ratios at end of period:
Tier 1 leverage capital ratio....................... 7.33 7.35
Tier 1 risk-based capital ratio..................... 11.09 10.63
Total risk-based capital ratio...................... 12.35 11.89
- ----------
(1) With the exception of end-of-period ratios, all ratios are based on average
daily balances during the indicated periods.
(2) Annualized
The Corporation earned $3.0 million or $.20 per share during the three
months ended March 31, 1997, compared to $2.6 million or $.18 per share for the
comparable quarter in 1996. The $420,000 or 16.3% increase was primarily due to
a $962,000 or 8.9% increase in net interest income. The increase in interest net
income was due to a $68.0 million or 10.7% increase in the average balance of
the loan portfolio, net of unearned discount, resulting from increases in both
the residential and commercial real estate portfolios and indirect automobile
lending, as well as a $56.5 million or 21.0% increase in the investment
securities portfolio, which reflects the Corporation's strategy of leveraging
its capital. The average balance of borrowings increased by $50.7 million or
93.0%, while the average balance of deposits increased by $64.1 million or 7.7%.
The provision for loan losses increased by $250,000 or 50%, as management
determined that an increase was appropriate due to the increase in the size of
the loan portfolio.
The Corporation's non-interest income was essentially unchanged during the
three months ended March 31, 1997 over the comparable period. During the current
quarter, income from trust services increased by $100,000 or 17%. This increase
was offset by a non-recurring recovery of $95,000 during the March 1996 quarter
associated with a former real estate owned property.
25
The Corporation's non-interest expense increased by $101,000 or 1.0% during
the quarter ended March 31, 1997 over the comparable period. As previously
reported, in connection with a change in the Bank's pension plan which was
effective January 1, 1997, the Corporation recognized $394,000 of previously
accrued pension liability as a credit against non-interest expense during the
March 31, 1997 quarter. Without giving effect to the aforementioned credit,
non-interest expense increased by $495,000 or 5.0%.
26
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, Except Per Share Data)
The selected consolidated financial data below should be read in connection
with the financial information included in the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1996. See "Available Information" and
"Incorporation of Certain Documents by Reference."
At December 31,
--------------------------------------------------
Balance Sheet Data: 1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Total assets ..................... $1,092,793 $987,589 $929,194 $829,681 $807,146
Loans, net of unearned discount... 695,406 628,141 590,689 487,584 499,052
Securities held to maturity ...... 290,894 226,896 256,785 266,544 194,635
Securities available for sale .... 26,449 32,628 4,250 -- --
Total deposits ................... 918,572 871,085 796,612 743,385 729,020
Stockholders' equity ............. 81,110 72,572 64,202 57,385 52,746
Nonperforming loans .............. 4,462 5,271 7,864 16,982 28,802
Nonperforming assets ............. 4,733 5,909 11,730 25,866 44,714
Reserve for possible loan losses.. 12,221 12,088 13,719 15,485 15,971
Year Ended December 31,
-------------------------------------------
Operations Data: 1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Interest income ....................... $77,211 $73,031 $63,487 $57,450 $63,055
Interest expense ...................... 32,354 29,143 22,029 22,920 29,127
------- ------- ------- ------- -------
Net interest income ................... 44,857 43,888 41,458 34,530 33,928
Provision for possible loan
losses ............................... 1,750 1,000 801 5,075 11,014
------- ------- ------- ------- -------
Net interest income after provision for
loan losses ........................ 43,107 42,888 40,657 29,455 22,914
Non-interest income ................... 12,709 11,480 11,470 12,995 17,059
Non-interest expenses ................. 38,066 39,252 42,481 37,331 39,583
------- ------- ------- ------- -------
Income before income taxes ............ 17,750 15,116 9,646 5,119 390
Income taxes .......................... 6,153 4,729 1,533 483 215
------- ------- ------- ------- -------
Net income ............................ $11,597 $10,387 $ 8,113 $ 4,636 $ 175
======= ======= ======= ======= =======
Per Share Data:
Net income ............................ $0.79 $0.71 $0.56 $0.32 $0.03
Cash dividends ........................ 0.25 0.18 0.08 -- --
Book value, end of period ............. 5.55 5.00 4.45 3.98 3.66
(Continued on next page)
27
At or For the Year Ended December 31,
-------------------------------------------
Selected Financial Ratios(1): 1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Return on average assets .................... 1.13% 1.10% 0.94% 0.59% 0.02%
Return on average equity .................... 15.20 15.28 13.36 8.48 0.56
Net interest margin ......................... 4.70 4.99 5.18 4.74 4.74
Operating expenses as a percent of
average assets ............................. 3.7 4.1 4.9 4.7 4.9
Nonperforming assets as a percent of
total assets at end of period .............. 0.43 0.60 1.26 3.12 5.54
Reserve for possible loan losses as a percent
of nonperforming loans at end of period .... 273.89 229.33 174.45 91.18 55.45
Dividend payout ratio ....................... 31.6 25.4 14.3 N/A N/A
Capital ratios at end of period:
Tier 1 leverage capital ratio ......... 7.35 7.24 6.76 6.83 6.50
Tier 1 risk-based capital ratio ....... 10.89 10.67 10.05 10.71 9.67
Total risk-based capital ratio ........ 12.15 11.92 11.31 11.98 10.94
- ----------
(1) With the exception of end-of-period ratios, all ratios are based on average
daily balances during the indicated periods.
28
MANAGEMENT OF INDEPENDENT AND THE BANK
The executive officers and directors of the Corporation and the Bank are as
follows:
Name Position
- ------------------------ -----------------------------------------------------
John F. Spence, Jr. Chairman of the Board of Directors and Chief
Executive Officer of the Company; Chairman of the
Board of the Directors of the Bank
Douglas H. Philipsen President of the Company; President and Chief
Executive Officer of the Bank
Richard J. Seaman Chief Financial Officer and Treasurer of the Company
and the Bank
Richard F. Driscoll Executive Vice President, Retail and Operations
Division of the Bank
Ferdinand T. Kelley Executive Vice President, Commercial Lending Division
of the Bank
S. Lee Miller Executive Vice President, Trust and Financial
Services Division of the Bank
Raymond G. Fuerschbach Senior Vice President and Human Resource Officer of
the Bank
Richard S. Anderson Director
Donald S. Atkins Director
W. Paul Clark Director
Robert L. Cushing Director
Benjamin A. Gilmore, II Director
Lawrence M. Levinson Director
Richard H. Sgarzi Director
Robert J. Spence Director
William J. Spence Director
Brian S. Tedeschi Director
Thomas J. Teuten Director
29
John F. Spence, Jr. Mr. Spence is Chairman of the Board of Directors and
Chief Executive Officer of the Company and Chairman of the Bank. He served as
President of the Company from January to December 1991. Mr. Spence has been a
director of the Bank since 1951 and served in various executive positions with
the Bank beginning in 1965, including Chief Executive Officer, a position he
held from 1976 until 1991. He became Chairman of the Board of the Bank in 1972
and Chairman of the Board of Directors and Chief Executive Officer of the
Company in 1986.
Douglas H. Philipsen. Mr. Philipsen is President of the Company and
President and Chief Executive Officer of the Bank. Mr. Philipsen joined the Bank
in December 1991 as President, Chief Executive Officer and a director. At that
time, he also became President and a director of the Company. From October 1987
through November 1990, Mr. Philipsen served as President and Chief Executive
Officer of Bank of New England-Worcester, Worcester, Massachusetts, and its
predecessor financial institutions, Guaranty Bank & Trust and Consumers Savings
Bank.
Richard Seaman. Mr. Seaman has been the Chief Financial Officer and
Treasurer of the Company and the Bank since July 1992. From December 1990 to
July 1992, Mr. Seaman was a management consultant with RJS Associates and
Danielson Associates, Inc., Rockville, Maryland, providing consulting to the
financial services industry on, among other matters, troubled bank
rehabilitation.
Richard F. Driscoll. Mr. Driscoll has been Executive Vice President, Retail
and Operations Division of the Bank since March 1992. Prior thereto, Mr.
Driscoll served as Executive Vice President--Dealer Lending Division of Fleet
Bank--Massachusetts, N.A. from July 1991 to March 1992.
Ferdinand T. Kelley. Mr. Kelley has served as Executive Vice President,
Commercial Lending Division of the Bank, since February 1993. Prior thereto, Mr.
Kelley served as Senior Vice President and Credit Administrator of Multibank
Financial Corp., Dedham, Massachusetts, from August 1992 to January 1993. From
February 1990 to July 1991, Mr. Kelley was the Regional President of the
Worcester Region (Central Massachusetts) of Bank of New England, N.A., and
continued in that position with Fleet Bank of Massachusetts, N.A., from July
1991 to August 1992 following the Bank of New England's acquisition by Fleet
Bank.
S. Lee Miller. Mr. Miller has been Executive Vice President, Trust and
Financial Services Division of the Bank since July 1994. Prior thereto, Mr.
Miller was President and Chief Executive Officer of Old Stone Trust Company, a
subsidiary of Old Stone Bank in Providence, Rhode Island from 1971 through July
1994.
Raymond G. Fuerschbach. Mr. Fuerschbach has served as Senior Vice
President, Human Resources Division of the Bank, since April 1994. Prior
thereto, Mr. Fuerschbach had been Vice President and Human Resource Officer of
the Bank since November 1992. From January 1991
30
to October 1992, Mr. Fuerschbach served as Director of Human Resources for
Cliftex Corp., New Bedford, Massachusetts, a tailored clothing manufacturer.
Richard S. Anderson. Mr. Anderson is an owner and principal executive of
Anderson-Cushing Insurance Agency, Inc. (insurance broker, Middleboro,
Massachusetts). Mr. Anderson became a director of the Company and the Bank in
1992 and served as a director of Middleborough from 1980 until its merger with
the Bank.
Donald K. Atkins. Mr. Atkins served as President and Chief Executive
Officer of Winthrop-Atkins Co., Inc. (manufacturer of calendars, Middleboro,
Massachusetts) until his retirement in 1987. Mr. Atkins, a director of the
Company since 1986, became a director of the Bank in 1992 and served as a
director of Middleborough from 1963 until its merger with the Bank.
W. Paul Clark. Mr. Clark is the President and General Manager of Paul
Clark, Inc. (Ford and Volkswagen dealership, Brockton, Massachusetts). Mr. Clark
has served as a director of the Bank since 1970 and of the Company since 1986.
Robert L. Cushing. Mr. Cushing is owner of Robert L. Cushing Insurance
(insurance broker associated with Anderson-Cushing Insurance Agency, Inc.,
Middleboro, Massachusetts). Mr. Cushing was a director of Middleborough from
1957 until 1990 at which time he became an honorary director of Middleborough.
Mr. Cushing became a director of the Company in 1986 and an honorary director of
the Bank in 1992.
Benjamin A. Gilmore II. Mr. Gilmore is President of Gilmore Cranberry Co.
(cranberry grower, South Carver, Massachusetts). Mr. Gilmore became a director
of Middleborough in 1989 and a director of the Company and the Bank in 1992.
Lawrence M. Levinson. Mr. Levinson is a partner in the law firm of Burns &
Levinson, Boston, Massachusetts and has been a practicing attorney in Boston
since 1948. Mr. Levinson was a director of the Bank from 1960 until 1990, at
which time he became an honorary director of the Bank. Mr. Levinson has served
as a director of the Company since 1986. Mr. Levinson is also a director of
Arrow Automotive Industries, Inc. and Sonesta International Hotels Corporation.
Richard H. Sgarzi. Mr. Sgarzi is the Treasurer of Black Cat Cranberry Corp.
(cranberry grower, Plymouth, Massachusetts). Mr. Sgarzi has served as a director
of the Company since 1994 and of the Bank since 1980.
Robert J. Spence. Mr. Spence is President of Albert Culver Co. (retail fuel
company, Rockland, Massachusetts). Mr. Spence has served as a director of the
Bank since 1961 and of the Company since 1986.
31
William J. Spence. Mr. Spence is President of Mass. Bay Lines, Inc.
(excursion boat rentals, Boston, Massachusetts) and President of New Boston
Concessions, Inc. (food and beverage concessionaire, Boston, Massachusetts). Mr.
Spence became a director of the Bank in 1966 and a director of the Company in
1986.
Brian S. Tedeschi. Mr. Tedeschi is President of Tedeschi Realty Corp. (real
estate development, Rockland, Massachusetts). Mr. Tedeschi has served as a
director of the Bank since 1980 and of the Company since 1991.
Thomas J. Teuten. Mr. Teuten is Executive Vice President, A.W. Perry, Inc.
and A.W. Perry Security Corporation (real estate investment, Boston,
Massachusetts). Mr. Teuten has served as a director of the Bank since 1975 and
of the Company since 1986.
32
INDEPENDENT CAPITAL TRUST I
The Trust is a statutory business trust formed pursuant to the Delaware
Business Trust Act under Delaware law upona declaration of trust executed by Independent, as
sponsor for the filing oftrust, and the trustees. Independent has filed a certificate of
trust with the Delaware Secretary of State. The Trust
exists fordeclaration of trust will be
amended and restated in its entirely in the exclusive purposesform filed as an exhibit to the
registration statement of (i) issuingwhich this prospectus is a part, as of the date the
preferred securities are initially issued and sellingshall be referred to as the trust
agreement in this prospectus. The trust agreement will be qualified under the
Trust Securities, (ii) usingIndenture Act of 1939. Independent has formed the trust and is causing it
to issue the preferred securities because it believes that it is less expensive
than traditional preferred stock (the interest payments made on the debentures
issued to the trust are deductible for federal tax purposes) and is not dilutive
to its stockholders. Independent currently expects to use the estimated net
proceeds from the sale of Trust Securitiesthe debentures to acquireredeem in full on or after January
31, 2002 the Junior Subordinated Debentures and (iii) engaging in only those other
activities necessary, advisable or incidental thereto. The Junior Subordinated
Debentures will be the sole assets of the Trust, and, accordingly, payments
under the Junior Subordinated Debentures will be the sole revenues of the Trust.
All of the Common Securities will be owned11.00% junior subordinated debentures sold by the Corporation. The Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Trust Preferred Securities, except that upon the occurrence and
continuance of an event of default under the Trust Agreement resulting from a
Debenture Event of Default, the rights of the Corporation as holder of the
Common Securities to payments in respect of Distributions and payments upon
liquidation, redemption or otherwise will be subordinatedIndependent to the
rightstrust it established in January 2000. In connection with such redemption, that
trust would redeem its outstanding preferred securities. See "Use of theProceeds"
on page 15.
The holders of the Trust Preferred Securities. See "Descriptionpreferred securities issued pursuant to the offering
described in this prospectus will own all of Trust Preferred
Securities--Subordinationthe issued and outstanding
preferred securities of Common Securities." The Corporationthe trust which have certain prior rights over the other
securities of the trust. Independent will not initially own any of the preferred
securities. Independent will acquire Common Securitiescommon securities in a Liquidation Amountan amount equal to at
least 3% of the total capital of the Trust.trust and will initially own, directly or
indirectly, all of the issued and outstanding common securities. The common
securities, together with the preferred securities, are called the trust
securities.
The trust exists exclusively for the purposes of:
- issuing the preferred securities to the public for cash;
- issuing its common securities to Independent in exchange for its
capitalization of the trust;
- investing the proceeds from the sale of the trust securities in an
equivalent amount of debentures; and
- engaging in other activities that are incidental to those listed above,
such as receiving payments on the debentures and making distributions to
security holders, furnishing notices and other administrative tasks.
The rights of the holders of the trust securities are as set forth in the
trust agreement, the Delaware Business Trust Act and the Trust Indenture Act.
The trust agreement does not permit the trust to borrow money or make any
investment other than in the debentures. Other than with respect to the trust
securities, Independent has agreed to pay for all debts and obligations and all
costs and expenses of the trust, including the fees and expenses of the trustees
and any income taxes, duties and other governmental charges, and all costs and
expenses related to these charges, to which the trust may become subject, except
for federal withholding taxes that are properly withheld.
The number of trustees of the trust will initially be five. Three of the
trustees will be persons who are employees or officers of, or who are affiliated
with, Independent. They are the administrative trustees. The fourth trustee will
be an entity that maintains its principal place of business in the State of
Delaware. It is the Delaware trustee. Initially, The Bank of New York
(Delaware), will act as Delaware trustee. The fifth trustee, called the property
trustee, will also initially be The Bank of New York. The property trustee is
the institutional trustee under the trust agreement and acts as the indenture
trustee called for under the applicable provisions of the Trust Indenture Act.
Also for purposes of compliance with the Trust Indenture Act, The Bank of New
York will act as guarantee trustee and indenture trustee under the guarantee
agreement and the indenture. Independent, as holder of all of the common
securities, will have the right to appoint or remove any trustee unless an event
of default under the indenture has occurred and is continuing, in which case
only the holders of
18
the preferred securities may remove the Delaware trustee or the property
trustee. The trust has a term of 31approximately 30 years but may terminate
earlier as provided in the Trust Agreement.trust agreement.
The Trust's businessproperty trustee will hold the debentures for the benefit of the holders
of the trust securities and affairs are
conducted bywill have the Issuer Trustees, each appointed bypower to exercise all rights, powers
and privileges under the Corporationindenture as the holder of the Common Securities. The Issuer Trustees fordebentures. In addition,
the Trustproperty trustee will bemaintain exclusive control of a segregated
noninterest-bearing "payment account" established with The Bank of New York asto
hold all payments made on the Property Trustee, The Bankdebentures for the benefit of New York (Delaware), as the Delaware
Trustee and three Administrative Trustees who are officers of the Corporation.
The Bank of New York, as Property Trustee, will act as sole indenture trustee
under the Trust Agreement. The Bank of New York will also act as indenture
trustee under the Guarantee and the Indenture. See "Description of Guarantee"
and "Description of Junior Subordinated Debentures." The holder of the Common
Securities of the Trust or, if an Event of Default under the Trust Agreement has
occurred and is continuing, the holders of not less than a majority in
Liquidation Amount of the Trust Preferred Securities will be entitled to
appoint, remove or replace the Property Trustee and/or the Delaware Trustee. In
no event will the holders of the
Trust Preferred Securities havetrust securities. The property trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the right to
vote to appoint, remove or replace the Administrative Trustees; such voting
rights will be vested exclusively in the holderholders of the Common Securities.trust
securities out of funds from the payment account. The duties and obligations of each Issuer Trustee are governed byguarantee trustee will
hold the Trust
Agreement. The Corporation, as issuerguarantee for the benefit of the Junior Subordinated Debentures,
will pay all fees, expenses, debts and obligations (other than the payment of
principal, interest and premium, if any, on the Trust Securities) related to the
Trust and the offeringholders of the Trust Preferred Securities and will pay, directly
or indirectly, all ongoing costs, expenses and liabilities (other than the
payment of principal, interest and premium, if any, on the Trust Securities) of
the Trust. The principal executive office of the Trust is c/o The Bank of New
York, 101 Barclay Street, New York, New York 10286.
33
preferred securities.
DESCRIPTION OF TRUSTTHE PREFERRED SECURITIES
THE PREFERRED SECURITIES WILL BE ISSUED PURSUANT TO THE TRUST AGREEMENT. FOR
MORE INFORMATION ABOUT THE TRUST AGREEMENT, SEE "DESCRIPTION OF THE TRUST" ON
PAGE 19. THE BANK OF NEW YORK WILL ACT AS PROPERTY TRUSTEE FOR THE PREFERRED
SECURITIES UNDER THE TRUST AGREEMENT FOR PURPOSES OF COMPLYING WITH THE
PROVISIONS OF THE TRUST INDENTURE ACT. THE TERMS OF THE PREFERRED SECURITIES
WILL INCLUDE THOSE STATED IN THE TRUST AGREEMENT AND THOSE MADE PART OF THE
TRUST AGREEMENT BY THE TRUST INDENTURE ACT.
THE FOLLOWING DISCUSSION CONTAINS A DESCRIPTION OF THE MATERIAL PROVISIONS
OF THE PREFERRED SECURITIES AND IS SUBJECT TO, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO, THE TRUST AGREEMENT AND THE TRUST INDENTURE ACT. INDEPENDENT
URGES YOU TO READ THE FORM OF AMENDED AND RESTATED AGREEMENT, WHICH IS FILED AS
AN EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS FORMS A PART.
GENERAL
The Trust Preferred Securities will represent undivided beneficial
interests intrust agreement authorizes the Trust and the holders thereof will be entitled to a preference
over the Common Securities in certain circumstances with respect to
Distributions and amounts payable on redemption of the Trust Securities or
liquidation of the Trust. See "--Subordination of Common Securities." The Trust
Agreement will be qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). This summary of certain provisions of the Trust
Preferred Securities, the Common Securities and the Trust Agreement does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the Trust Agreement, including the
definitions therein of certain terms, and the Trust Indenture Act. The form of
the Trust Agreement has been filed as an exhibit to the Registration Statement
of which this Prospectus forms a part.
General
Pursuant to the terms of the Trust Agreement, the Issuer Trustees,administrative trustees, on behalf of the
Trust, willtrust, acting singly or jointly, to issue the Trust Securities. Alltrust securities, which are
comprised of the Common
Securitiespreferred securities to be sold to the public and the common
securities. Independent will be ownedown all of the common securities issued by the
Corporation.trust. The Trust Preferred Securitiestrust is not permitted to issue any securities other than the trust
securities or incur any other indebtedness.
The preferred securities will represent preferred undivided beneficial
interests in the assets of the Trusttrust, and the holders thereofof the preferred
securities will be entitled to a preference in certain
circumstancesover the common securities upon an
event of default with respect to Distributionsdistributions and amounts payable on redemption
or liquidation over the Common Securities, as well as other benefits as described
in the Trust Agreement.liquidation. The Trust Agreement does not permit the issuance by the
Trust of anypreferred securities other than the Trust Securities or the incurrence of any
indebtedness by the Trust.
The Trust Preferred Securities will rank pari passu,equally, and payments on the
preferred securities will be made thereon pro rata,proportionally, with the Common Securitiescommon securities,
except as described under "--Subordination of Common Securities." LegalSecurities" on page 24.
The property trustee will hold legal title to the Junior Subordinated
Debentures will be held by the Property Trusteedebentures in trust for
the benefit of the holders of the Trust Securities. The Guaranteetrust securities. Independent will not guarantee
the payment of Distributions or amounts payable ondistributions out of money held by the trust, and payments upon
redemption of the Trust Preferred Securitiespreferred securities or liquidation of the Trusttrust, to the
extent described under "--Description of the Guarantee" on page 43. The
guarantee does not cover the payment of any distribution or the liquidation
amount when the Trusttrust does not have sufficient funds on hand legallyavailable to make these
payments.
DISTRIBUTIONS
SOURCE OF DISTRIBUTIONS. The funds of the trust available for such payments. See "Descriptiondistribution
to holders of Guarantee."the preferred securities will be limited to payments made under
the debentures, which the trust will purchase with the proceeds from the sale of
the trust securities. Distributions Paymentwill be paid through the property trustee,
which will hold the amounts received from Independent's interest payments on the
debentures in the payment account for the benefit of Distributions.the holders of the trust
securities. If Independent does not make interest payments on the debentures,
the property trustee will not have funds available to pay distributions on the
preferred securities.
19
PAYMENT OF DISTRIBUTIONS. Distributions on each Trust Preferred Securitythe preferred securities will be
cumulative, will accumulate from __________ __, 1997 and will be payable
quarterly in arrears on the __ day of March, June, September and December of
each year, commencing _________, 1997, at the annual rate of _____%% of the $25 stated Liquidation Amountliquidation amount, payable
quarterly on March 31, June 30, September 30 and December 31 of $25,each year, to
the holders of the Trust Preferred
Securitiespreferred securities on the relevant record date which, for sodates. So long as
the Trust Preferred
Securities remain in book-entry form, will be one Business Day (as defined
below) prior topreferred securities are represented by a global security, as described
below, the relevant Distribution Date and, in the event the Trust
Preferred Securities are not in book-entry form,record date will be the [firstbusiness day of the
month/fifteenth day of the month immediately preceding the
month] in whichrelevant distribution date. The first distribution date for the relevant Distribution Date occurs. The amountpreferred
securities will be March 31, 2002.
Distributions will accumulate from the date of Distributions payable
34
for any periodissuance, will be cumulative
and will be computed on the basis of a 360-day year of twelve 30-day months and, for any period of less than a full calendar month,months. If
the number of
days elapsed in such month. In the event that anydistribution date on which Distributions
are payable on the Trust Preferred Securities is not a Business Day (as defined
below),business day, then payment of the Distribution payable on such datedistributions
will be made on the next succeeding day that is a Business Day (andbusiness day, without any additional
interest or other payment in respect to any such delay), except thatfor the delay. However, if suchthe next succeeding
Business Day fallsbusiness day is in
the next succeeding calendar year, such payment shallof the distribution will be made on the business
day immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which Distributions are payable
in accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
meanscheduled distribution date. The term "business
day" means any day other than a Saturday, or a Sunday, or a day on which banking
institutions in the City ofMassachusetts and New York, or Rockland, Massachusetts are authorized or required by law,
regulation or executive order to remain closed.
Extension Period. Soclosed or a day on which the corporate
trust office of the property trustee or the indenture trustee is closed for
business.
EXTENSION PERIOD. As long as no Debenture Eventevent of Default shall havedefault under the indenture has
occurred and beis continuing, the Corporation will haveIndependent has the right under the
Indenture to elect to defer the payment of
interest on the Junior Subordinated
Debenturesdebentures at any time or from time to time for a period not exceeding 20 consecutive
quarterly periods with respectquarters. This period of deferral is referred to each Extension Period, provided
that no Extension Period shallas an "extension period." No
extension period may extend beyond , 2031 or end on a date other than
an Interest Payment Date
or extend beyondinterest payment date, which dates are the Stated Maturity Date. Upon any such election,same as the distribution dates. If
Independent defers the payment of interest, quarterly Distributionsdistributions on the
Trust Preferred Securitiespreferred securities will also be deferred by the Trust
during such Extension Period. Distributions to which holders of the Trust
Preferred Securities are entitled during any such Extension Periodextension period. Any
deferred distributions under the preferred securities will accumulate additional
Distributions thereonamounts at the annual rate per annum of ____%
thereof,%, compounded quarterly from the relevant
Distribution Date.distribution date. The term "Distributions,""distributions" as used herein, shall include any such additional
Distributions.
Prior to the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 20 consecutive quarterly periods, to end
on a date other than an Interest Payment Date or to extend beyond the Stated
Maturity Date. Upon the termination of any such Extension Period and the payment
of all amounts then due on any Interest Payment Date, the Corporation may elect
to begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Corporation must give the Property Trustee, the Administrative Trustees and
the Debenture Trustee notice of its election of any such Extension Period (orin this prospectus includes
those accumulated amounts.
During an extension thereof) at least five Business Days prior to the earlier of (i) the
date the Distributions on the Trust Preferred Securities would have been payable
except for the election to begin such Extension Period and (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or automated quotation system or to holders of such Trust Preferred Securities
of the record date or the date such Distributions are payable, but in any event
not less than five Business Days prior to such record date. There is no
limitation on the number of times that the Corporationperiod, Independent may elect to begin an
Extension Period. See "Description of Junior Subordinated Debentures--Option to
Extend Interest Payment Date" and "Certain Federal Income Tax
Consequences--Interest Income and Original Issue Discount."
35
During any such Extension Period, the Corporation may not (i)not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Corporation'sits capital
stock (ii)(other than stock dividends, non-cash dividends in connection with
the implementation of a shareholder rights plan, purchases of common stock
in connection with employee benefit plans or in connection with the
reclassification of any class of its capital stock into another class of
capital stock);
- make any payment of principal, ofinterest or premium if any, on or repay, repurchase
or redeem any debt securities of the Corporation (including any Other
Debentures) that rank pari passuequally with, or junior in
right of paymentinterest to, the Junior Subordinated Debentures or (iii)debentures;
- make any guarantee payments with respect to any other guarantee by the Corporationit of
theany other debt securities of any subsidiary of the Corporation (including Other Guarantees)its subsidiaries if suchthe guarantee
ranks pari passuequally with or junior in right of payment to the Junior Subordinated Debenturesdebentures (other than (a) dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of, common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c) payments under
the Guarantee, (d) theguarantee); or
- redeem, purchase of fractional shares resulting
from a reclassification of the Corporation's capital stock, (e) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged and (f) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit plans
for its directors, officers or employees or any of the Corporation's dividend
reinvestment plans).
The Corporation has no current intention to exercise its option to defer
payments of interest on the Junior Subordinated Debentures.
Source of Distribution. The revenue of the Trust available for distribution
to holders of the Trust Preferred Securities will be limited to payments under
the Junior Subordinated Debentures in which the Trust will invest the proceeds
from the issuance and sale of the Trust Securities. See "Description of Junior
Subordinated Debentures--General." If the Corporation does not make interest
payments on the Junior Subordinated Debentures, the Property Trustee will not
have funds available to pay Distributions on the Trust Preferred Securities. The
payment of Distributions (if and to the extent the Trust has funds on hand
legally available for the payment of such Distributions) will be guaranteed by
the Corporation on a limited basis as set forth herein under "Description of
Guarantee."
Redemption
Mandatory Redemption. Upon the repayment or redemption at any time, in
whole or in part, of any Junior Subordinated Debentures, the proceeds from such
repayment or prepayment shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days' notice of a date of redemption (the "Redemption Date"),
at a redemption price equal to 100% of the principal amount of the Trust
Securities together with accrued and unpaid interest thereon. See "Description
of Junior Subordinated Debentures--Redemption." Ifacquire less than all of the Junior
Subordinated Debentures aredebentures or any of the
preferred securities.
After the termination of any extension period and the payment of all amounts
due, Independent may elect to be prepaid onbegin a Redemption Date, then the
proceeds of such prepayment shall be allocated pro ratanew extension period, subject to the Trust Securities.
36
Optional Redemption. The Corporationabove
requirements.
Independent does not currently intend to exercise its right to defer
distributions on the preferred securities by deferring the payment of interest
on the debentures.
REDEMPTION OR EXCHANGE
GENERAL. Subject to the prior approval of the Federal Reserve, if required,
Independent will have the right to redeem the Junior Subordinated Debentures (i) on or after _________________, 2002,debentures:
- in whole at any time, or in part from time to time, on or after
, 2006;
20
- at any time, in whole but not in part, within 180 days following the
occurrence of a Tax Event, an Investment Company Event or a Capital
Treatment Event, which terms Independent defined below; or
- at any time, and from time to time, to the extent of any preferred
securities purchased by Independent, plus a proportionate amount of the
common securities it holds.
MANDATORY REDEMPTION. Upon Independent's repayment or redemption, in whole
or in part, of any debentures, whether on , 2031, or earlier, the
property trustee will apply the proceeds to redeem the same amount of the trust
securities, upon not less than 30 days nor more than 60 days notice, at the
redemption price. The redemption price will equal 100% of the aggregate
liquidation amount of the trust securities plus accumulated but unpaid
distributions to the date of redemption. If less than all of the debentures are
to be repaid or redeemed on a date of redemption, then the proceeds from such
repayment or redemption will be allocated to redemption of preferred securities
and common securities proportionately.
DISTRIBUTION OF DEBENTURES IN EXCHANGE FOR PREFERRED SECURITIES. Upon prior
approval of the Federal Reserve, if required, Independent will have the right at
any time to dissolve the trust and, after satisfaction of the liabilities of
creditors of the trust as provided by applicable law, including, without
limitation, amounts due and owing the trustees of the trust, cause the
debentures to be distributed directly to the holders of trust securities in
liquidation of the trust. See "--Liquidation Distribution Upon Dissolution" on
page 24.
After the liquidation date fixed for any distribution of debentures in
exchange for preferred securities:
- those trust securities will no longer be deemed to be outstanding;
- a registered global certificate representing debentures in a principal
amount equal to the accrued and unpaid interestliquidation amount of those preferred securities will
be issued to DTC or its nominee in exchange for the preferred securities;
- Independent will use its best efforts to list the debentures on the Junior Subordinated Debentures so redeemedNasdaq
National Market or a national securities exchange;
- any certificates representing trust securities not held by DTC or its
nominee that are not surrendered for exchange will be deemed to represent
debentures with a principal amount equal to the liquidation amount of
those preferred securities, accruing interest at the rate provided for in
the debentures from the last distribution date fixed for redemption, plus 100%on the preferred
securities; and
- all rights of the principal amount thereof, in
each case subjecttrust security holders other than the right to receiptreceive
debentures upon surrender of prior approval bya certificate representing trust securities
will terminate.
Independent cannot assure you that the Federal Reserve. See
"Descriptionmarket prices for the preferred
securities or the debentures that may be distributed if a dissolution and
liquidation of Junior Subordinated Debentures--Redemption."the trust were to occur would be favorable. The preferred
securities that an investor may purchase, or the debentures that an investor may
receive on dissolution and liquidation of the trust, may trade at a discount to
the price that the investor paid to purchase the preferred securities.
REDEMPTION UPON A TAX EVENT, INVESTMENT COMPANY EVENT OR CAPITAL TREATMENT
EVENT. If a Tax Event, an Investment Company Event Regulatoryor a Capital Treatment Event
or
Distribution of Junior Subordinated Debentures. If a Special Event shall occur
and be continuing, the Corporation hasoccurs, Independent will have the right to redeem the Junior
Subordinated Debenturesdebentures in whole, (butbut
not in part)part, and thereby cause a mandatory redemption of all of the Trust Securities in whole (but not in part)trust
securities at the redemption price within 90 days following the occurrenceprice. If one of such Special Event, in each
case subject to receipt of prior approval by the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal Reserve.
In the event a Special Event, has occurredthese events occurs and
is continuing and the CorporationIndependent does not elect to redeem the Junior Subordinated Debentures and thereby cause a
mandatory redemption of the Trust Securitiesdebentures, or to liquidatedissolve the Trusttrust
and cause the Junior Subordinated Debenturesdebentures to be distributed to holders of the Trust
Securities in liquidation oftrust securities,
then the Trust as described below, such Trust Securitiespreferred securities will remain outstanding and Additional Sums (as defined below)additional interest
may be payable on the Junior Subordinated Debentures.
Definitions
"Additional Sums"debentures.
21
"Tax Event" means the additional amounts as may be necessary to be
paidreceipt by the Corporation with respect to the Junior Subordinated Debenturestrust and Independent of an opinion of
independent tax counsel experienced in ordersuch matters stating that, the amount of Distributions then due and payable by the Trust on the
outstanding Trust Securities of the Trust shall not be reduced as a result of
any additional taxes, duties and other governmental charges to whichchange or prospective change in the Trust
has become subjectlaws or regulations of the United States
or any political subdivision or taxing authority of the United States, or as a
result of a Tax Event.
Anany official administrative pronouncement or judicial decision
interpreting or applying the tax laws or regulations, there is more than an
insubstantial risk that:
- interest payable by Independent on the debentures is not, or within
90 days of the date of the opinion will not be, deductible by Independent,
in whole or in part, for federal income tax purposes;
- the trust is, or will be within 90 days after the date of the opinion,
subject to federal income tax with respect to income received or accrued
on the debentures; or
- the trust is, or will be within 90 days after the date of the opinion,
subject to more than an immaterial amount of other taxes, duties,
assessments or other governmental charges.
"Investment Company Event" means the receipt by the Corporationtrust and Independent of
an opinion of independent securities counsel experienced in such matters to the
effect that the trust is or will be, within 90 days after the date of the
opinion, considered an "investment company" that is required to be registered
under the Investment Company Act, as a result of anya change in law or regulation
or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or
regulatory authority the Trust is or will be considered an "investment company"
that is required to be registered under the Investment Company Act, which change
becomes effective on or after the original issuance of the Trust Preferred
Securities.
"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount (as defined below) equal to that
portion of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Trust Preferred Securities based upon the relative
Liquidation Amounts of such classes and the proceeds of which will be used to
pay the redemption price of such Trust Securities, and (ii) with respect to a
distribution of Junior Subordinated Debentures to holders of Trust Securities in
connection with a dissolution or liquidation of the Trust, Junior Subordinated
Debentures having a principal amount equal to the
37
Liquidation Amount of the Trust Securities of the holder to whom such Junior
Subordinated Debentures are distributed.
"Liquidation Amount"regulation.
"Capital Treatment Event" means the stated amountreceipt by the trust and Independent of $25 per Trust Security.
A "Regulatory Capital Event" means that the Corporation shall have received
an opinion of independent bank regulatorybanking counsel experienced in such matters to the
effect that as a resultthere is more than an insubstantial risk of (a) any amendment to, or change (including any
announced prospective change) in,impairment, within
90 days after the laws (or any regulations thereunder)date of the United States or any rules,opinion, of Independent's ability to treat the
preferred securities as Tier 1 capital for purposes of the current capital
adequacy guidelines or policies of the Federal Reserve, or
(b) any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after date of the original
issuance of the Trust Preferred Securities, the Trust Preferred Securities do
not constitute, or within 90 days of the date thereof, will not constitute, Tier
I Capital (or its then equivalent); provided, however, that the distribution of
the Junior Subordinated Debentures in connection with the termination of the
Trust by the Corporation shall not in and of itself constitute a Regulatory
Capital Event.
A "Special Event" means a Tax Event, an Investment Company Event or a
Regulatory Capital Event, as the case may be.
A "Tax Event" means the receipt by the Corporation and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result of any amendment to or change (including any announced prospective change) in,
the
laws or any regulations thereunderregulations.
For all of the United Statesevents described above, Independent or any political
subdivision or taxing authority thereof or therein, or asthe trust must request
and receive an opinion with regard to the event within a resultreasonable period of
any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on ortime after the original issuanceIndependent becomes aware of the Trust Preferred Securities, there is more thanpossible occurrence of an insubstantial risk that
(i) the Trust is, or will be within 90 daysevent of
this kind.
REDEMPTION OF DEBENTURES IN EXCHANGE FOR PREFERRED SECURITIES
PURCHASED. Upon prior approval of the date of such opinion, subject
to United States federal income tax with respect to income received or accrued
on the Junior Subordinated Debentures, (ii) interest payable by the Corporation
on the Junior Subordinated Debentures is not, or within 90 days of the date of
such opinionFederal Reserve, if required, Independent
will not be, deductible by the Corporation, in whole or in part,
for United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days of the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
38
Distribution of Junior Subordinated Debentures
The Corporation willalso have the right at any time, and from time to terminatetime, to redeem
debentures in exchange for any preferred securities it may have purchased in the
Trust and,
after satisfactionmarket. If Independent elects to surrender any preferred securities beneficially
owned by it in exchange for redemption of liabilities to creditorsa like amount of the Trust as requireddebentures,
Independent will also surrender a proportionate amount of common securities in
exchange for debentures. Preferred securities owned by applicable law, to cause the Junior Subordinated Debentures to be distributed to
theother holders of the Trust Securities in liquidation of the Trust. Such right is
subject to (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be
a taxable eventcalled for redemption at any time when Independent elects to holdersexchange trust
securities it owns to redeem debentures.
The common securities Independent surrenders will be in the same proportion
to the preferred securities it surrenders as is the ratio of Trust
Preferred Securities and (ii)common securities
purchased by Independent to the prior approvalpreferred securities issued by the Federal Reserve if then
required under applicable capital guidelines or policies oftrust. In
exchange for the Federal Reserve.
Aftertrust securities surrendered by Independent, the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securitiesproperty
trustee will no longer be deemedcause to be outstanding, (ii) DTC or its nominee
will receive, in respect of each registered global certificate, if any,
representing Trust Securities and held by it, a registered global certificate or
certificates representing the Junior Subordinated Debenturesreleased to be delivered
upon such distribution and (iii) any certificates representing Trust Securities
not held by DTC or its nominee will be deemed to represent Junior Subordinated
Debentures havingIndependent for cancellation debentures
with a principal amount equal to the Liquidation Amountliquidation amount of such
Trust Securities, and bearing accrued andthe trust securities,
plus any accumulated but unpaid interest indistributions, if any, then held by the property
trustee allocable to those trust securities. After the date of redemption
involving an amount equal toexchange by Independent, the accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Administrative Trustees or their agent for
cancellation, whereupon the Corporationtrust securities Independent
surrenders will issue to such holder,no longer be deemed outstanding and the Debenture Trustee will authenticate, a certificate representing such Junior
Subordinated Debentures.
There can be no assurance as to the market prices for the Trust Preferred
Securities or the Junior Subordinated Debentures that may be distributeddebentures redeemed in
exchange for the Trust Securities if a dissolution and liquidation of the Trust
were to occur. Accordingly, the Trustwill be cancelled.
REDEMPTION PROCEDURES
Preferred Securities that an investor may
purchase, or the Junior Subordinated Debentures that the investor may receive on
dissolution and liquidation of the Trust, may trade at a discount to the price
that the investor paid to purchase the Trust Preferred Securities offered
hereby.
Redemption Procedures
If applicable, Trust Securities shallsecurities will be redeemed at the redemption price with the
applicable proceeds from theIndependent's contemporaneous repayment or prepaymentredemption of the
Junior
Subordinated Debentures. Any redemptiondebentures. Redemptions of Trust Securities shallthe preferred securities will be made, and the
redemption price shallwill be payable, on the Redemption Dateeach redemption date only to the extent
that the Trusttrust has funds legally available for the payment of such redemption
price. See also "--Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Trust Preferred
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are legally available, with respect to the Trust Preferred
Securities held by DTC or its nominees, the Property Trustee will deposit or
cause the Paying Agent (as defined herein) to deposit irrevocably with DTC funds
sufficient to pay the redemption price and will give DTC or its nominees
irrevocable instructions and authority to pay the redemption price to the
holders of such Trust
39
Preferred Securities. See "Book-Entry Issuance." If such Trust Preferred
Securities are no longer in book-entry form, the Property Trustee, to the extent
funds are legally available, will irrevocably deposit with the paying agent for
such Trust Preferred Securities funds sufficient to pay the aggregate redemption
price and will give such paying agent irrevocable instructions and authority to
pay the redemption price to the holders thereof upon surrender of their
certificates evidencing such Trust Preferred Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date shall be
payable to the holders of such Trust Preferred Securities on the relevant record
dates for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then upon the date of such deposit,
all rights of the holders of the Trust Preferred Securities called for
redemption will cease, except the right of the holders of such Trust Preferred
Securities to receive the redemption price, but without interest on such
redemption price and such Trust Preferred Securities will cease to be
outstanding. In the event that any Redemption Date of Trust Preferred Securities
is not a Business Day, then the redemption price, payable on such date will be
paid on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if such next
succeeding Business Day falls in the next calendar year, such payment shall be
made on the immediately preceding Business Day. In the event that payment of the
redemption price is improperly withheld or refused and not paid either by the
Trust or by the Corporation pursuant to the Guarantee as described under
"Description of Guarantee," (i) Distributions on Trust Preferred Securities will
continue to accumulate at the then applicable rate, from the Redemption Date
originally established by the Trust to the date such redemption price is
actually paid and (ii) the actual payment date will be the Redemption Date for
purposes of calculating the redemption price.
Subject to applicable law (including, without limitation, United States
federal securities law and the regulations of the Federal Reserve), the
Corporation or its subsidiaries may at any time and from time to time purchase
outstanding Trust Preferred Securities by tender, in the open market or by
private agreement.
Payment of the redemption price on the Trust Preferred Securities and any
distribution of Junior Subordinated Debentures to holders of Trust Preferred
Securities shall be made on the Redemption Date.
If less than all of the Trust Securities issued by the Trust are to be
redeemed on a Redemption Date, then the aggregate redemption price for such
Trust Securities to be redeemed shall be allocated pro rata to the Trust
Preferred Securities and Common Securities based upon the relative Liquidation
Amounts of such classes. The particular Trust Preferred Securities to be
redeemed shall be selected by the Property Trustee from the outstanding Trust
Preferred Securities not previously called for redemption, by such method as the
Property Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $25 or an integral multiple
thereof) of the Liquidation Amount of Trust Preferred Securities. The Property
Trustee shall promptly notify the security registrar in writing of the Trust
Preferred Securities selected for redemption and, in the case of any Trust
Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For
4022
all purposes of the Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Trust Preferred Securities shall relate
to the portion of the aggregate Liquidation Amount of Trust Preferred Securities
which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days, but not more than
60 days, prior tobefore the Redemption Datedate of redemption to each holder of Trust Securitiestrust securities to be
redeemed at its registered address. Unless the CorporationIndependent defaults in payment of
the redemption price on or in the repayment of,debentures, interest will cease to accumulate on the
Junior Subordinated Debentures,debentures called for redemption on and after the Redemption Date,date of redemption.
If the trust gives notice of redemption of its trust securities, then the
property trustee, to the extent funds are available, will irrevocably deposit
with the depositary for the trust securities funds sufficient to pay the
aggregate redemption price and will give the depositary for the trust securities
irrevocable instructions and authority to pay the redemption price to the
holders of the trust securities. If the preferred securities are no longer in
book-entry only form, the property trustee, to the extent funds are available,
will deposit with the designated paying agent for such preferred securities
funds sufficient to pay the aggregate redemption price and will give the paying
agent irrevocable instructions and authority to pay the redemption price to the
holders upon surrender of their certificates evidencing the preferred
securities. Distributions payable on or prior to the date of redemption for any
trust securities called for redemption will be payable to the holders of the
trust securities on the relevant record dates for the related distribution
dates.
If notice of redemption has been given and Independent has deposited funds
as required, then on the date of the deposit all rights of the holders of the
trust securities called for redemption will cease, except the right to accruereceive
the redemption price, but without interest on such redemption price after the
date of redemption. The trust securities will also cease to be outstanding on
the Trust
Securitiesdate of the deposit. If any date fixed for redemption of trust securities is
not a business day, then payment of the redemption price payable on that date
will be made on the next day that is a business day without any additional
interest or other payment in respect of the delay. However, if the next business
day is in the next succeeding calendar year, payment will be made on the
immediately preceding business day.
If payment of the redemption price in respect of trust securities called for
redemption.
Subordinationredemption is improperly withheld or refused and not paid by the trust, or by
Independent pursuant to the guarantee, distributions on the trust securities
will continue to accumulate at the applicable rate from the date of Common Securitiesredemption
originally established by the trust for the trust securities to the date the
redemption price is actually paid. In this case, the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
redemption price.
Payment of Distributionsthe redemption price on the preferred securities and any
distribution of debentures to holders of preferred securities will be made to
the applicable recordholders as they appear on the register for the preferred
securities on the relevant record date. As long as the preferred securities are
represented by a global security, the record date will be the business day
immediately preceding the date of redemption or liquidation date, as applicable.
If less than all of the trust securities are to be redeemed, then the
aggregate liquidation amount of the trust securities to be redeemed will be
allocated proportionately to those trust securities based upon the relative
liquidation amounts. The particular preferred securities to be redeemed will be
selected by the property trustee from the outstanding preferred securities not
previously called for redemption by a method the property trustee deems fair and
appropriate. This method may provide for the redemption of portions equal to $25
or an integral multiple of $25 of the liquidation amount of the preferred
securities. The property trustee will promptly notify the registrar for the
preferred securities in writing of the preferred securities selected for
redemption and, in the case of any preferred securities selected for partial
redemption, the liquidation amount to be redeemed. If the redemption relates
only to preferred securities purchased by Independent and being exchanged for a
like amount of debentures, then Independent's preferred securities will be the
ones selected for redemption.
Subject to applicable law, and if Independent is not exercising its right to
defer interest payments on the debentures, Independent may, at any time,
purchase outstanding preferred securities.
23
SUBORDINATION OF COMMON SECURITIES
Payment of distributions on, and the redemption price of, the Trust
Securities, as applicable, shallpreferred
securities and common securities will be made pro rata based on the Liquidation
Amountliquidation amount of
these securities. However, if an event of default under the indenture has
occurred and is continuing, no distributions on or redemption of the Trust Securities; provided, however, that if on any Distribution
Date or Redemption Date a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution on, or applicable redemption price
of, any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of the Common Securities, shallcommon
securities may be made unless payment in full in cash of all accumulated and
unpaid Distributionsdistributions on all of the outstanding Trust Preferred Securitiespreferred securities for all
Distributiondistribution periods terminating on or prior thereto,before that time, or in the case of
payment of the redemption price, payment of the full amount of suchthe redemption
price shall haveon all of the outstanding preferred securities then called for redemption,
has been made or provided for, and allfor. All funds available to the Property Trustee shallproperty trustee will
first be applied to the payment in full in cash of all Distributionsdistributions on, or the
redemption price of, the Trust Preferred Securitiespreferred securities then due and payable.
In the case of the occurrence and continuance of any Eventevent of Defaultdefault under
the Trust Agreement relating to a
Debenture Eventtrust agreement resulting from an event of Default,default under the Corporationindenture,
Independent, as holder of the Common Securitiescommon securities, will be deemed to have waived
any right to act with respect to such Eventthat event of Defaultdefault under the trust agreement
until the effect of such Eventthe event of Default shall havedefault with respect to the preferred
securities has been cured, waived or otherwise eliminated. Until any such Eventthe event of
Defaultdefault under the trust agreement has been so cured, waived or otherwise
eliminated, the Property Trustee shallproperty trustee will act solely on behalf of the holders of the
Trust Preferred Securitiespreferred securities and not on Independent's behalf, of the
Corporation as holder of the Common Securities, and only the holders of
the Trust Preferred Securitiespreferred securities will have the right to direct the Property Trusteeproperty trustee to
act on their behalf.
Liquidation Distribution Upon Termination
The CorporationLIQUIDATION DISTRIBUTION UPON DISSOLUTION
Independent will have the right at any time to terminatedissolve the Trusttrust and cause
the Junior Subordinated Debenturesdebentures to be distributed to the holders of the Trust Preferred Securities. Suchpreferred securities.
This right is subject, however, to (i)Independent receiving approval of the Corporation having
received an opinionFederal
Reserve, if required.
In addition, the trust will automatically dissolve upon expiration of counselits
term and will dissolve earlier on the first to occur of:
- Independent's bankruptcy, dissolution or liquidation;
- the distribution of a like amount of the debentures to the effectholders of
trust securities, if Independent has given written direction to the
property trustee to terminate the trust;
- redemption of all of the preferred securities as described on page 21
under "--Redemption or Exchange--Mandatory Redemption"; or
- the entry of a court order for the dissolution of the trust.
With the exception of a redemption as described on page 21 under
"--Redemption or Exchange--Mandatory Redemption," if an early dissolution of the
trust occurs, the trust will be liquidated by the administrative trustees as
expeditiously as they determine to be possible. After satisfaction of
liabilities to creditors of the trust as provided by applicable law, the
trustees will distribute to the holders of trust securities, debentures:
- in an aggregate stated principal amount equal to the aggregate stated
liquidation amount of the trust securities;
- with an interest rate identical to the distribution rate on the trust
securities; and
- with accrued and unpaid interest equal to accumulated and unpaid
distributions on the trust securities.
However, if the property trustee determines that suchthe distribution is not
practical, then the holders of trust securities will be entitled to receive,
instead of debentures, a proportionate amount of the liquidation distribution.
The liquidation distribution will be the amount equal to the aggregate of the
liquidation amount plus accumulated and unpaid distributions to the date of
payment. If the liquidation
24
distribution can be paid only in part because the trust has insufficient assets
available to pay in full the aggregate liquidation distribution, then the
amounts payable directly by the trust on the trust securities will be paid on a
proportional basis, based on liquidation amounts, to Independent, as the holder
of the common securities, and to the holders of the preferred securities.
However, if an event of default under the indenture has occurred and is
continuing, the preferred securities will have a priority over the common
securities. See "--Subordination of Common Securities" on page 24.
Under current federal income tax law and interpretations and assuming that
the trust is treated as a grantor trust, as is expected, a distribution of the
debentures should not be a taxable event to holders of Trust Preferred Securities, and (ii) the Corporation having received prior approval of the Federal Reserve if then
required under applicable capital guidelinespreferred securities.
Should there be a change in law, a change in legal interpretation, a Tax Event
or policies of the Federal Reserve.
See "--Distribution of Junior Subordinated Debentures."
41
In addition, the Trust shall automatically terminate upon the first to
occur of: (i) certain events of bankruptcy, dissolution or liquidation of the
Corporation; (ii)another circumstance, however, the distribution ofcould be a Like Amount of the Junior Subordinated
Debentures to the holders of the Trust Securities, if the Corporation, as
Sponsor, has given written direction to the Property Trustee to terminate the
Trust (which direction is optional and, except as described above, wholly within
the discretion of the Corporation, as Sponsor); (iii) redemption of all of the
Trust Securities as described under "--Redemption;" (iv) expiration of the term
of the Trust; and (v) the entry of an order for the dissolution of the Trust by
a court of competent jurisdiction.
If a termination occurs as described in clause (i), (ii), (iv), or (v)
above, the Trust shall be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of the Trust as provided by applicable law, to the
holders of the Trust Securities a Like Amount of the Junior Subordinated
Debentures, unless such distribution is determined by the Property Trustee not
to be practicable, in whichtaxable event such holders will be entitled to receive out
of the assets of the Trust legally available for distribution to holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to the aggregate of the Liquidation Amount plus accumulated
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Trust has insufficient assets on hand legally available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Trust Securities shall be paid on a pro rata basis,
except that if a Debenture Event of Default has occurred and is continuing, the
Trust Preferred Securities shall have a priority over the Common Securities. See
"--Subordination of Common Securities."
If the Corporation elects not to prepay the Junior Subordinated Debentures
prior to maturity in accordance with their terms and either elects not to or is
unable to liquidate the Trust and distribute the Junior Subordinated Debentures to
holders of the Trust Securities,preferred securities. See "Material Federal Income Tax
Consequences--Receipt of Debentures or Cash Upon Liquidation of the Trust SecuritiesTrust" on
page 47 for more information regarding a taxable distribution.
If Independent does not elect to redeem the debentures prior to maturity or
to liquidate the trust and distribute the debentures to holders of the preferred
securities, the preferred securities will remain outstanding until the repayment
of the Junior Subordinated Debentures on the Stated Maturity
Date.debentures. If the CorporationIndependent elects to liquidatedissolve the Trusttrust and thereby causesthus cause
the Junior Subordinated Debenturesdebentures to be distributed to holders of the Trust
Preferred Securitiespreferred securities in
liquidation of the Trust, the Corporation shalltrust, Independent will continue to have the right to shorten
the maturity of such Junior Subordinated
Debentures, subjectthe debentures.
LIQUIDATION VALUE
The amount of the liquidation distribution payable on the preferred
securities in the event of any liquidation of the trust is $25 per preferred
security plus accumulated and unpaid distributions to certain conditions. See "Descriptionthe date of Junior
Subordinated Debentures--General."
42
Eventspayment, which
may be in the form of Default; Noticea distribution of debentures having a liquidation value
and accrued interest of an equal amount.
EVENTS OF DEFAULT; NOTICE
Any one of the following events that has occurred and is continuing
constitutes an "Eventevent of Default"default under the
Trust Agreement (an "Event of
Default")trust agreement with respect to the Trust Preferred Securities (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(i)preferred securities:
- the occurrence of a Debenture Eventan event of Default (see "Description
of Junior Subordinated Debentures--Debenture Events of Default"); or
(ii)default under the indenture;
- a default by the Trusttrust in the payment of any Distributiondistribution when it becomes
due and payable, and continuation of suchthe default for a period of 30 days;
or
(iii)- a default by the Trusttrust in the payment of the redemption price of any Trust Securityof
the trust securities when it becomes due and payable;
or
(iv)- a default in the performance, or breach, in any material respect, of any
covenant or warranty of the Issuer Trusteestrustees in the Trust Agreement
(othertrust agreement, other than
a default or breachthose defaults covered in the performance of a covenant or
warranty which is addressed in clause (ii) or (iii) above),previous two points, and continuation of suchthe
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Issuer
Trustee or Trusteestrustee(s) by the holders of at least
25% in aggregate Liquidation
Amountliquidation amount of the outstanding Trust Preferred Securities,preferred
securities, a written notice specifying suchthe default or breach and
requiring it to be remedied and stating that suchthe notice is a "Notice of
Default" under the Trust
Agreement;trust agreement; or
(v)- the occurrence of certain events of bankruptcy or insolvency with respect to the
Property Trusteeproperty trustee and theIndependent's failure by the Corporation to appoint a successor Property Trusteeproperty
trustee within 60 days thereof.days.
Within ten Business Daysfive business days after the occurrence of any Eventevent of Defaultdefault
actually known to the Property Trustee,property trustee, the Property Trustee shallproperty trustee will transmit
notice of such Eventthe event of Defaultdefault to the holders of the Trust Preferred
Securities,preferred securities, the
Administrative Trusteesadministrative trustees and to Independent, unless the Corporation, as Sponsor, unless
such Eventevent of Default shall havedefault has been
cured or waived. The Corporation, as
Sponsor,Independent and the Administrative Trusteesadministrative trustees are required to
file annually with the Property Trusteeproperty trustee a certificate as to whether or not
Independent and they are in compliance with all the conditions and covenants
applicable to themeach party under the Trust Agreement.trust agreement.
25
If a Debenture Eventan event of Defaultdefault under the indenture has occurred and is continuing,
the Trust
Preferred Securities shallpreferred securities will have a preference over the Common Securities as
described under "--Liquidationcommon securities upon
dissolution of the Trust and Distributiontrust. The existence of Junior
Subordinated Debentures" and "--Subordinationan event of Common Securities." Upon a
Debenture Event of Default, unlessdefault under the principal of all the Junior Subordinated
Debentures has already become due and payable, either the Property Trustee or
the
43
holders oftrust
agreement does not less than 25% in aggregate principal amount of the Junior
Subordinated Debentures then outstanding may declare all of the Junior
Subordinated Debentures to be due and payable immediately by giving notice in
writing to the Corporation (and to the Property Trustee, if notice is given by
holders of the Junior Subordinated Debentures). If the Property Trustee orentitle the holders of preferred securities to accelerate the
Junior Subordinated Debentures fail to declare the principal of
allmaturity of the Junior Subordinated Debentures duedebentures, and payable uponthus cause a Debenture Eventredemption of Default, the preferred
securities, unless the event of default is caused by the occurrence of an event
of default under the indenture and both the indenture trustee and holders of at
least 25% in Liquidation Amountprincipal amount of the Trust
Preferred Securities then outstanding shall havedebentures fail to accelerate the right to declare the Junior
Subordinated Debentures immediately due and payable. In either event, payment of
principal and interest on the Junior Subordinated Debentures shall remain
subordinated to the extent provided in the Indenture. In addition, holdersmaturity
of the Trust Preferred Securities havedebentures.
REMOVAL OF THE TRUSTEES
Unless an event of default under the right in certain circumstances to bring
a Direct Action. See "Description of Junior Subordinated Debentures--Enforcement
of Certain Rights by Holders of Trust Preferred Securities."
Removal of Issuer Trustees
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Defaultindenture has occurred and is
continuing, Independent may remove any trustee at any time. If an event of
default under the Property Trusteeindenture has occurred and the Delaware Trustee may be removed at such time byis continuing, only the holders of
a majority in Liquidation Amountliquidation amount of the outstanding Trust Preferred
Securities. In no event willpreferred securities may
remove the property trustee or the Delaware trustee. The holders of the
Trust Preferred Securitiespreferred securities have theno right to vote to appoint, remove or replace the
Administrative Trustees,
which votingadministrative trustees. These rights are vested exclusively in the Corporationwith Independent as
the holder of the Common Securities.common securities. No resignation or removal of an Issuer Trusteea trustee and
no appointment of a successor trustee shallwill be effective until the acceptance of
appointment by the successor
trustee accepts the appointment in accordance with the provisions of the
Trust Agreement.
Co-trustees and Separate Property Trusteetrust agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Eventevent of Default shall havedefault under the indenture has occurred and beis
continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of Trust Propertythe trust property may
at the time be located, Independent will have the Corporation as the holderpower to appoint at any time
or times, and upon written request of the Common Securities, and
the Administrative Trustees shall have power toproperty trustee will appoint, one or
more persons or entities either (1) to act as a co-trustee, jointly with the
Property Trustee,property trustee, of all or any part of such Trust Property,the trust property, or (2) to act as
separate trustee of any such property,
intrust property. In either case, with suchthese trustees will have
the powers asthat may be provided in the instrument of appointment, and to vestwill have
vested in such person or persons in such capacitythem any property, title, right or power deemed necessary or
desirable, subject to the provisions of the Trust Agreement.trust agreement. In case a Debenture Eventan event of
Defaultdefault under the indenture has occurred and is continuing, the Property Trusteeproperty trustee
alone shallwill have power to make suchthe appointment.
MergerMERGER OR CONSOLIDATION OF TRUSTEES
Generally, any person or Consolidationsuccessor to any of Issuer Trustees
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural persontrustees may be merged or converted
or with which it may be
44
consolidated, ora successor
trustee to any Personof the trustees, including a successor resulting from a merger or
consolidation. However, any merger, conversion or
consolidation to which such Issuer Trustee shall be a party, or any Person
succeeding tosuccessor trustee must meet all or substantially all the corporate trust business of such
Issuer Trustee, shall be the successor of such Issuer Trustee under the Trust
Agreement, provided such Person shall be otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the
Trustqualifications and eligibility standards to act as a trustee.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trusttrust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
as an
entirety or substantially as an entirety to any corporation or other Person,person, except as
described below or as otherwise described underin "--Liquidation Distribution Upon Dissolution"
on page 24. For these purposes, if Independent consolidates or merges with
another entity, or transfers or sells substantially all of its assets to another
entity, in some cases that transaction may be considered to involve a
replacement of the Trusttrust, and Distribution of Junior Subordinated Debentures."the conditions set forth below would apply to such
transaction. The Trusttrust may, at theIndependent's request, of the Corporation, as Sponsor, with the consent of the
Administrative
Trustees butadministrative trustees and without the consent of the holders of the Trust Preferred
Securities, merge withpreferred
securities, the property trustee or into, consolidate, amalgamate, or be replaced by or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety tothe Delaware trustee, undertake a
trust organized as such undertransaction listed above if the laws of any
State; provided, that (i) suchfollowing conditions are met:
- the successor entity either (a) expressly assumes all of the obligations
of the Trusttrust with respect to the Trust Securitiespreferred securities, or (b) substitutes
for the Trust Securitiespreferred securities other securities having substantially the
same terms as the Trust Securities (the "Successor Securities"preferred securities (referred to as "successor
securities") so
26
long as the Successor Securitiessuccessor securities rank the same in priority as the
Trust Securities rank in prioritypreferred securities with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Corporation expresslyotherwise;
- Independent appoints a trustee of suchthe successor entity possessing
substantially the same powers and duties as the Property Trustee with
respect toproperty trustee in its
capacity as the Junior Subordinated Debentures, (iii)holder of the Successor Securitiesdebentures;
- the successor securities are listed or any Successor Securitiestraded or will be listed upon notification of
issuance,or traded
on any national securities exchange or other organization on which the
Trust Preferred Securitiespreferred securities are then listed, or quoted, if any, (iv) ifany;
- the Trust
Preferred Securities (including any Successor Securities) are rated by any
nationally recognized statistical rating organization prior to such transaction,
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Trust Securities (including any Successor Securities)
or, if the Junior Subordinated Debentures are so rated, the Junior Subordinated
Debentures, to be downgraded by any such nationally recognized statistical
rating organization, (v) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges
of the holders of the Trust Securitiespreferred securities (including any Successor
Securities)successor
securities) in any material respect, (vi) suchrespect;
- the successor entity has a purpose substantially identical to that of the
Trust, (vii)trust;
- prior to suchthe merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, the CorporationIndependent has received an opinion from independent
counsel to the Trust experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or leaseany transaction of this kind does not adversely affect
the rights, preferences and privileges of the holders of the Trust Securitiespreferred
securities (including any Successor Securities)successor securities) in any material respect,
(other than any dilution of such
holders' interests in the new entity), and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease,the transaction, neither the Trusttrust nor suchthe successor
entity will be required to register as an investment company"investment company" under the
Investment Company Act of 1940, as amended (the
"Investment Company Act"),Act; and
(viii) the Corporation or any permitted successor
or assignee- Independent owns all of the common securities of suchthe successor entity and
guaranteesguarantee the obligations of suchthe successor entity under 45
the Successor Securitiessuccessor
securities at least to the extent provided by the Guarantee.guarantee, the
debentures and the trust agreement.
Notwithstanding the foregoing, the Trust shalltrust may not, except with the consent of
holders of 100% in Liquidation Amountevery holder of the Trust Securities, consolidate,
amalgamate, merge with orpreferred securities, enter into or be replaced by or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to, any other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace ittransaction of this
kind if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or leasethe transaction would cause the Trusttrust or the successor entity not to be
classified as a grantor trust for United States federal income tax purposes.
Voting Rights; Amendment of the Trust AgreementVOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provideddescribed below and under "--Mergers, Consolidations,
Amalgamations or Replacements"Description of the
Trust" and "Description of
Guarantee--Amendments and Assignment"Guarantee--Amendments" on page 44 and as otherwise required by lawthe Trust
Indenture Act and the Trust Agreement,trust agreement, the holders of the Trust Preferred Securitiespreferred securities
will have no voting rights. The Trust Agreementtrust agreement may be amended from time to time
by the Corporation,
the Property TrusteeIndependent and the Administrative Trustees,administrative trustees, without the consent of the
holders of the Trust Securities (i)preferred securities, in the following circumstances:
- with respect to acceptance of appointment by a successor trustee;
- to cure any ambiguity, correct or supplement any provisions in the Trust Agreementtrust
agreement that may be inconsistent with any other provision, or to make
any other provisions with respect to matters or questions arising under
the Trust Agreement, which shalltrust agreement, as long as the amendment is not be inconsistent with the
other provisions of the Trust Agreement, or (ii)trust agreement and does not have a material
adverse effect on the interests of any holder of trust securities; and
- to modify, eliminate or add to any provisions of the Trust Agreement to such extent as shall betrust agreement if
necessary to ensure that the Trusttrust will be classified for United States federal income
tax purposes as a grantor trust at all times that any Trust Securitiestrust securities are
outstanding or to ensure that the Trusttrust will not be required to register
as an "investment company" under the Investment Company Act; provided, however, that
such action shall not adversely affect in any material respectAct.
With the interestsconsent of the holders of the Trust Securities. Any amendmentsa majority of the Trust Agreement
pursuant to the foregoing shall become effective when notice thereof is given to
the holders of the Trust Securities. The Trust Agreement may be amended by the
Issuer Trustees and the Corporation (i) with the consent of holders representing
a majority (based upon Liquidation Amount)aggregate liquidation
amount of the outstanding Trust Securitiestrust securities, Independent and (ii) upon receipt by the Issuer Trustees ofadministrative
trustees may amend the trust agreement if the trustees receive an opinion of
independent tax counsel experienced in such matters to the effect that suchthe
amendment or the exercise of any power granted to the Issuer Trusteestrustees in accordance
with suchthe amendment will not affect the Trust'strust's status as a grantor trust for
United States federal income tax purposes or the Trust'strust's exemption from status as an
"investment company" under the Investment Company Act, provided that,Act.
27
However, without the consent of each holder of Trust Securities,trust securities, the Trust Agreementtrust
agreement may not be amended to (i)(a) change the amount or timing of any
Distributiondistribution on the Trust Securities or
reduce the amount payable on redemption thereoftrust securities or otherwise adversely affect the amount of
any Distributiondistribution required to be made in respect of the Trust
Securitiestrust securities as of a
specified date, or (ii)(b) restrict the right of a holder of Trust Securitiestrust securities to
institute suit for the enforcement of any suchthe payment on or after suchthat date.
SoAs long as the property trustee holds any Junior Subordinated Debentures are held bydebentures, the Property
Trustee,trustees will not,
without obtaining the Issuer Trustees shall not (i)prior approval of the holders of a majority in aggregate
liquidation amount of all outstanding preferred securities:
- direct the time, method and place of conducting any proceeding for 46
any
remedy available to the Debenture Trustee,indenture trustee, or executeexecuting any trust or power
conferred on the Property Trusteeproperty trustee with respect to the Junior Subordinated
Debentures, (ii)debentures;
- waive certainany past defaultsdefault that is waivable under the Indenture, (iii)indenture;
- exercise any right to rescind or annul a declaration of acceleration of the maturity ofthat the principal of
all the Junior Subordinated Debenturesdebentures will be due and payable; or
(iv)- consent to any amendment modification or termination of the Indentureindenture or the
Junior
Subordinated Debentures,debentures, where suchthe property trustee's consent shall be required, without, in each
case, obtaining the prior approval of the holders of a majority in Liquidation
Amount of all outstanding Trust Preferred Securities; provided, however, thatis required. However,
where a consent under the Indenture would requireindenture requires the consent of each holder of
Junior Subordinated Debenturesthe affected thereby,debentures, no such consent shallwill be given by the Property Trusteeproperty trustee
without the prior approvalconsent of each holder of the Trust
Preferred Securities.preferred securities.
The Issuer Trustees shalltrustees may not revoke any action previously authorized or approved by
a vote of the holders of the Trust Preferred
Securitiespreferred securities except by subsequent vote of
such holders.the holders of the preferred securities. The Property Trustee shallproperty trustee will notify each
holder of Trust Preferred Securitiespreferred securities of any notice of default with respect to the
Junior Subordinated Debentures.debentures. In addition to obtaining the foregoing approvals of suchthe holders of
the Trust Preferred Securities,preferred securities, prior to taking any of the foregoing actions, the
Issuer Trustees shalltrustees must obtain an opinion of counsel experienced in suchthese matters to the
effect that the Trusttrust will not be classified as an association taxable as a
corporation for United States federal income tax purposes on account of suchthe action.
Any required approval of holders of Trust Preferred Securitiestrust securities may be given at a
meeting of such holders convened for such purpose or pursuant toby written consent. The Property Trusteeproperty trustee will cause a notice of any
meeting at which holders of Trust Preferred Securitiesthe trust securities are entitled to vote, or of any
matter upon which action by written consent of suchthe holders is to be taken, to be
given to each holder of record of Trust Preferred Securities in the manner set forth
in the Trust Agreement.trust securities.
No vote or consent of the holders of Trust Preferred Securitiespreferred securities will be required
for the Trusttrust to redeem and cancel the Trust Preferred Securitiesits preferred securities in accordance with
the Trust Agreement.trust agreement.
Notwithstanding the fact that holders of the Trust Preferred Securitiespreferred securities are entitled
to vote or consent under any of the circumstances described above, any of the
Trust Preferred Securitiespreferred securities that are owned by Independent, the Corporation, the Trusteestrustees or any
affiliate of the CorporationIndependent or any Trustees, shall,trustee, will, for purposes of suchthe vote or
consent, be treated as if they were not outstanding.
Global Trust Preferred SecuritiesGLOBAL PREFERRED SECURITIES
The Trust Preferred Securitiespreferred securities will be represented by one or more global certificatespreferred
securities registered in the name of theThe Depository Trust Company, New York, New
York, referred to below as DTC, or its nominee ("Global
Trust Preferred Security"). Beneficialnominee. A global preferred security is a
security representing interests of more than one beneficial holder. Ownership of
beneficial interests in the Trust Preferred
Securitiesglobal preferred securities will be reflected in DTC
participant account records through DTC's book-entry transfer and registration
system. Participants are brokers, dealers, or others having accounts with DTC.
Indirect beneficial interests of other persons investing in the preferred
securities will be shown on, and transfer thereoftransfers will be effected only through,
records maintained by persons that have accounts with such Depositary
("Participants").DTC participants. Except as described below, Trust Preferred Securitiespreferred
securities in the
certificateddefinitive form will not be issued in exchange for the global
certificates.
See "Book-Entry Issuance."
47preferred securities.
28
ANo global preferred security shallmay be exchangeableexchanged for Trust Preferred Securitiespreferred securities
registered in the names of persons other than the DepositaryDTC or its nominee only
if (i) the Depositaryunless:
- DTC notifies the Corporationindenture trustee that it is unwilling or unable to
continue as a depositary for suchthe global preferred security and noIndependent
is unable to locate a qualified successor depositary
shall have been appointed,depositary;
- Independent executes and delivers to the indenture trustee a written order
stating that Independent elects to terminate the book-entry system through
DTC; or
if at any time the Depositary ceases to be a
clearing agency registered under the Exchange Act, at a time when the Depository
is required to be so registered to act as such depository, (ii) the Trust in its
sole discretion determines that such global security shall be so exchangeable,
or (iii)- there shall have occurred and be continuing an Eventevent of Defaultdefault under the
Indenture.indenture.
Any global preferred security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for definitive certificates registered in suchthe
names as the DepositaryDTC shall direct. It is expected that suchthe instructions will be based
upon directions received by the DepositaryDTC with respect to ownership of beneficial
interests in suchthe global preferred security. In the
event that Trust Preferred SecuritiesIf preferred securities are issued
in definitive form, such Trust
Preferred Securitiesthe preferred securities will be in denominations of $25 and
integral multiples thereofof $25 and may be transferred or exchanged at the offices
described below.
Unless and until it is exchanged in whole or in part for the individual
Trust Preferred Securitiespreferred securities represented thereby, a Global Trust Preferred
Securityglobal preferred security may not be
transferred except as a whole by the DepositaryDTC to a nominee of such Depositary orDTC, by a nominee of such DepositaryDTC to
such DepositaryDTC or another nominee of such DepositaryDTC or by the DepositaryDTC or any nominee to a successor Depositarydepositary
or any nominee of suchthe successor.
Payments on Trust Preferred Securities represented by a global securitypreferred securities will be made to the Depositary,DTC, as the
depositary for the Trust Preferred
Securities. Inglobal preferred securities. If the event the Trust Preferred Securitiespreferred securities are
issued in definitive form, Distributionsdistributions will be payable by check mailed to the
address of record of the persons entitled to the distribution, and the transfer
of the Trust Preferred
Securitiespreferred securities will be registrable, and Trust Preferred Securitiespreferred securities will
be exchangeable for Trust Preferred Securitiespreferred securities of other denominations of a like
aggregate Liquidation Amount,liquidation amount, at the corporate office of the Property Trustee,property trustee,
or at the offices of any paying agent or transfer agent appointed by the
Administrative Trustees by check mailed toadministrative trustees. In addition, if the addresspreferred securities are issued in
definitive form, the record dates for payment of distributions will be the 15th
day of the persons entitled
thereto or by wire transfer.month in which the relevant distribution date occurs. For a
description of the terms of the depositaryDTC arrangements relating to payments, transfers,
voting rights, redemptions and other notices and other manners,matters, see "Book-Entry
Issuance."Issuance" on page 41.
Upon the issuance of a Global Trust Preferred Security,one or more global preferred securities, and the
deposit of such Global Trust Preferred Securitythe global preferred security with or on behalf of the Depositary, the
Depositary for such Global Trust Preferred SecurityDTC or its
nominee, DTC or its nominee will credit, on its book-entry registration and
transfer system, the respective aggregate Liquidation Amountsliquidation amounts of the individual
Trust Preferred Securitiespreferred securities represented by such Global Trust Preferred Securitiesthe global preferred security to the
designated accounts of Participants. Suchpersons that participate in the DTC system. These
participant accounts shallwill be designated by the dealers, underwriters or agents
with respect
to such Trust Preferred Securities.selling the preferred securities. Ownership of beneficial interests in a Global Trust Preferred Securityglobal
preferred security will be limited to Participantspersons or persons thatentities having an account with
DTC or who may hold interests through Participants. Ownershipparticipants. With respect to interests of
any person or entity that is a DTC participant, ownership of beneficial
interests in such Global Trust Preferred Securitya global preferred security will be shown on, and the transfer of
that ownership will be effected only through, records maintained by the applicable
DepositaryDTC or its
nominee (withnominee. With respect to interests of Participants) and the
records of Participants (with respect to interests of persons or entities who hold interests in a global
preferred security through Participants).a participant, the interest and any transfer of the
interest will be shown only on the participant's records. The laws of some
states require that
48
certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and suchThese laws may impair the ability to transfer
beneficial interestinterests in a Global Trust Preferred Security.global preferred security.
So long as the Depositary for a Global Trust Preferred Security,DTC or another depositary, or its nominee, is the registered
owner of such Global Trust Preferred Security, such
Depositarythe global preferred security, the depositary or suchthe nominee, as the
case may be, will be considered the sole owner or holder of the Trust Preferred Securitiespreferred
securities represented by such Global
Trust Preferred Securitythe global preferred security for all purposes under
the Trust Agreement governing
such Trust Preferred Securities.trust agreement. Except as provided below,described in this prospectus, owners of
beneficial interestinterests in a Global Trust Preferred Securityglobal
29
preferred security will not be entitled to have any of the individual Trust Preferred Securitiespreferred
securities represented by such Global Trust
Preferred Securitythe global preferred security registered in their
names, will not receive or be entitled to receive physical delivery of any such Trust Preferred Securitiesthe
preferred securities in definitive form and will not be considered the owners or
holders thereofof the preferred securities under the Trust
Agreement.trust agreement.
None of Independent, the Corporation, the Property Trustee,property trustee, any Paying Agent (as defined
below),paying agent or the
Securities Registrar (defined below)securities registrar for such Trust Preferred
Securitiesthe preferred securities will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Global Trust Preferred Securityglobal preferred security
representing such Trust
Preferred Securitiesthe preferred securities or for maintaining, supervising or
reviewing any records relating to suchthe beneficial ownership interests.
The CorporationIndependent expects that the Depositary for Trust Preferred SecuritiesDTC or its nominee, upon receipt of any payment of
the Liquidation Amountliquidation amount or Distributionsdistributions in respect of a permanent Global Trust Preferred Securityglobal preferred
security, immediately will credit Participants'participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the aggregate
Liquidation Amountliquidation amount of such Global Trust Preferred Securitythe global preferred security as shown on the records of
such DepositaryDTC or its nominee. The CorporationIndependent also expects that payments by Participantsparticipants to
owners of beneficial interests in such Global Trust
Preferred Securitythe global preferred security held through such Participantsthe
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." SuchThe payments will be the responsibility of
such Participants.
If the Depositary for the Trust Preferred Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Corporation within 90 days, the Trust will
issue individual Trust Preferred Securities in exchange for the Global Trust
Preferred Security. In addition, the Trust may at any time and in its sole
discretion, subject to any limitations described herein relating to such Trust
Preferred Securities, determine not to have any Trust Preferred Securities
represented by one or more Global Trust Preferred Securities and, in such event,
will issue individual Trust Preferred Securities in exchange for the Global
Trust Preferred Security or Securities representing the Trust Preferred
Securities. Further, if the Trust so specifies with respect to the Trust
Preferred Securities, an owner of a beneficial interest in a Global Trust
Preferred Security representing the Trust Preferred Securities may, on terms
acceptable to the Trust, the Property Trustee and the Depositary for such Global
Trust
49
Preferred Security, receive individual Trust Preferred Securities in exchange
for such beneficial interests, subject to any limitations described herein. In
any such instance, an owner of a beneficial interest in a Global Trust Preferred
Security will be entitled to physical delivery of individual Trust Preferred
Securities represented by such Global Trust Preferred Security equal in
Liquidation Amount to such beneficial interest and to have such Trust Preferred
Securities registered in its name. Individual Trust Preferred Securities so
issued will be issued in denominations, unless otherwise specified by the
Corporation, of $25 and integral multiples thereof.
Payment and Paying Agencyparticipants.
PAYMENT AND PAYING AGENCY
Payments in respect of the Trust Preferred Securities held in global form
shallpreferred securities will be made to the Depositary,DTC, which
shallwill credit the relevant accounts at the
Depositaryof participants on the applicable Distribution Dates,distribution
dates, or, in respectif any of the Trust
Preferred Securities thatpreferred securities are not held by DTC, the Depositary, such payments
shallwill be made by check mailed to the address of the holder entitled thereto as such
address shall appearlisted on the
register.register of holders of the preferred securities. The paying agent (the "Paying Agent")
shallfor the
preferred securities will initially be the Property Trusteeproperty trustee and any co-paying
agent chosen by the Property Trusteeproperty trustee and acceptable to the Administrative TrusteesIndependent and the
Corporation.administrative trustees. The Paying Agent shall be permitted topaying agent for the preferred securities may
resign as Paying Agentpaying agent upon 30 days'days written notice to the Property Trustee,administrative
trustees, the Administrative Trusteesproperty trustee and Independent. If the Corporation. In the event that the Property Trustee shallproperty trustee no
longer beis the Paying Agent,paying agent for the Administrative Trustees shallpreferred securities, the administrative
trustees will appoint a successor (which shallto act as paying agent. The successor must be
a bank or trust company acceptable to the Administrative TrusteesIndependent and the Corporation) to act as Paying Agent.
Registrar and Transfer Agentproperty trustee.
REGISTRAR AND TRANSFER AGENT
The Property Trusteeproperty trustee will act as the registrar and the transfer agent for
the Trust
Preferred Securities.preferred securities. Registration of transfers of the Trust Preferred
Securitiespreferred securities will
be effected without charge by or on behalf of the Trust,trust, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trusttrust and its registrar and transfer agent will not be
required to register or cause to be registered the transfer of the Trust Preferred
Securitiespreferred
securities after they have been called for redemption.
Information Concerning the Property TrusteeINFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default,property trustee undertakes to perform only suchthe duties as are specifically set forth in the
Trust Agreement and, duringtrust agreement. After the existenceoccurrence of an Eventevent of Default,default that is continuing,
the property trustee must exercise the same degree of care and skill as a
prudent person would exerciseexercises or useuses in the conduct of his or herits own affairs. Subject to this
provision, the Property TrusteeThe property
trustee is under no obligation to exercise any of the powers vested in it by the
Trust Agreementtrust agreement at the request of any holder of Trust
Securitiespreferred securities unless it
is offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.incurred. If no Eventevent of Defaultdefault under the trust agreement has occurred
and is continuing and the Property Trusteeproperty trustee is required to decide between
alternative causes of action, construe ambiguous or inconsistent provisions in
the 50
Trust Agreementtrust agreement or is unsure of the application of any provision of the
Trust
Agreement,trust agreement, and the matter is not one on which holders of
the Trust Securities30
preferred securities are entitled under the Trust Agreement to vote upon, then the Property Trustee shallproperty trustee will
take suchthe action asdirected in writing by Independent. If the property trustee is directed by the Corporation and, if
not so directed, shallthen it will take suchthe action as it deems advisable and in the best
interests of the holders of the Trust Securitiestrust securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
MiscellaneousMISCELLANEOUS
The Administrative Trusteesadministrative trustees are authorized and directed to conduct the
affairs of and to operate the Trusttrust in such a way thatthat:
- the Trusttrust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act orAct;
- the trust will not be classified as an association taxable as a
corporation for United States federal income tax purposespurposes; and
so that- the Junior
Subordinated Debenturesdebentures will be treated as Independent's indebtedness of the Corporation for
United States federal
income tax purposes.
In this connection, the Corporationregard, Independent and the Administrative Trusteesadministrative trustees are authorized
to take any action not inconsistent with applicable law, the certificate of
trust of the Trust or the Trust Agreement,trust agreement, that the CorporationIndependent and the Administrative Trusteesadministrative trustees
determine
in their discretion to be necessary or desirable for such purposes, as long as
such action does not materially adversely affectthese purposes.
The administrative trustees may assist in listing the interests ofpreferred securities
on the holders of
the Trust Securities.Nasdaq National Market or a national securities exchange.
Holders of the Trust Securitiespreferred securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge any
of its assets.
51trust agreement and the trust securities will be governed by Delaware law.
31
DESCRIPTION OF JUNIOR SUBORDINATEDTHE DEBENTURES
CONCURRENTLY WITH THE ISSUANCE OF THE PREFERRED SECURITIES, THE TRUST WILL
INVEST THE PROCEEDS FROM THE SALE OF THE TRUST SECURITIES IN THE DEBENTURES
ISSUED BY INDEPENDENT. THE DEBENTURES WILL BE ISSUED AS UNSECURED DEBT UNDER THE
INDENTURE BETWEEN INDEPENDENT AND THE BANK OF NEW YORK, AS INDENTURE TRUSTEE.
THE INDENTURE WILL BE QUALIFIED UNDER THE TRUST INDENTURE ACT.
THE FOLLOWING DISCUSSION CONTAINS A DESCRIPTION OF THE MATERIAL PROVISIONS
OF THE DEBENTURES AND IS SUBJECT TO, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO, THE INDENTURE AND TO THE TRUST INDENTURE ACT. INDEPENDENT URGES
PROSPECTIVE INVESTORS TO READ THE FORM OF THE INDENTURE, WHICH IS FILED AS AN
EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS FORMS A PART.
GENERAL
The Junior Subordinated Debentures are to be issued under an Indenture, as
supplemented from time to time (as so supplemented, the "Indenture"), between
the Corporation and The Bank of New York, as trustee (the "Debenture Trustee").
The Indenturedebentures will be qualified underlimited in aggregate principal amount to $25,773,200.
This amount represents the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). This summary of certain terms and
provisionssum of the Junior Subordinated Debentures and the Indenture does not
purport to be complete, and where reference is made to particular provisionsaggregate stated liquidation amounts of
the Indenture, such provisions, including the definitions of certain terms, some
of which are not otherwise defined herein, are qualified in their entirety by
reference to all of the provisions of the Indenture and those terms made a part
of the Indenture by the Trust Indenture Act.trust securities. The form of the Indenture has been
filed as an Exhibit to the Registration Statement.
Concurrently with the issuance of the Trust Preferred Securities, the Trust
will invest the proceeds thereof, together with the consideration paid by the
Corporation for the Common Securities, in Junior Subordinated Debentures issued
by the Corporation. The Junior Subordinated Debentures will be issued as
unsecured debt under the Indenture.
General
The Junior Subordinated Debenturesdebentures will bear interest at the annual rate of
____%% of the principal amount thereof,amount. The interest will be payable quarterly in arrears on
the __
day of March 31, June 30, September 30 and December 31 of each year, (each, an "Interest
Payment Date"), commencing ___________, 1997,beginning
March 31, 2002, to the person in whose name each Junior Subordinated Debenturedebenture is registered subject to certain exceptions,at the
close of business on the [first15th day of the month/fifteenth daylast month of the month immediately preceding the
month] in which the relevant Interest Payment Date occurs. Notwithstanding the
above, in the event that either (i) Junior Subordinated Debentures are held by
the Property Trustee and the Trust Preferred Securities are no longer in
book-entry only form or (ii) the Junior Subordinated Debentures are not
represented by a Global Subordinated Debenture (as defined herein), the record
date for such payment shall be the first day of the month in which such payment
is made. The amount of each interest payment due with respect to the Junior
Subordinated Debentures will include amounts accrued through the date the
interest payment is due.calendar quarter. It
is anticipated that, until the liquidation, if any, of the Trust, each Junior Subordinated Debenturetrust, the debentures
will be held in the name of the Property Trusteeproperty trustee in trust for the benefit of the
holders of the Trust Preferred
Securities.trust securities.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and, for any period of less
than a full calendar month, the number of days elapsed in such month. In the
event thatmonths. If any date on which interest is
payable on the Junior Subordinated
Debenturesdebentures is not a Business Day,business day, then payment of the interest payable on such
date will
be made on the next succeeding day that is a Business Day (andbusiness day without any additional interest
or other payment in respect of any such delay), except thatthe delay. However, if suchthe next succeeding Business Day fallsbusiness day is
in the next succeeding calendar year, then
such payment shallof interest will be made on the immediately
preceding Business Day, in each
case with the same force and effect as if made on such date.business day. Accrued interest that is not paid on the applicable
Interest Payment Dateinterest payment date will bear additional interest on the amount thereof (to the extent permitted by law)due at the
annual rate per
annum of _____%
52
thereof,%, compounded quarterly.
The term "interest," as used herein, shall
include quarterly interest payments, interest on quarterly interest payments not
paid on the applicable Interest Payment Date and Additional Sums (as defined
below), as applicable.
The Junior Subordinated Debenturesdebentures will mature on , 2027 (such2031, the stated maturity date.
Independent may shorten this date as it
may be shortened as hereinafter described, the "Stated Maturity Date"). Such
date may be shortened once at any time by the Corporation to any date not earlier than
, 20022006, subject to the Corporation having received prior approval of the Federal Reserve, if
then required under applicable capital guidelines or
policies of the Federal Reserve. In the event that the Corporation elects to
shorten the Stated Maturity Date of the Junior Subordinated Debentures, it shallrequired. Independent will give notice to the Indenture Trustee,indenture trustee and the Indenture Trustee shall give
notice of such shortening to the holders
of the Junior Subordinated Debenturesdebentures, no more than 180 days and no less than 9030 days prior to the
effectiveness thereof.of any change in the stated maturity date. Independent will not
have the right to redeem the debentures from the trust until after ,
2006, except if (a) a Tax Event, an Investment Company Event or a Capital
Treatment Event, which terms are defined on page 22, has occurred, or
(b) Independent repurchases preferred securities in the market, in which case
Independent can elect to redeem debentures specifically in exchange for a like
amount of preferred securities owned by it plus a proportionate amount of common
securities.
The Junior Subordinated Debentures will rank pari passu with all Other
Debentures anddebentures will be unsecured and will rank subordinate and junior in right
of payment to all Seniorof
Independent's senior and Subordinated Indebtedness to the extent andsubordinated debt, including indebtedness it may incur
in the manner set forth in the Indenture. See "-- Subordination."
The Corporationfuture. Because Independent is a holding company, and almost all of the operating assets
of the Corporation are owned by the Corporation's subsidiary. The Corporation is
a legal entity separate and distinct from its subsidiary. Holders of Junior
Subordinated Debentures should look only to the Corporation for payments on the
Junior Subordinated Debentures. The principal sources of the Corporation's
income are dividends, interest and fees from its subsidiary. The Corporation
relies primarily on dividends from the Bank to meet its obligations for payment
of principal and interest on its corporate expenses. There are regulatory
limitations on the payment of dividends directly or indirectly to the
Corporation from the Bank. As of December 31, 1996, under applicable banking
statutes and the Bank's dividend policy, the total capital available for payment
of dividends by the Bank to the Corporation was approximately $24 million.
However, banking regulatory authorities have the power to prohibit any act,
including the payment of dividends, if such act would reduce bank capital to a
point that, in the opinion of such regulatory authorities, would render the Bank
undercapitalized and thus constitute an unsafe or unsound banking practice. In
addition, the Bank is subject to certain restrictions imposed by federal law on
any extensions of credit to, and certain other transactions with, the
Corporation and certain other affiliates, and on investments in stock or other
securities thereof. Such restrictions prevent the Corporation and such other
affiliates from borrowing from the Bank unless the loans are secured by various
types of collateral. Further, such secured loans, other transactions and
investments by the Bank is generally limited in amount as to the Corporation and
as to each of such other affiliates to 10% of the Bank's capital and surplus and
as to the Corporation and all of such other affiliates to an aggregate of 20% of
the Bank's capital and surplus.
Because the Corporation is a holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiaryof its subsidiaries, upon suchany
subsidiary's liquidation or reorganization or otherwise, (andand thus the ability of
holders of the Trust Preferred Securitiesdebentures to benefit indirectly 53
from such distribution),any distribution by a
subsidiary, is subject to the prior claimsclaim of creditors of thatthe subsidiary, (including depositors, in the case of the Bank), except
to the extent the Corporationthat Independent may itself be recognized as a creditor of thatthe
subsidiary. At
December 31, 1996, the subsidiary of the Corporation had total liabilities
(excluding liabilities owed to the Corporation) of $1.0 billion. Accordingly,
the Junior Subordinated DebenturesThe debentures will, therefore, be effectively subordinated to all
existing and future liabilities of the Corporation's subsidiaryIndependent's subsidiaries, and all
liabilitiesholders of
any future subsidiaries of the Corporation.debentures should look only to Independent's assets for payment. The Indentureindenture
does not limit the incurrenceIndependent's ability to incur or issuance of otherissue secured or unsecured
debtsenior and junior debt.
32
Except in limited circumstances, the indenture does not contain provisions
that afford holders of the Corporationdebentures protection in the event of a highly
leveraged transaction or other similar transaction involving Independent, nor is
Independent required to maintain or achieve any subsidiary, including Senior and Subordinated Indebtedness.
See "--Subordination."
Optionfinancial performance levels or
to Extend Interest Payment Date
Soobtain or maintain any credit rating on the debentures.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
As long as no Debenture Eventevent of Defaultdefault under the indenture has occurred and is
continuing, the Corporation will haveIndependent has the right under the Indentureindenture to defer the payment
of interest on the Junior Subordinated Debenturesdebentures at any time and from time to time for a period not exceeding 20
consecutive quarterly periods with respect to each
Extension Period, provided thatquarters. However, no Extension Period shallextension period may extend beyond the stated
maturity of the debentures or end on a date other than an Interest Payment Date or extend beyond the Stated Maturity Date.a date interest is
normally due. At the end of such Extension Period, the Corporationan extension period, Independent must pay all
interest then accrued and unpaid, (togethertogether with interest thereon at the annual
rate of _____%,%, compounded quarterly, to the extent permitted by applicable law.quarterly. During an Extension Period,extension period, interest will
continue to accrue and if the Junior
Subordinated Debentures have been distributed to holders of debentures, or the Trust Preferred
Securities, holders of Junior Subordinated Debentures (or holders of the Trust
Preferred Securities while Trust Preferred Securitiespreferred
securities if they are outstanding)then outstanding, will be required to accrue such deferred interestand
recognize as income for United States federal income tax purposes prior to the receipt of cash attributable toaccrued but unpaid
interest amounts in the year in which such income.amounts accrued. See "Certain"Material
Federal Income Tax Consequences--Interest IncomePayment Period and Original Issue
Discount."
DuringDiscount" on page 47.
Prior to the termination of any such Extension Period,extension period, so long as no event of
default under the Corporationindenture is continuing, Independent may further defer the
payment of interest subject to the above stated requirements. Upon the
termination of any extension period and the payment of all amounts then due,
Independent may elect to begin a new extension period at any time. Independent
does not (i)currently intend to exercise its right to defer payments of interest on
the debentures.
Independent must give the property trustee, the administrative trustees and
the indenture trustee notice of its election of an extension period at least two
business days prior to the earlier of (a) the next date on which distributions
on the trust securities would have been payable except for the election to begin
an extension period, or (b) the date Independent is required to give notice of
the record date, or the date the distributions are payable, to the Nasdaq
National Market, or other applicable self-regulatory organization, or to holders
of the preferred securities, but in any event at least one business day prior to
the record date. If the property trustee is not the only registered holder of
the debentures, then the notice must also be given to the other holders of the
debentures.
Other than as described above, there is no limitation on the number of times
that Independent may elect to begin an extension period.
RESTRICTIONS ON PAYMENTS
Independent is restricted from making certain payments (as described below)
if it has chosen to defer payment of interest on the debentures, if an event of
default has occurred and is continuing under the indenture, or if Independent is
in default with respect to its obligations under the guarantee.
If any of these events occur, Independent will not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Corporation'sits capital
stock (ii)(other than stock dividends, non-cash dividends in connection with
the implementation of a shareholder rights plan, purchases of common stock
in connection with employee benefit plans or in connection with the
reclassification of any class of its capital stock into another class of
capital stock) or allow any of its subsidiaries to do the same with
respect to their capital stock (other than payment of dividends or
distributions to itself);
- make or allow any of its subsidiaries to make any payment of principal,
of, interest or premium if any, on, or repay or repurchase or redeem any of its debt
securities of the Corporation (including any Other
Debentures) that rank pari passuequally with or junior in right of payment to the Junior Subordinated Debenturesdebentures;
33
- make or (iii)allow any of its subsidiaries to make any guarantee payments with
respect to any guarantee by the Corporationit of the debt securities of any subsidiary of the Corporation (including any Other Guarantees)its
subsidiaries if suchthe guarantee ranks pari
passuequally with or junior in right of payment to the
Junior Subordinated Debenturesdebentures (other than (a) dividends or distributions in shares of, or options, warrants or
rights to subscribe for or purchase shares of, common stock of the Corporation,
(b) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c) payments under the Guarantee, (d)guarantee relating to the
preferred securities); or
- redeem, purchase of fractional shares resulting
from a reclassificationor acquire less than all of the Corporation's capital stock, (e) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, and (f) purchases of common stock related to the
issuance of common stock or rights
54
under any of the Corporation's benefit plans for its directors, officers or
employeesdebentures or any of the
Corporation's dividend reinvestment plans).
Prior topreferred securities.
ADDITIONAL SUMS TO BE PAID AS A RESULT OF ADDITIONAL TAXES
If the termination of any such Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 20 consecutive quarterly periods, end on a
date other than an Interest Payment Date or extend beyond the Stated Maturity
Date. Upon the termination of any such Extension Period and the payment of all
amounts then due on any Interest Payment Date, the Corporation may elect to
begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Corporation must give the Property Trustee, the Administrative Trustees and
the Debenture Trustee notice of its election of any Extension Period (or an
extension thereof) at least one Business Day prior to the earlier of (i) the
date the Distributions on the Trust Preferred Securities would have been payable
except for the election to begin or extend such Extension Period or (ii) the
date the Administrative Trustees are required to give notice to any securities
exchange or to holders of Trust Preferred Securities of the record datetrust or the date such Distributions are payable, but in any event not less than one Business
Day prior to such record date. The Debenture Trustee shall give notice of the
Corporation's election to begin or extend a new Extension Period to the holders
of the Trust Preferred Securities. There is no limitation on the number of times
that the Corporation may elect to begin an Extension Period.
Additional Sums
If the Trustproperty trustee is required to pay any additional
taxes, duties, assessments or other governmental charges as a result of the
occurrence of a Tax Event, the CorporationIndependent will pay as additional amountsinterest on the
Junior Subordinated Debentures suchdebentures any amounts ("Additional Sums") as shallwhich may be required so that the Distributions payablenet amounts received
and retained by the Trust shall not be reduced as a result oftrust after paying any such additional taxes, duties, assessments
or other governmental charges.
Redemptioncharges will not be less than the amounts the trust and
the property trustee would have received had the additional taxes, duties,
assessments or other governmental charges not been imposed.
REDEMPTION
Subject to the Corporation having received prior approval of the Federal Reserve, if then required, under applicable capital guidelines or policies ofIndependent
may redeem the Federal Reserve, the Junior Subordinated Debentures are redeemabledebentures prior to maturity at the option of the Corporation (i)maturity:
- on or after , 2002,2006, in whole at any time or in part from time
to time,time; or
(ii)- in whole but not in part at any time in whole (but not in
part), uponwithin 180 days following the
occurrence and during the continuance of a SpecialTax Event, in
each casean Investment Company Event or a Capital
Treatment Event; or
- at any time, so long as a partial redemption would not cause the preferred
securities to be delisted from the Nasdaq National Market, and from time
to time, to the extent of any preferred securities purchased by
Independent, plus a proportionate amount of the common securities held by
Independent.
With respect to the first two circumstances listed above, Independent will
pay a redemption price equal to the accrued and unpaid interest on the
Junior Subordinated Debenturesdebentures so redeemed to the date fixed for redemption, plus 100% of the
principal amount thereof.of the redeemed debentures. With respect to the third
circumstance listed above, the redemption price shall be the principal amount
equal to (i) the liquidation amount of the preferred securities owned by
Independent, plus (ii) the liquidation amount of a proportionate amount of the
trusts' common securities owned by Independent with respect to the preferred
securities so redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Junior Subordinated
Debenturesdebentures to be redeemed
at such holder'sits registered address. Redemption of less than all outstanding debentures
must be effected proportionately, by lot or in any other manner deemed to be
fair and appropriate by the indenture trustee. Unless the
CorporationIndependent defaults in
paymentspayment of the redemption price 55
for the debentures, on and after the redemption
date, interest ceases towill no longer accrue on such Junior
Subordinated Debenturesthe debentures or the portions thereofof the
debentures called for redemption. If the Trust is required to pay additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Junior Subordinated Debentures the Additional Sums.
The Junior Subordinated Debenturesdebentures will not be subject to any
sinking fund.
Distribution upon LiquidationDISTRIBUTION UPON LIQUIDATION
As described under "Description of the Trust Preferred Securities--Liquidation
Distribution Upon Termination,"Dissolution" on page 24, under certain circumstances involvingand with
the termination ofFederal Reserve's approval, the Trust, the Junior Subordinated
Debenturesdebentures may be distributed to the holders
of the Trust Preferred Securitiespreferred securities in liquidation of the Trusttrust after satisfaction of
liabilities to creditors of the Trust as provided by applicable law.trust. If distributed to holders of the Trust
Preferred Securities in liquidation, the Junior Subordinated Debentures will
initially be issued in the form of one or more global securities and the
Depositary or any successor depositary for the Trust Preferred Securities, will
act as depositary for the Junior Subordinated Debentures. It is anticipated that
the depositary arrangements for the Junior Subordinated Debentures would be
substantially identical to those in effect for the Trust Preferred Securities.
If the Junior Subordinated Debentures are distributed to the holders of Trust
Preferred Securities upon the liquidation of the Trust, the Corporationthis occurs, Independent will use its
best efforts to list the Junior Subordinated Debenturesdebentures on the Nasdaq National Market or such other
stock exchangesnational securities exchange or automatednational quotation system if
any, on which the Trust Preferred Securitiespreferred
securities are then listed, or quoted. There
can be no assuranceif any. Independent cannot assure
34
you as to the market price of any Junior Subordinated Debenturesdebentures that may be distributed to the
holders of Trust Preferred Securities.
Certain Covenants of the Corporation
If at any time (1) there shall have occurred any event of which the
Corporation has actual knowledge that (a) is, or with the giving of notice or
the lapse of time, or both, would be, a Debenture Event of Default and (b) in
respect of which the Corporation shall not have taken reasonable steps to cure,
(2) the Corporation shall be in default with respect to its payment of any
obligations under the Guarantee or (3) the Corporation shall have given notice
of its election of an Extension Period as provided in the Indenture and shall
not have rescinded such notice, and such Extension Period, or any extension
thereof, shall have commenced and be continuing, then the Corporation will not,
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Corporation's
capital stock, (ii) make any payment of principal, interest or premium, if any,
on or repay or repurchase or redeem any debt securities of the Corporation
(including Other Debentures) that rank pari passu with or junior in right of
payment to the Junior Subordinated Debentures or (iii) make any guarantee
payments with respect to any guarantee by the Corporation of the debt securities
of any subsidiary of the Corporation (including under Other Guarantees) if such
guarantee ranks pari
56
passu or junior in right of payment to the Junior Subordinated Debentures (other
than (a) dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of, common stock of the Corporation, (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Guarantee, (d) the purchase of fractional shares resulting
from a reclassification of the Corporation's capital stock, (e) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, and (f) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit plans
for its directors, officers or employees or any of the Corporation's dividend
reinvestment plans).
So long as the Trust Securities remain outstanding, the Corporation also
will covenant (i) to directly or indirectly maintain 100% direct or indirect
ownership of the Common Securities, provided, however, that any permitted
successor of the Corporation under the Indenture may succeed to the
Corporation's ownership of such Common Securities, (ii) to use its reasonable
efforts to cause the Trust (a) to remain a business trust, except in connection
with the distribution of Junior Subordinated Debentures to the holders of Trust
Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Trust Agreement, and (b) to otherwise continue to be
classified as a grantor trust for United States federal income tax purposes and
(iii) to use its reasonable efforts to cause each holder of Trust Securities to
be treated as owning an undivided beneficial interest in the Junior Subordinated
Debentures.
Subordination
In the Indenture, the Corporation has covenanted and agreed that any Junior
Subordinated Debentures issued thereunder will be subordinatepreferred securities.
SUBORDINATION
The debentures are subordinated and junior in right of payment to all Seniorof
Independent's senior and Subordinated Indebtedness to the extent
provided in the Indenture.subordinated debt, as defined below. Upon any payment
or distribution of assets to creditors upon any of Independent's liquidation,
dissolution, winding up or reorganization, assignment for the benefit of creditors, marshaling of assetswhether voluntary or anyinvoluntary in
bankruptcy, insolvency, debt restructuringreceivership or similarother proceedings in connection with any
insolvency or bankruptcy proceeding of the Corporation,proceedings, the holders of SeniorIndependent's senior and
Subordinated Indebtednesssubordinated debt will first be entitled to receive payment in full of principal
of all Allocable Amounts (as defined below) on such Senior and Subordinated Indebtednessinterest before the holders of Junior Subordinated Debentures
will be entitled to receive or retain any payment in respect thereof.
In the event of the acceleration of the maturity of Junior Subordinated
Debentures, the holders of all Senior and Subordinated Indebtedness outstanding
at the time of such acceleration will first be entitled to receive payment in
full of such amounts due thereon (including any amounts due upon acceleration)
before the holders of Junior Subordinated Debenturesdebentures will be entitled to receive or
retain any payment in respect of the Junior Subordinated Debentures.
57
debentures.
If the maturity of any debentures is accelerated because of Independent's
default under the indenture, the holders of all of Independent's senior and
subordinated debt outstanding at the time of the acceleration will also be
entitled to first receive payment in full of all amounts due to them, including
any amounts due upon acceleration, if any, before the holders of the debentures
will be entitled to receive or retain any principal or interest payments on the
debentures.
No payments on account of principal or interest if any, in respect ofon the Junior Subordinated Debenturesdebentures may be made if there
shall havehas occurred and beis continuing a default in any payment with respect to any Senior and Subordinated
Indebtedness,of
Independent's senior or subordinated debt or an event of default with respect to
any Senior and Subordinated
Indebtednessof Independent's senior or subordinated debt resulting in the acceleration
of the maturity thereof,of the senior or subordinated debt, or if any judicial
proceeding shall beis pending with respect to any such default.
"Allocable Amounts," when used with respect to any Senior and Subordinated
Indebtedness,The term "debt" means, all amounts due or to become due on such Senior and
Subordinated Indebtedness less, if applicable, any amount which would have been
paid to, and retained by, the holders of such Senior and Subordinated
Indebtedness (whether as a result of the receipt of payments by the holders of
such Senior and Subordinated Indebtedness from the Corporation or any other
obligor thereon or from any holders of, or trustee in respect of, other
indebtedness that is subordinate and junior in right of payment to such Senior
and Subordinated Indebtedness pursuant to any provision of such indebtedness for
the payment over of amounts received on account of such indebtedness to the
holders of such Senior and Subordinated Indebtedness or otherwise) but for the
fact that such Senior and Subordinated Indebtedness is subordinated or junior in
right of payment to (or subject to a requirement that amounts received on such
Senior and Subordinated Indebtedness be paid over to obligees on) trade accounts
payable or accrued liabilities arising in the ordinary course of business.
"Indebtedness" shall mean with respect to any person, whether recourse is to
all or a portion of the assets of suchthe person and whether or not contingent:
(i)- every obligation of the any person for money borrowed;
(ii)- every obligation of suchthe person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses;
(iii)- every reimbursement obligation of suchthe person with respect to letters of
credit, banker'sbankers' acceptances or similar facilities issued for the account
of suchthe person;
(iv)- every obligation of suchthe person issued or assumed as the deferred purchase
price of property or services, (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business); (v)business;
- every capital lease obligation of suchthe person; (vi) all indebtedness of such person whether incurred on or prior to the date of
the Indenture or thereafter incurred, for claims in respect of derivative
products, including interest rate, foreign exchange rate and
commodity forward
contracts, options and swaps and similar arrangements; and (vii)- every obligation of the type referred to in clauses (i) through (vi)the first five points of
another person and all dividends of another person the payment of which,
in either case, suchthe first person has guaranteed or is responsible or
liable, directly or indirectly, as obligor or otherwise.
"Senior and Subordinated Indebtedness"The term "senior debt" means the principal of, (andand premium
if any) and interest,
if any (includingincluding interest accruing on or after the filing of any petition in bankruptcy
or for reorganization relating to the Corporation
whether or not such claim for post-petition interest is allowed in such
proceeding),company, on, Indebtedness of the Corporationdebt, whether incurred on or
prior to the date of the Indentureindenture or thereafter incurred unlessafter the date. However, senior
debt will not be deemed to include:
- any debt where it is provided in the instrument creating or evidencing the same or pursuant to whichdebt that the same is outstanding, it
is provided that such
obligations are not superior in right of payment to the Junior Subordinated Debenturesdebentures or to
other Indebtednessdebt which is pari passuequal with, or subordinated to, the Juniordebentures;
35
- any of Independent's debt that when incurred and without regard to any
election under the federal bankruptcy laws, was without recourse to
Independent;
- any debt to any of Independent's employees;
- any debt that by its terms is subordinated to trade accounts payable or
accrued liabilities arising in the ordinary course of business to the
extent that payments made to the holders of the debt by the holders of the
debentures as a result of the subordination provisions of the indenture
would be greater than they otherwise would have been as a result of any
obligation of the holders to pay amounts over to the obligees on the trade
accounts payable or accrued liabilities arising in the ordinary course of
business as a result of subordination provisions to which the debt is
subject; and
- debt which constitutes subordinated debt.
The term "subordinated debt" means the principal of, and premium and
interest, including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the company, on, debt. Subordinated
Debentures;debt includes debt incurred on or prior to the date of the indenture or
thereafter incurred, which is by its terms expressly provided 58
however, that Seniorto be junior and
Subordinated Indebtedness shallsubordinate to other debt of Independent, other than the debentures. However,
subordinated debt will not be deemed to include (i)include:
- any Indebtedness of the CorporationIndependent's debt which when incurred and without respectregard to any
election under section 1111(b) of the United States Bankruptcy
Code of 1978, as amended,federal bankruptcy laws was without recourse to
the Corporation, (ii)Independent;
- any Indebtedness of the Corporationdebt to any of Independent's employees;
- any debt which by its subsidiaries, (iii) Indebtednessterms is subordinated to trade accounts payable or
accrued liabilities arising in the ordinary course of business to the
extent that payments made to the holders of the debt by the holders of the
debentures as a result of the subordination provisions of the indenture
would be greater than they otherwise would have been as a result of any
obligation of the holders to pay amounts over to the obligees on the trade
accounts payable or accrued liabilities arising in the ordinary course of
business as a result of subordination provisions to which the debt is
subject;
- debt which constitutes senior debt; and
- any debt of Independent's under debt securities (and guarantees in respect
of these debt securities) initially issued to any employeetrust, or a trustee of the Corporation, and (iv) anya
trust, partnership or other debt securities issued
pursuant to the Indenture.
The Corporationentity affiliated with Independent that is, a holding company and almost all of the operating assets
of the Corporation are owned by the Corporation's subsidiary. The Corporation
relies primarily on dividends from the Bank to meet its corporate expenses. The
Corporation is a legal entity separate and distinct from its subsidiaries.
Holders of Junior Subordinated Debentures should look only to the Corporation
for payments on the Junior Subordinated Debentures. There are regulatory
limitations on the payment of dividends
directly or indirectly, to the
Corporation from the Bank. See "--General." In addition, the Bank is subject to
certain restrictions imposed by federal law on any extensions of credit to, and
certain other transactionsa financing subsidiary in connection with the
Corporation and certain other affiliates,
and on investments in stockissuance by that entity of preferred securities or other securities thereof. Such restrictions
preventwhich
are intended to qualify for "Tier 1" capital treatment.
Independent may from time to time to incur senior or subordinated debt and
there is no limitation under the Corporationindenture on the amount of indebtedness
Independent may incur. Independent had no consolidated senior and such other affiliates from borrowing fromsubordinated
debt outstanding at September 30, 2001. Independent's obligations under the
Bank
unless the loans are secureddebentures issued by various types of collateral. Further, such
secured loans, other transactions and investments by the Bank are generally
limited in amount as to the Corporation and asit to each of such other affiliates
to 10% of the Bank's capital and surplus and aspreviously established trusts will rank
equal to the Corporation and all of
such other affiliatesdebentures issued to an aggregate of 20% of the Bank's capital and surplus.
Accordingly, the Junior Subordinated Debentures will be effectively subordinated
to all existing and future liabilities of the Corporation's subsidiaries.
Because the Corporation is a holding company, the right of the Corporation
to participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Trust Preferred Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of that subsidiary
(including depositors, in the case of the Bank), except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary. At
December 31, 1996, the subsidiary of the Corporation had total liabilities
(excluding liabilities owed to the Corporation) of $1.0 billion. Accordingly,
the Junior Subordinated Debentures will be effectively subordinated to all
existing and future liabilities of the Corporation's subsidiary and all
liabilities of any future subsidiaries of the Corporation. The Indenture does
not limit the incurrence or issuance of other secured or unsecured debt of the
Corporation or any subsidiary, including Senior and Subordinated Indebtedness.
Denominations, Registration and Transfer
The Junior Subordinated Debentures will be represented by global
certificates registered in the name of the Depositary or its nominee ("Global
Subordinated Debenture"). Beneficial interests in the Junior Subordinated
Debentures will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary. Except as described below, Junior
Subordinated Debentures in certificated form will not be issued in exchange for
the global certificates. See "Book-Entry Issuance."
59
Unless and until a Global Subordinated Debenture is exchanged in whole or
in part for the individual Junior Subordinated Debentures represented thereby,
it may not be transferred except as a whole by the Depositary for such Global
Subordinated Debenture to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor.
A global security shall be exchangeable for Junior Subordinated Debentures
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies the Corporation that it is unwilling or unable to
continue as a depositary for such global security and no successor shall have
been appointed, or if at any time the Depositary ceases to be a clearing agency
registered under the Exchange Act, at a time when the Depositary is required to
be so registered to act as such depositary, (ii) the Corporation in its sole
discretion determines that such global security shall be so exchangeable or
(iii) there shall have occurred and be continuing a Debenture Event of Default
with respect to such global security. Any global security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for definitive
certificates registered in such names as the Depositary shall direct. It is
expected that such instructions will be based upon directions received by the
Depositary from its Participants with respect to ownership of beneficial
interests in such global security. In the event that Junior Subordinated
Debentures are issued in definitive form, such Junior Subordinated Debentures
will be in denominations of $25 and integral multiples thereof and may be
transferred or exchanged at the offices described below.
Payments on Junior Subordinated Debentures represented by a global security
will be made to the Depositary, as the depositary for the Junior Subordinated
Debentures. In the event Junior Subordinated Debentures will be registrable, and
Junior Subordinated Debentures will be exchangeable for Junior Subordinated
Debentures of other denominations of a like aggregate principal amount, at the
corporate office of the Debenture Trustee, or at the offices of any paying agent
or transfer agent appointed by the Corporation, provided thatthis trust.
PAYMENT AND PAYING AGENTS
Generally, payment of principal of and interest mayon the debentures will be
made at the optionoffice of the Corporationindenture trustee. However, Independent has the option
to make payment of any interest by (a) check mailed to the address of the personsperson
entitled to payment at the address listed in the register of holders of the
debentures, or (b) wire transfer to an account maintained by the person entitled
thereto as specified in the register of holders of the debentures, provided that
proper transfer instructions have
36
been received by the applicable record date. Payment of any interest on
debentures will be made to the person in whose name the debenture is registered
at the close of business on the regular record date for the interest payment,
except in the case of defaulted interest.
Any moneys deposited with the indenture trustee or any paying agent for the
debentures, or then held by wire transfer. In addition, ifIndependent in trust, for the
Junior Subordinated Debentures are issued in certificated form, the record dates
for payment of the
principal of or interest on the debentures and remaining unclaimed for two years
after the principal or interest has become due and payable, will be repaid to
Independent on December 31 of each year. If Independent holds any of this money
in trust, then it will be discharged from the first daytrust to Independent and the
holder of the month in which such payment
isdebenture will thereafter look, as a general unsecured creditor,
only to be made. For a description ofIndependent for payment.
REGISTRAR AND TRANSFER AGENT
The indenture trustee will act as the Depositaryregistrar and the terms oftransfer agent for
the depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Book-Entry Issuance."
The Corporation will appoint the Debenture Trustee as securities registrar
under the Indenture (the "Securities Registrar"). Junior Subordinateddebentures. Debentures
may be presented for exchange as provided above, and may be presented for registration of transfer, (withwith
the form of transfer endorsed thereon, or a satisfactory written instrument of
transfer, duly executed),executed, at the office of the Securities Registrar. The Corporation may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, provided that the Corporation
maintains a transfer agent in the place of payment. The
60
Corporationregistrar. Independent may at any
time designate additional transfer agents with respect to the Junior Subordinated Debentures.
Indebentures.
If Independent redeems any of the event of any redemption,debentures, neither the CorporationIndependent nor the
Debenture
Trustee shallindenture trustee will be required to (i)(a) issue, register the transfer of or
exchange Junior Subordinated Debenturesany debentures during a period beginning at the opening of business
15 days before the day of selection for redemptionthe mailing of Junior
Subordinated Debentures and ending at the close of business on
the day of the mailing of the relevant notice of redemption, or (ii)(b) transfer or
exchange any Junior Subordinated Debenturesdebentures so selected for redemption, except, in the case of any
Junior Subordinated Debenturesdebentures being redeemed in part, any portion thereof not to be redeemed.
Global Subordinated Debentures
Upon the issuance of the Global Subordinated DebentureMODIFICATION OF INDENTURE
Independent and the deposit of
such Global Subordinated Debenture with or on behalf of the Depositary, the
Depositary for such Global Subordinated Debenture or its nominee will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the individual Junior Subordinated Debentures represented by such
Global Subordinated Debenture to the accounts of persons that have accounts with
such Depositary ("Participants"). Ownership of beneficial interests in a Global
Subordinated Debenture will be limited to Participants or persons thatindenture trustee may, hold
interests through Participants. Ownership of beneficial interests in such Global
Subordinated Debenture will be shown on, and the transfer of that ownership will
be effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of Participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to transfer beneficial interests in a Global Subordinated Debenture.
So long as the Depositary for a Global Subordinated Debenture, or its
nominee, is the registered owner of such Global Subordinated Debenture, such
Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Junior Subordinated Debentures represented by such Global
Subordinated Debenture for all purposes under the Indenture governing such
Junior Subordinated Debentures. Except as provided below, owners of beneficial
interests in a Global Subordinated Debenture will not be entitled to have any of
the individual Junior Subordinated Debentures represented by such Global
Subordinated Debenture registered in their names, will not receive or be
entitled to receive physical delivery of any such Junior Subordinated Debentures
in definitive form and will not be considered the owners or holders thereof
under the Indenture.
Payments of principal of and interest on individual Junior Subordinated
Debentures represented by a Global Subordinated Debenture registered in the name
of the Depositary or its nominee will be made to the Depositary or its nominee,
as the case may be, as the registered owner of the Global Subordinated Debenture
representing such Junior Subordinated Debentures. None of the Corporation, the
Debenture Trustee, any Paying Agent, or the Securities Registrar for such Junior
Subordinated Debentures will have any responsibility or liability for any aspect
61
of the records relating to or payments made on account of beneficial ownership
interests of the Global Subordinated Debenture representing such Junior
Subordinated Debentures or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Corporation expects that the Depositary or its nominee, upon receipt of
any payment of principal or interest in respect of a permanent Global
Subordinated Debenture representing the Junior Subordinated Debentures,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount of
the Global Subordinated Debenture as shown on the records of such Depositary or
its nominee. The Corporation also expects that payments by Participants to
owners of beneficial interests in such Global Subordinated Debenture held
through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Participants.
If the Depositary is at any time unwilling, unable or ineligible to
continue as depositary and a successor depositary is not appointed by the
Corporation with 90 days, the Corporation will issue individual Junior
Subordinated Debentures in exchange for the Global Subordinated Debenture. In
addition, the Corporation may at any time and in its sole discretion, determine
not to have the Junior Subordinated Debentures represented by one or more Global
Subordinated Debenture and, in such event, will issue individual Junior
Subordinated Debentures in exchange for the Global Subordinated Debenture.
Further, the Corporation so specifies with respect to the Junior Subordinated
Debentures, an owner of a beneficial interest in a Global Subordinated Debenture
representing Junior Subordinated Debentures may, on terms acceptable to the
Corporation, the Debenture Trustee and the Depositary for such Global
Subordinated Debenture, receive individual Junior Subordinated Debentures in
exchange for such beneficial interests. In any such instance, an owner of a
beneficial interest in a Global Subordinated Debenture will be entitled to
physical delivery of individual Junior Subordinated Debentures registered in its
name. Individual Junior Subordinated Debentures so issued will be issued in
denominations, unless otherwise specified by the Corporation, of $25 and
integral multiples thereof.
Payment and Paying Agents
Payment of principal of and any interest on Junior Subordinated Debentures
will be made at the office of the Debenture Trustee in the City of New York or
at the office of such Paying Agent or Paying Agents as the Corporation may
designate from time to time except that at the option of the Corporation
payment of any interest may be made, except in the case of Junior Subordinated
Debentures in global form, (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the register for Junior
Subordinated Debentures or (ii) by transfer to an account maintained by the
Person entitled thereto as specified in such register, provided that proper
transfer instructions have been received by the relevant Record Date. Payment of
any interest on any Junior Subordinated Debenture will be made to the Person in
whose name such Junior Subordinated Debenture is registered at the close of
business on the Record Date for such interest. The Corporation may at any time
designate additional Paying
62
Agents or rescind the designation of any Paying Agent; however the Corporation
will at all times be required to maintain a Paying Agent in each place of
payment for the Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of or
interest on any Junior Subordinated Debenture and remaining unclaimed for two
years after such principal or interest has become due and payable shall, at the
request of the Corporation, be repaid to the Corporation and the holder of such
Junior Subordinated Debenture shall thereafter look, as a general unsecured
creditor, only to the Corporation for payment thereof.
Modification of Indenture
From time to time the Corporation and the Debenture Trustee may, without the
consent of the holders of Junior Subordinated Debentures,the debentures, amend, waive its rights under, or
supplement, the Indentureindenture for specified purposes including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
doeswhich do not materially adversely affect
the interestrights of the holders of Junior
Subordinated Debentures), and qualifying, or maintaining the qualification of,
the Indenture under the Trust Indenture Act. The Indenture contains provisions
permitting the Corporationdebentures. Other changes may be made by
Independent and the Debenture Trustee,indenture trustee with the consent of the holders of a
majority in principal amount of Junior Subordinated Debentures, to
modify the Indenture in a manner affecting the rights of the holders of Junior
Subordinated Debentures; provided that no such modification may,outstanding debentures. However, without the
consent of the holdersholder of each outstanding Junior Subordinated Debenture sodebenture affected (i) changeby the Stated Maturity Date, orproposed
modification, no modification may:
- extend the maturity date of the debentures;
- reduce the principal amount of
the Junior Subordinated Debentures or reduce the rate or extend the time of payment of
interest thereon except pursuant to the Corporation's right under the
Indenture to defer the payment of interest as provided therein (see "--Option to
Extend Interest Payment Date")interest; or
make the principal of, or interest on, the
Junior Subordinated Debentures payable in any coin or currency other than U.S.
dollars, or impair or affect the right of any holder of Junior Subordinated
Debentures to institute suit for the payment thereof, or (ii)- reduce the percentage of principal amount of Junior Subordinated Debentures, the holders of
which aredebentures required to consent to any such modification ofamend
the Indenture,
provided that soindenture.
As long as any of the Trust Preferred Securitiespreferred securities remain outstanding, no
such modification of the indenture may be made that adversely affectsrequires the consent of the
holders of such Trust Preferred Securities in any material respect, andthe debentures, no termination of the Indentureindenture may occur, and no
waiver of any Debenture Eventevent of Default or
compliance with any covenantdefault under the Indentureindenture may be effective, without the
prior consent of the holders of at least a majority of the aggregate Liquidation
Amountliquidation amount
of the Trust Preferred Securities unless and until the principal of the
Junior Subordinated Debentures and all accrued and unpaid interest thereon have
been paid in full and certain other conditions are satisfied. Where a consent
under the Indenture would require the consent of each holder of Junior
Subordinated Debentures, no such consent shall be given by the Property Trustee
without the prior consent of each holder of Trust Preferred Securities. In
addition, the Corporation and the Debenture Trustee may execute, without the
consent of any holder of Junior Subordinated Debentures, any supplemental
Indenture for the purpose of creating any new series of Junior Subordinated
Debentures.
63
Debenture Events of Defaultpreferred securities.
DEBENTURE EVENTS OF DEFAULT
The Indentureindenture provides that any one or more of the following described
events with
respect to the Junior Subordinated Debenturesdebentures that has occurred and is continuing constitutes a
"Debenture Eventan
event of Default" (whateverdefault under the reason for such Debenture Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i)indenture:
- Independent's failure for 30 days to pay any interest on the Junior Subordinated
Debentures or any other Debentures, when due (subject todebentures for 30 days
after the deferral of any due date, inexcept where it has properly deferred the case of an Extension Period); or
(ii)interest
payment;
- Independent's failure to pay any principal on the Junior Subordinated Debentures or
any other Debenturesdebentures when due
whether at maturity, upon redemption by
declaration of acceleration of maturity or otherwise;
or
(iii)37
- Independent's failure to observe or perform in any material respect certainany
other covenants or agreements contained in the Indentureindenture for 90 days after
written notice to the
Corporationit from the Debenture Trusteeindenture trustee or the holders of at least
25% in aggregate outstanding principal amount of Junior Subordinated Debentures;the debentures; or
(iv) certain events of- Independent's bankruptcy, insolvency or reorganizationsimilar state creditor remedy or
dissolution of the Corporation.trust other than in connection with a distribution of
the debentures in connection with such dissolution, redemption of the
trust securities, or certain transactions permitted under the trust
agreement.
The holders of a majority inof the aggregate outstanding principal amount of
the Junior Subordinated Debenturesdebentures have subject to certain exceptions, the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee.indenture trustee. The Debenture Trusteeindenture
trustee, or the holders of not
less thanat least 25% in aggregate outstanding principal
amount of the Junior
Subordinated Debenturesdebentures, may declare the principal due and payable immediately
upon a Debenture Eventan event of Default. Ifdefault under the Debenture Trustee or such holders of
such Junior Subordinated Debentures fail to make such declaration, the holders
of at least 25% in the aggregate Liquidation Amount of the Trust Preferred
Securities shall have such right.indenture. The holders of a majority in aggregateof the
outstanding principal amount of the Junior Subordinated Debenturesdebentures may rescind and annul suchthe
declaration and waive the default if the default (other than the
non-payment of the principal of the Junior Subordinated Debentures which has
become due solely by such acceleration) has been cured and a sum sufficient to
pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee. Should the holders
of the Junior Subordinated Debentures fail to annul such declaration and waive
such default, the holders of a majority in aggregate Liquidation Amount of the
Trust Preferred Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures affected thereby may, on behalf of the holders of
all the Junior Subordinated Debentures, waive any past default, except a default
in the payment of principal on or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture
Trustee) orindenture trustee so
long as the holders of a majority in liquidation amount of the trust securities
have consented to the waiver of default. The holders may not annul the
declaration and waive a default in respectif the default is the non-payment of a covenant or provisionthe
principal of the debentures which underhas become due solely by the Indenture cannot be modified or amended withoutacceleration. So
long as the consent ofproperty trustee is the holder of each outstanding Junior Subordinated Debenture.
64
In case a Debenture Eventthe debentures, if an event of
Default shall occurdefault under the indenture has occurred and beis continuing, as to
Junior Subordinated Debentures, the Property Trusteeproperty trustee
will have the right to declare the principal of and the interest on such Junior Subordinated
Debentures,the
debentures, and any other amounts payable under the Indenture,indenture, to be forthwithimmediately
due and payable and to enforce its other rights as a creditor with respect to
such Junior Subordinated Debentures.
The Indenture requires the annual filing by the Corporationdebentures.
Independent is required to file annually with the Debenture Trustee ofindenture trustee a
certificate as to whether or not it is in compliance with all of the absence of certain defaultsconditions
and covenants applicable to it under the Indenture.
Enforcementindenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF THE PREFERRED SECURITIES
If an event of Certain Rights by Holders of Trust Preferred Securities
If a Debenture Event of Default shall havedefault under the indenture has occurred and beis continuing
and shall bethe event is attributable to the failure by Independent to pay interest on
or principal of the Corporation to pay the principal of
or interestdebentures on the Junior Subordinated Debenturesdate on which the payment is due date,and
payable, then a holder of Trust Preferred Securitiespreferred securities may institute a Direct Action. The Corporationdirect action
against Independent to compel it to make the payment. Independent may not amend
the Indentureindenture to remove the foregoing right to bring a Direct Actiondirect action without the
prior written consent of all of the holders of all of the Trust Preferred
Securities.preferred securities. If the
right to bring a Direct Actiondirect action is removed, the Trusttrust may become subject to the
reporting obligations under the Securities Exchange Act.
Notwithstanding any payments made to a holderAct of Trust Preferred Securities by
the Corporation in connection with a Direct Action, the Corporation shall remain
obligated to pay the principal of or interest on the Junior Subordinated
Debentures, and the Corporation shall be subrogated to the rights of the holder
of such Trust Preferred Securities with respect to payments on the Trust
Preferred Securities to the extent of any payments made by the Corporation to
such holder in any Direct Action.1934.
The holders of the Trust Preferred Securitiespreferred securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Junior Subordinated Debenturesdebentures unless there shall havehas been an Eventevent of
Defaultdefault under the Trust Agreement. See "Description
of Trust Preferred Securities--Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Corporation shalltrust agreement.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
Independent may not consolidate with or merge into any other Personentity or
convey transfer or leasetransfer its properties as an
entirety orand assets substantially as an entirety to any
Person,entity, and no Person shall
consolidateentity may be consolidated with or mergemerged into the CorporationIndependent or
sell, convey, transfer or leaseotherwise dispose of its properties as an entirety orand assets
substantially as an entirety to the Corporation,Independent , unless:
(i) in case the Corporation- Independent consolidates with or merges into another Personentity or conveys or
transfers its properties and assets substantially as an entirety to any
Person,entity, the successor Personentity is organized under the laws of the United
States or any Statestate or the District of Columbia, and suchthe successor Personentity
expressly assumes the Corporation'sby supplemental indenture Independent's obligations on
the Junior Subordinated
Debentures; (ii)debentures;
38
- the ultimate parent entity of the successor entity expressly assumes
Independent's obligations under the guarantee, to the extent the preferred
securities are then outstanding;
- immediately after giving effect thereto,the transaction, no Debenture Eventevent of Default,default under the
indenture, and no event which, after notice or lapse of time, or both,
would become a Debenture Eventan event of Default, shall havedefault under the indenture, has occurred and beis
continuing; and
(iii)
certain- other conditions as prescribed in the Indentureindenture are met.
65
The generalUnder certain circumstances, if Independent consolidates or merges with
another entity, or transfers or sells substantially all of its assets to another
entity, such transaction may be considered to involve a replacement of the
trust, and the provisions of the Indenture do not afford holderstrust agreement relating to a replacement of
the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Corporation that may adversely affect holderstrust would apply to such transaction. See "Description of the Junior Subordinated Debentures.
SatisfactionPreferred
Securities--Mergers, Consolidations, Amalgamations or Replacements of the Trust"
on page 26.
SATISFACTION AND DISCHARGE
The indenture will cease to be of further effect and Discharge
The Indenture provides thatIndependent will be
deemed to have satisfied and discharged its obligations under the indenture when
among other things, all Junior
Subordinated Debenturesdebentures not previously delivered to the Debenture Trusteeindenture trustee for
cancellation (i)cancellation:
- have become due and payablepayable; or
(ii)- will become due and payable at their stated maturity within one year or
are to be called for redemption within one year, and the CorporationIndependent deposits
or causes to be deposited with the Debenture Trusteeindenture trustee funds, in trust, for
the purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the Junior Subordinated Debenturesdebentures not previously delivered to the Debenture Trusteeindenture
trustee for cancellation, for the principal and interest due to the Stated Maturity Date, thendate
of the Indenture will cease to be of further effect
(except asdeposit or to the Corporation's obligationsstated maturity or redemption date, as the case
may be.
Independent may still be required to pay all other sums due pursuant
to the Indenture and to provide the officers' certificates and
opinions of counsel described therein),and pay fees and expenses due after these events occur.
GOVERNING LAW
The indenture and the Corporation will be deemed to have satisfied
and discharged the Indenture.
Covenants of the Corporation
The Corporation will covenant in the Indenture, as to the Junior
Subordinated Debentures, that if and so long as (i) the Trust is the holder of
all such Junior Subordinated Debentures, (ii) a Tax Event in respect of the
Trust has occurred and is continuing and (iii) the Corporation has elected, and
has not revoked such election, to pay Additional Sums (as defined under
"Description of the Trust Preferred Securities--Redemption") in respect of the
Trust Preferred Securities, the Corporation will pay to the Trust such
Additional Sums. The Corporation will also covenant, as to the Junior
Subordinated Debentures, (i) to maintain directly or indirectly 100% ownership
of the Common Securities of the Trust to which Junior Subordinated Debentures
have been issued, provided that certain successors which are permitted pursuant
to the Indenture may succeed to the Corporation's ownership of the Common
Securities, (ii) not to voluntarily terminate, wind up or liquidate the Trust
except as prior approval of the Federal Reserve if then so required under
applicable capital guidelines or policies of the Federal Reserve, and except (a)
in connection with a distribution of Junior Subordinated Debentures to the
holders of the Trust Preferred Securities in liquidation of the Trust or (b) in
connection with certain mergers, consolidations, or amalgamations permitted by
the Trust Agreement and (iii) to use its reasonable efforts, consistent with the
terms and provisions of the Trust Agreement, to cause the Trust to remain
classified as a grantor trust and not as an association taxable as a corporation
for United States federal income tax purposes.
66
Governing Law
The Indenture and the Junior Subordinated Debenturesdebentures will be governed by and construed in
accordance with the laws of the State of New York.
Information Concerning the Debenture TrusteeYork law.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Debenture Trustee shall have and beindenture trustee is subject to all the duties and responsibilities
specified with respect to an indenture trustee under the Trust Indenture Act.
Subject to suchthese provisions, the Debenture Trusteeindenture trustee is under no obligation to
exercise any of the powers vested in it by the Indentureindenture at the request of any
holder of Junior Subordinated Debentures,debentures, unless offered reasonable security or indemnity by suchthe
holder against the costs, expenses and liabilities which might be incurred thereby.incurred. The
Debenture Trusteeindenture trustee is not required to expend or risk its own funds or otherwise
incur personal financial liability in the performance of its duties if the
Debenture Trusteeindenture trustee reasonably believes that repayment or adequate indemnity is
not reasonably assured to it.
6739
DESCRIPTION OF GUARANTEE
The Guarantee will be executed and delivered byMISCELLANEOUS
Independent has agreed, pursuant to the Corporation
concurrently with the issuance by the Trustindenture, for so long as preferred
securities remain outstanding:
- to maintain directly or indirectly 100% ownership of the Trust Preferred Securities
for the benefitcommon securities
of the holders from timetrust, except that certain successors that are permitted pursuant
to timethe indenture may succeed to Independent's ownership of the Trust Preferred
Securities. The Bank of New York will act as Guarantee Trustee undercommon
securities;
- not to voluntarily dissolve the Guarantee for purposes of compliance with the Trust Indenture Act, and the
Guarantee will be qualified as an Indenture under the Trust Indenture Act. This
summary of certain provisionstrust without prior approval of the
Guarantee does not purportFederal Reserve, if required;
- to be complete
and is subjectuse its reasonable efforts to and qualified in its entirety by referencecause the trust (a) to all of the
provisions of the Guarantee, including the definitions therein of certain terms,
and the Trust Indenture Act. The form of the Guarantee has been filed as an
exhibitremain a business
trust (and to the Registration Statement of which this Prospectus forms a part. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Trust Preferred Securities.
General
The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Trust's obligations under the Trust Preferred Securities, but will apply
only to the extent that the Trust has funds sufficient to make such payments,
and is not a guarantee of collection.
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Trust Preferred Securities, as and when due, regardless of
any defense, right of set-off or counterclaim that the Trust may have or assert
other than the defense of payment. The following payments with respect to the
Trust Preferred Securities, to the extent not paid by or on behalf of the Trust
(the "Guarantee Payments")avoid involuntary dissolution), will be subject to the Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on the Trust Preferred
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable redemption price with respect to the
Trust Preferred Securities called for redemption, to the extent that the Trust
has funds on hand legally available therefor at such time, and (iii) upon a
voluntary or involuntary dissolution, winding-up or liquidation of the Trust
(other thanexcept in connection with thea
distribution of the Junior Subordinated
Debentures to holders of the Trust Preferred Securities ordebentures, the redemption of all Trust Preferred Securities),of the lessertrust securities
of (a) the Liquidation Distribution, totrust or mergers, consolidations or amalgamations, each as
permitted by the extent the Trust has funds legally available therefor at the time,trust agreement; and (b) to otherwise continue not to be
treated as an association taxable as a corporation or partnership for
federal income tax purposes;
- to use its reasonable efforts to cause each holder of trust securities to
be treated as owning an individual beneficial interest in the amount of assetsdebentures;
and
- to use its best efforts to maintain the eligibility of the Trust remaining availablepreferred
securities for distribution to
holders of Trust Preferred Securities after satisfaction of liabilities to
creditors of the Trust as required by applicable law. The Corporation's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Corporation to the holders of the Trust Preferred
Securitiesinclusion, quotation or by causing the Trust to pay such amounts to such holders.
If the Corporation does not make interest payments on the Junior
Subordinated Debentures held by the Trust, the Trust will not be able to pay
Distributions on the Trust Preferred Securities and will not have funds legally
available therefor. The Guarantee will rank subordinate and junior in right of
payment to all Senior and Subordinated Indebtedness to the extent provided
therein. See "--Status of the Guarantee." Because the Corporation is a holding
company, the right of the Corporation to participate in any distribution of
assets of any subsidiary upon such
68
subsidiary's liquidation or reorganization or otherwise is subject to the prior
claims of creditors of that subsidiary, except to the extent the Corporation may
itself be recognized as a creditor of that subsidiary. Accordingly, the
Corporation's obligations under the Guarantee effectively will be subordinated
to all existing and future liabilities of the Corporation's subsidiary and all
liabilities of any future subsidiaries of the Corporation. Claimants should look
only to the assets of the Corporation for payments under the Guarantee. See
"Description of the Junior Subordinated Debentures--General." The Guarantee does
not limit the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior and Subordinated Indebtedness, whether under the
Indenture, any other indenture that the Corporation may enter intolisting in the futureNasdaq National
Market or otherwise.
The Corporation will, through the Guarantee, the Trust Agreement, the
Junior Subordinated Debentures and the Indenture, taken together, fully,
irrevocably and unconditionally guarantee all of the Trust's obligations under
the Trust Preferred Securities. No single document standing aloneon any national securities exchange or operating
in conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Trust Preferred Securities. See "Relationship
Among the Trust Preferred Securities, the Junior Subordinated Debentures and the
Guarantee."
Status of the Guarantee
The Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior and
Subordinated Indebtedness in the same mannerorganization for as
long as the Junior Subordinated
Debentures.
The Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The
Guarantee will be held for the benefit of the holders of the Trust Preferred
Securities. The Guarantee will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by the Trust or upon
distribution to the holders of the Trust Preferred Securities of the Junior
Subordinated Debentures. The Guarantee does not place a limitation on the amount
of additional Senior and Subordinated Indebtedness that may be incurred by the
Corporation.
Events of Default
An event of default under the Guarantee will occur upon the failure of the
Corporation to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the Trust
Preferred Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
69
Any holder of the Trust Preferred Securities may institute a legal
proceeding directly against the Corporation to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity.
The Corporation, as guarantor, will be required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Trust Preferred Securities (in which case no vote
will be required), the Guarantee may not be amended without the prior approval
of the holders of a majority of the aggregate Liquidation Amount of such
outstanding Trust Preferred Securities. The manner of obtaining any such
approval will be as set forth under "Description of Trust Preferred
Securities--Voting Rights; Amendment of the Trust Agreement." All guarantees and
agreements contained in the Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Corporation and shall
inure to the benefit of the holders of the Trust Preferred Securities thenpreferred securities are outstanding.
Termination of the Guarantee
The Guarantee will terminate and be of no further force and effect upon
full payment of the redemption price of the Trust Preferred Securities, upon
full payment of the Liquidation Amount payable upon liquidation of the Trust or
upon distribution of Junior Subordinated Debentures to the holders of the Trust
Preferred Securities. The Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the Trust Preferred
Securities must restore payment of any sums paid under the Trust Preferred
Securities or the Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of the Guarantee, will undertake to
perform only such duties as are specifically set forth in the Guarantee and, in
case a default with respect to the Guarantee has occurred, must exercise the
same degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the Guarantee
Trustee will be under no obligation to exercise any of the powers vested in it
by the Guarantee at the request of any holder of the Trust Preferred Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby.
Governing Law
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
7040
BOOK-ENTRY ISSUANCE
The DepositaryGENERAL
DTC will act as securities depositary for the preferred securities and may
act as securities depositary for all of the Trust
Preferred Securities anddebentures in the Junior Subordinated Debentures. The Trust Preferred
Securities andevent of the
Junior Subordinated Debenturesdistribution of the debentures to the holders of preferred securities. Except as
described below, the preferred securities will be issued only as fully-registeredregistered
securities registered in the name of Cede & Co. (the
Depositary's(DTC's nominee). One or more fully-registered global
certificatespreferred securities will be issued for the Trust Preferred Securities and the Junior Subordinated Debenturespreferred securities and will be
deposited with the Depositary.
The DepositaryDTC.
DTC is a limited purpose trust company organized under the New York Banking Law, asbanking law,
a "banking organization" within the meaning of the New York Banking Law,banking law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange Act. The DepositaryAct of 1934. DTC
holds securities that its Participantsparticipants deposit with the
Depositary. The DepositaryDTC. DTC also facilitates
the settlement among Participantsparticipants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants'participants' accounts, thereby eliminating the need for physical
movement of securities certificates. "Direct Participants"Direct participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. The DepositaryDTC is owned by a number of its Direct Participantsdirect participants and by
the New York Stock Exchange, Inc., the American Stock Exchange Inc. and the National
Association of Securities Dealers, Inc. Access to the DepositaryDTC system is also
available to othersindirect participants, such as securities brokers and dealers,
banks and trust companies that clear through or maintain custodial relationships
with Direct Participants,direct participants, either directly or indirectly ("Indirect Participants").indirectly. The rules applicable to
the DepositaryDTC and its Participantsparticipants are on file with the Securities and Exchange
Commission.
Purchases of Trust Preferred Securities or Junior Subordinated Debenturespreferred securities within the DepositaryDTC system must be made by or
through Direct Participants,direct participants, which will receive a credit for the Trust Preferred Securities or Junior
Subordinated Debenturespreferred
securities on the Depositary'sDTC's records. The ownership interest of each actual purchaser of
each Trust Preferred Securities and each Subordinated
Debenture ("Beneficial Owner")preferred security, referred to below as a "beneficial owner," is in turn
to be recorded on the Directdirect and Indirect Participants'indirect participants' records. Beneficial
Ownersowners will not receive written confirmation from the DepositaryDTC of their purchases, but
Beneficial Ownersbeneficial owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Directdirect or Indirect
Participantsindirect participants through which the Beneficial Ownersbeneficial owners
purchased Trust Preferred
Securities or Junior Subordinated Debentures.preferred securities. Transfers of ownership interests in the
Trust Preferred Securities or Junior Subordinated Debenturespreferred securities are to be accomplished by entries made on the books of
Participantsparticipants acting on behalf of beneficial owners. Beneficial Owners. Beneficial Ownersowners will not
receive certificates representing their ownership interestsinterest in Trust Preferred Securities or Junior Subordinated
Debentures,preferred
securities, except in the event thatif use of the book-entrybook-entry-only system for the Junior
Subordinated Debenturespreferred
securities is discontinued.
The Depositary hasDTC will have no knowledge of the actual Beneficial Ownersbeneficial owners of the Trust Preferred Securities or Junior Subordinated Debentures; the Depositary'spreferred
securities; DTC's records reflect only the identity of the Direct Participantsdirect participants
to whose accounts such Trust Preferred Securities or Junior
71
Subordinated Debenturesthe preferred securities are credited, which may or may not be
the Beneficial
Owners.beneficial owners. The Participantsparticipants will remain responsible for keeping
account of their holdings on behalf of their customers. The information in this
section concerning DTC and DTC's book-entry system has been obtained from
sources that Independent believes to be accurate, but Independent and the trust
assume no responsibility for the accuracy thereof. Neither Independent nor the
trust have any responsibility for the performance by DTC or its participants of
their respective obligations as described in this prospectus or under the rules
and procedures governing their respective operations.
NOTICES AND VOTING
Conveyance of notices and other communications by the DepositaryDTC to Direct
Participants,direct
participants, by Direct Participantsdirect participants to Indirect Participants,indirect participants, and by Direct
Participantsdirect and
Indirect Participantsindirect participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Ownersbeneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
41
Redemption notices will be sent to Cede & Co. as the registered holder of
the Trust Preferred Securities or Junior Subordinated Debentures.preferred securities. If less than all of the Trust Preferred Securities or the Junior Subordinated Debenturespreferred securities are being
redeemed, the Depository will determine by lot or pro rata the amount of
the Trust Preferred Securities of each Direct Participant to be redeemed.redeemed will be determined in accordance with the
trust agreement.
Although voting with respect to the Trust Preferred Securities or the
Junior Subordinated Debenturespreferred securities is limited to the
holders of record of the Trust
Preferred Securities or Junior Subordinated Debentures, as applicable,preferred securities, in those instances in which a
vote is required, neither the DepositaryDTC nor Cede & Co. will itself consent or vote with
respect to Trust Preferred Securities or Junior
Subordinated Debentures.preferred securities. Under its usual procedures, the DepositoryDTC would mail an
omnibus proxy (the "Omnibus Proxy") to the relevant Issuer Trusteeproperty trustee as soon as possible after the record date.
The Omnibus Proxyomnibus proxy assigns Cede & Co.'s consenting or voting rights to those
Direct Participantsdirect participants to whose accounts such
Trust Preferred Securities or Junior Subordinated Debenturesthe preferred securities are credited on
the record date (identified in a listing attached to the Omnibus Proxy).
Distributiondate.
DISTRIBUTION OF FUNDS
The property trustee will make distribution payments on the Trust Preferred Securities or the Junior
Subordinated Debentures will be made by the relevant Issuer Trusteepreferred
securities to the
Depositary. The Depositary'sDTC. DTC's practice is to credit Direct Participants'direct participants' accounts on
the relevant payment date in accordance with their respective holdings shown on
the Depositary'sDTC's records unless the DepositaryDTC has reason to believe that it will not receive payments
on suchthe payment date. Payments by Participantsparticipants to Beneficial Ownersbeneficial owners will be
governed by standing instructions and customary practices and will be the
responsibility of such Participantthe participant and not of DTC, the Depositary,property trustee, the
relevant Issuer Trustee, the Trusttrust or the Corporation,Independent, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of Distributionsdistributions to the DepositaryDTC is the
responsibility of the relevant Issuer Trustee,property trustee, disbursement of suchthe payments to Direct Participantsdirect
participants is the responsibility of the Depositary,DTC, and disbursements of suchthe payments to
the Beneficial Ownersbeneficial owners is the responsibility of Directdirect and Indirect Participants.
The Depositaryindirect participants.
SUCCESSOR DEPOSITARIES AND TERMINATION OF BOOK-ENTRY SYSTEM
DTC may discontinue providing its services as securities
depositary with respect to any of the
Trust Preferred Securities or the Junior
Subordinated Debenturespreferred securities at any time by giving reasonable notice to the relevant
Issuer Trustee and the Corporation. In the event that aproperty
trustee or Independent. If no successor securities depositary is not obtained,
definitive Trust Preferred Securities or
Subordinated Debentures certificates representing such Trust Preferred
Securities or Junior Subordinated Debenturesthe preferred securities are required to be
printed and delivered. The Corporation, at itsIndependent also has the option
72
may decide to discontinue use of the
system of book-entry transfers through the
DepositaryDTC (or a successor depositary). After a Debenture Eventan
event of Default,default under the indenture, the holders of a majority in liquidation
preference of Trust Preferred Securities or
aggregate principal amount of Junior Subordinated Debenturespreferred securities may determine to discontinue the system of
book-entry transfers through the Depositary.DTC. In any
such event,these events, definitive certificates for
such Trust Preferred Securities or
Junior Subordinated Debenturesthe preferred securities will be printed and delivered.
42
DESCRIPTION OF THE GUARANTEE
THE PREFERRED SECURITIES GUARANTEE AGREEMENT WILL BE EXECUTED AND DELIVERED
BY INDEPENDENT CONCURRENTLY WITH THE ISSUANCE OF THE PREFERRED SECURITIES FOR
THE BENEFIT OF THE HOLDERS OF THE PREFERRED SECURITIES. THE GUARANTEE AGREEMENT
WILL BE QUALIFIED AS AN INDENTURE UNDER THE TRUST INDENTURE ACT. THE BANK OF NEW
YORK, THE GUARANTEE TRUSTEE, WILL ACT AS TRUSTEE FOR PURPOSES OF COMPLYING WITH
THE PROVISIONS OF THE TRUST INDENTURE ACT, AND WILL ALSO HOLD THE GUARANTEE FOR
THE BENEFIT OF THE HOLDERS OF THE PREFERRED SECURITIES. PROSPECTIVE INVESTORS
ARE URGED TO READ THE FORM OF THE GUARANTEE AGREEMENT, WHICH HAS BEEN FILED AS
AN EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS FORMS A PART.
GENERAL
Independent agrees to pay in full on a subordinated basis, to the extent
described in the guarantee agreement, the guarantee payments (as defined below)
to the holders of the preferred securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the trust may have or assert
other than the defense of payment.
The informationfollowing payments with respect to the preferred securities are called
the "guarantee payments" and, to the extent not paid or made by the trust and to
the extent that the trust has funds available for those distributions, will be
subject to the guarantee:
- any accumulated and unpaid distributions required to be paid on the
preferred securities;
- with respect to any preferred securities called for redemption, the
redemption price; and
- upon a voluntary or involuntary dissolution of the trust (other than in
connection with the distribution of debentures to the holders of preferred
securities in exchange for preferred securities), the lesser of:
(a) the amount of the liquidation distribution; and
(b) the amount of assets of the trust remaining available for
distribution to holders of preferred securities in liquidation of the
trust.
Independent may satisfy its obligations to make a guarantee payment by
making a direct payment of the required amounts to the holders of the preferred
securities or by causing the trust to pay the amounts to the holders.
The guarantee agreement is a guarantee, on a subordinated basis, of the
guarantee payments, but the guarantee only applies to the extent the trust has
funds available for those distributions. If Independent does not make interest
payments on the debentures purchased by the trust, the trust will not have funds
available to make the distributions and will not pay distributions on the
preferred securities.
STATUS OF THE GUARANTEE
The guarantee constitutes Independent's unsecured obligation that ranks
subordinate and junior in right of payment to all of its senior and subordinated
debt in the same manner as the debentures. Independent expects to incur
additional indebtedness in the future, although it has no specific plans in this
section concerningregard presently, and, except under certain limited circumstances, neither the
Depositaryindenture nor the trust agreement limits the amounts of senior and subordinated
debt that Independent may incur.
The guarantee constitutes a guarantee of payment and not of collection. If
Independent fails to make guarantee payments when required, holders of preferred
securities may institute a legal proceeding directly against Independent to
enforce their rights under the Depositary's book-entry systemguarantee without first instituting a legal
proceeding against any other person or entity.
43
The guarantee will not be discharged except by payment of the guarantee
payments in full to the extent not paid by the trust or upon distribution of the
debentures to the holders of the preferred securities. Because Independent is a
bank holding company, its right to participate in any distribution of assets of
any subsidiary upon the subsidiary's liquidation or reorganization or otherwise
is subject to the prior claims of creditors of that subsidiary, except to the
extent Independent may be recognized as a creditor of that subsidiary.
Independent's obligations under the guarantee, therefore, will be effectively
subordinated to all existing and future liabilities of Independent subsidiaries,
and claimants should look only to its assets for payments under the guarantee.
AMENDMENTS
Except with respect to any changes that do not materially adversely affect
the rights of holders of the preferred securities, in which case no vote will be
required, the guarantee may be amended only with the prior approval of the
holders of a majority of the aggregate liquidation amount of the outstanding
preferred securities.
EVENTS OF DEFAULT; REMEDIES
An event of default under the guarantee agreement will occur upon
Independent's failure to make any required guarantee payments or to perform any
other obligations under the guarantee. If the guarantee trustee obtains actual
knowledge that an event of default has been obtained from sources thatoccurred and is continuing, the Trustguarantee
trustee must enforce the guarantee for the benefit of the holders of the
preferred securities. The holders of a majority in aggregate liquidation amount
of the preferred securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Corporation believeguarantee
trustee in respect of the guarantee and may direct the exercise of any power
conferred upon the guarantee trustee under the guarantee agreement.
Any holder of preferred securities may institute and prosecute a legal
proceeding directly against Independent to enforce its rights under the
guarantee without first instituting a legal proceeding against the trust, the
guarantee trustee or any other person or entity.
Independent is required to provide to the guarantee trustee annually a
certificate as to whether or not Independent is in compliance with all of the
conditions and covenants applicable to it under the guarantee agreement.
TERMINATION OF THE GUARANTEE
The guarantee will terminate and be of no further force and effect upon:
- full payment of the redemption price of the preferred securities;
- full payment of the amounts payable upon liquidation of the trust; or
- distribution of the debentures to the holders of the preferred securities.
If at any time any holder of the preferred securities must restore payment
of any sums paid under the preferred securities or the guarantee, the guarantee
will continue to be accurate buteffective or will be reinstated with respect to such
amounts.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee, other than during the Trustoccurrence and continuance of
Independent's default in performance of the Corporation assumeguarantee, undertakes to perform
only those duties as are specifically set forth in the guarantee. When an event
of default has occurred and is continuing, the guarantee trustee must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. The guarantee trustee is under no
responsibility forobligation to exercise any of the accuracy thereof. Neither the Trust nor the
Corporation has any responsibility for the performancepowers
44
vested in it by the Depositary orguarantee at the request of any holder of any preferred
securities unless it is offered reasonable security indemnity against the costs,
expenses and liabilities that might be incurred in exercising these powers; but
this does not relieve the guarantee trustee of its Participants of their respective obligations as described herein orto exercise the
rights and powers under the rules and procedures governing their respective operations.
73
guarantee in the event of a default.
GOVERNING LAW
The guarantee will be governed by New York law.
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FullFULL AND UNCONDITIONAL GUARANTEE
Independent irrevocably guarantees, as and Unconditional Guarantee
Paymentsto the extent described in this
prospectus, payments of Distributionsdistributions and other amounts due on the Trust Preferred
Securities (topreferred
securities, to the extent the Trusttrust has funds on hand legally available for the payment of such Distributions) will be irrevocably guaranteed bythese
amounts. Independent and the Corporation
as and to the extent set forth under "Description of Guarantee." Takentrust believe that, taken together, the Corporation'sits obligations
under the Junior Subordinated Debentures,debentures, the Indenture,indenture, the Trust Agreementtrust agreement, and the Guarantee willguarantee
agreement provide, in the aggregate, a full, irrevocable and unconditional
guarantee, on a subordinated basis, of paymentspayment of Distributionsdistributions and other
amounts due on the Trust Preferred Securities.preferred securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
sucha guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations of the trust under the Trust Preferred Securities.preferred securities.
If and to the extent that the CorporationIndependent does not make the required payments on the
Junior
Subordinated Debentures,debentures, the Trusttrust will not pay distributions or other amounts due on the
preferred securities. The guarantee does not cover payment of distributions when
the trust does not have sufficient funds to makepay the related payments, including Distributions, on the Trust Preferred Securities.
The Guarantee will not cover any such payment when the Trust does not have
sufficient funds on hand legally available therefor.distributions. In suchthis
event, the remedy of a holder of Trust Preferred Securitiespreferred securities is to institute a Direct Action. The
obligationslegal
proceeding directly against Independent for enforcement of payment of the
Corporationdistributions to the holder. Independent's obligations under the Guarantee will be subordinateguarantee are
subordinated and junior in right of payment to all Senior and Subordinated Indebtedness.
Sufficiency of Paymentsits other indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, suchdebentures, these payments will be sufficient to cover Distributionsdistributions and other
payments due on the Trust Preferred Securities,preferred securities, primarily because:
(i)- the aggregate principal amount of the Junior Subordinated
Debenturesdebentures will be equal to the sum
of the aggregate Liquidation Amountstated liquidation amount of the Trust Securities; (ii)trust securities;
- the interest rate and interest and other payment dates on the Junior Subordinated Debenturesdebentures
will match the Distributiondistribution rate and Distributiondistribution and other payment dates
for the Trust Securities; (iii) the
Corporation, as Sponsor, shallpreferred securities;
- Independent will pay for allany and anyall costs, expenses and liabilities of
the Trusttrust, except the Trust's obligations of the trust to pay to holders of Trust
Securities under such Trust Securities;the
preferred securities the amounts due to the holders pursuant to the terms
of the preferred securities; and
(iv)- the Trust Agreementtrust will provide that the Trust is not authorized to engage in any activity that is not consistent with the
limited purposes thereof.
Enforcement Rights of Holders of Trust Preferred Securitiesthe trust.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Trust Preferred Securitypreferred security may institute a legal proceeding directly
against the CorporationIndependent to enforce its rights under the Guaranteeguarantee without first
instituting a legal proceeding against the Guarantee Trustee,guarantee trustee, the Trusttrust or any
other person or entity.person. A default or event of default under any Senior and Subordinated
Indebtednessof Independent's senior or
subordinated debt would not constitute a default or Eventevent of Defaultdefault under the
Trust
Agreement. However, intrust agreement. In
45
the event, however, of
74
payment defaults under, or acceleration of, Senior Indebtedness,Independent's
senior or subordinated debt, the subordination provisions of the Indenture willindenture
provide that no payments may be made in respect of the Junior Subordinated Debenturesdebentures until such Senior and
Subordinated Indebtedness hasthe
obligations have been paid in full or any payment default
thereunder has been cured or
waived. Failure to make required payments on Junior
Subordinated Debenturesthe debentures would constitute an
Eventevent of Defaultdefault under the Trust
Agreement.
Limited Purpose of the Trusttrust agreement.
LIMITED PURPOSE OF THE TRUST
The Trust Preferred Securities will representpreferred securities evidence preferred undivided beneficial interests
in the Trust, andassets of the Trusttrust. The trust exists for the sole purposeexclusive purposes of
issuing and selling the Trust Securities, usingtrust securities, investing the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debenturesthereof in debentures and
engaging in only those other activities necessary, advisable or incidental
thereto. A principal difference between the rights of a holder of a Trust Preferred Securitypreferred
security and the rights of a holder of a Junior Subordinated Debenturedebenture is that a holder of a
Junior Subordinated
Debenture will bedebenture is entitled to receive from the CorporationIndependent the principal amount of and
interest accrued on Junior Subordinated Debenturesdebentures held, while a holder of Trust
Preferred Securitiespreferred securities is
entitled to receive Distributionsdistributions from the Trusttrust (or in
certain circumstances, from the CorporationIndependent under the
Guarantee)guarantee) if and to the extent the Trusttrust has funds on hand legally available for the payment of
such
Distributions.
Rightsthe distributions.
RIGHTS UPON DISSOLUTION
Upon Termination
Unless the Junior Subordinated Debentures are distributed to holders of the
Trust Securities, upon any voluntary or involuntary termination, winding-up ordissolution of the trust involving the
liquidation of the Trust, after satisfaction of the liabilities of creditors of
the Trust as required by applicable law,debentures, the holders of the Trust Preferred
Securitiespreferred securities will be
entitled to receive, out of assets held by the Trust,trust, the Liquidation Distributionliquidation
distribution in cash. See "Description of Trustthe Preferred Securities
Liquidation of the Trust andSecurities--Liquidation
Distribution of Junior Subordinated Debentures."
Upon anyDissolution" on page 24. Upon Independent's voluntary or
involuntary liquidation or bankruptcy, of the Corporation,
the Property Trustee,property trustee, as holder of the
Junior Subordinated Debentures,debentures, would be a subordinated creditor of Independent's. Therefore, the
Corporation,property trustee would be subordinated in right of payment to all Seniorof
Independent's senior and Subordinated Indebtedness as set forth in the Indenture,subordinated debt, but is entitled to receive payment
in full of principal and interest before any stockholders of the CorporationIndependent's shareholders
receive payments or distributions. Since the
Corporation will beIndependent is the guarantor under the
Guaranteeguarantee and will agreehas agreed to pay for all costs, expenses and liabilities of the
Trust (othertrust other than the Trust's
obligations of the trust to pay to holders of the preferred
securities the amounts due to the holders pursuant to the terms of its Trust Securities),the preferred
securities, the positions of a holder of Trust Preferred Securitiesthe preferred securities and a holder
of Junior Subordinated Debenturesthe debentures relative to Independent's other creditors and to Independent's
stockholders of the Corporation in the event of liquidation or bankruptcy of the Corporation are expected to be
substantially the same.
7546
CERTAINMATERIAL FEDERAL INCOME TAX CONSEQUENCES
General
In the opinion of Elias, Matz, Tiernan & Herrick, L.L.P., special federal
income tax counsel to the Corporation and the Trust ("Tax Counsel"), theGENERAL
The following is a summary of certaindiscussion of the material United States federal income tax
considerations that may be relevant to the purchasers of the preferred
securities, insofar as the discussion relates to matters of law and legal
conclusions, represents the opinion of Kelley Drye & Warren LLP, special counsel
to Independent and the trust. An opinion of counsel is not binding on the
Internal Revenue Service ("IRS") or the courts. The conclusions expressed herein
are based upon current provisions of the Internal Revenue Code of 1986, as
amended, regulations thereunder and current administrative rulings and court
decisions, all of which are subject to change at any time, with possible
retroactive effect. Subsequent changes may cause tax consequences to vary
substantially from the consequences described below. Furthermore, the
authorities on which the following discussion is based are subject to various
interpretations, and it is therefore possible that the federal income tax
treatment of the purchase, ownership and disposition of Trust Preferred
Securities held as capital assets by a holder who purchases such Trust Preferred
Securities upon initial issuance. It does not deal with special classes of
holders such as banks, thrifts, real estate investment trusts, regulated
investment companies, insurance companies, dealers inpreferred securities or currencies,
tax-exempt investors, United States Alien Holders (as defined below) engaged in
a U.S. trade or business or persons that will holdmay
differ from the Trust Preferred
Securities as a position in a "straddle," as part of a "synthetic security" or
"hedge," as part of a "conversion transaction" or other integrated investment,
or as other than a capital asset. This summary also does not address the tax
consequences to persons that have a functional currency other than the U.S.
dollar or the tax consequences to shareholders, partners or beneficiaries of a
holder of Trust Preferred Securities. Further, it does not include any
description of any alternative minimum tax consequences or the tax laws of any
state or local government or of any foreign government that may be applicable to
the Trust Preferred Securities. This summary is based on the Code, Treasury
regulations thereunder and the administrative and judicial interpretations
thereof, as of the date hereof, all of which are subject to change, possibly on
a retroactive basis. An opinion of Tax Counsel is not binding on the IRS or the
courts.treatment described below. No rulings have been or are expected
to be sought from the IRS with respect to any of the transactions described
herein and no assurance can be given that the IRS will not take contrary
positions.positions or will not challenge, successfully or otherwise, the opinions
expressed herein.
No attempt is made in the following discussion to comment on all United
States federal income tax matters affecting purchasers of the preferred
securities. Moreover, the discussion generally focuses on holders of the
preferred securities who are United States persons who acquire the preferred
securities on their original issue at their initial offering price and hold the
preferred securities as capital assets. United States persons include (i) an
individual or resident of the United States; (ii) a corporation or partnership
created or organized in or under the laws of the United States, any state
thereof including the District of Columbia or any political subdivision thereof;
(iii) an estate the income of which is includable in its gross income for United
States federal income tax purposes without regard to its source; or (iv) a trust
if a court within the United States is able to exercise primary supervision over
its administration and at least one United States person has the authority to
control all substantial decisions of the trust. The discussion does not address
all the tax consequences that may be relevant to holders who may be subject to
special tax treatment, such as, nonresident aliens, banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors or persons that will hold the
preferred securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. The following discussion also does
not address the tax consequences to persons that have a functional currency
other than the U.S. dollar or the tax consequences to shareholders, partners or
beneficiaries of a holder of the preferred securities. Further, it does not
include any description of any alternative minimum tax consequences or the tax
laws of any state or local government or of any foreign government. An investor
should consult, and should rely exclusively on, the investor's own tax advisors
in analyzing the federal, state, local and foreign tax consequences of the
purchase, ownership or disposition of the preferred securities with regard to
the particular tax consequences specific to that investor, which may vary for
investors in different tax situations, and not addressed in the following
discussion.
CLASSIFICATION OF THE DEBENTURES
Kelley Drye & Warren LLP, special counsel for Independent and the trust, has
rendered its opinion, based on qualifications and assumptions contained therein,
that the debentures will be classified for federal income tax purposes as
Independent's indebtedness under current law, and, by acceptance of a preferred
security, you, as a holder, covenant to treat the debentures as indebtedness and
the preferred securities as evidence of an indirect beneficial ownership
interest in the debentures. Because there is no definitive test which
establishes whether a particular security is indebtedness or equity for United
States federal income tax purposes, no assurance can be given that the opinions expressed hereinthis position
will not be challenged by the IRS or, if challenged, that such a challenge wouldit will not be
successful. TheIf the debentures were treated as equity for United States federal
income tax discussion set forth below is included
for general information only and maypurposes, Independent would not be applicable depending uponentitled to deduct the interest
paid or accrued on the debentures for United States federal income tax purposes,
and such treatment could constitute a holder's
particular situation. Holders should consult theirTax Event. In addition, if the interest on
the debentures is not
47
deductible, it could adversely affect Independent's ability to make payments on
the debentures. The remainder of this discussion assumes that the debentures
will be classified for United States federal income tax advisors with respect to
the tax consequences to them of the purchase, ownershippurposes as
Independent's indebtedness.
CLASSIFICATION OF THE TRUST
Kelley Drye & Warren LLP, special counsel for Independent and disposition of the trust, preferred securities, including the tax consequences under state, local,
foreign and other tax laws and the possible effects of changes in united states
federal or other tax laws.
Classification of the Junior Subordinated Debentures
In connection with the issuance of the Junior Subordinated Debentures, Tax
Counsel will renderhas
rendered its opinion generally to the effect that, under then current law and assuming full compliance with
the terms of the Indenture (and certain
other documents),trust agreement and based on certain facts and assumptions contained in such
opinion,indenture, the Junior Subordinated Debentures will be classified for United States
federal income tax purposes as indebtedness of the Corporation. The Corporation,
the Trust and the holders of the Trust Preferred Securities (by acceptance of a
beneficial interest in a Trust Preferred Security) will agree to treat the
Junior Subordinated Debentures as indebtedness of the Corporation for all United
States federal income tax purposes.
76
Classification of the Trust
In connection with the issuance of the Trust Preferred Securities, Tax
Counsel will render its opinion generally to the effect that, under then current
law and assuming full compliance with the terms of the Trust Agreement and the
Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Trusttrust will be classified for
United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation. Accordingly, for United States federal
income tax purposes, eachyou, as a holder of Trust Preferred Securities generallythe preferred securities will be
considered
the owner oftreated as owning an undivided beneficial interest in the Junior Subordinated Debentures,debentures, and each holderyou
will be required to include in itsyour gross income any interest (or OID
accrued) with respect to
itsthe debentures at the time such interest is accrued or is received, with respect
to your pro rata share of the debentures in accordance with your method of
accounting. As discussed below, if the debentures were determined to be subject
to the original issue discount ("OID") rules, you, as a holder would instead be
required to include in your gross income any OID accrued on a daily basis with
respect to your allocable share of those Junior Subordinated
Debentures.
Interest Income and Original Issue Discountthe debentures whether or not cash was
actually distributed to you.
INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasuryapplicable treasury regulations, (the "Regulations") applicable
to debt instruments such as the
debentures, which are issued on or after August 13, 1996, a "remote" contingency
that stated interestat face value will not be timely paid will be ignored in determining
whether a debt instrument isconsidered issued with
OID. The Corporation believesOID, even if their issuer can defer payments of interest, if the likelihood of
any deferral is remote. Assuming the accuracy of the conclusion as set forth
below that the likelihood of its exercising itsIndependent's option to defer payments
of interest is "remote" since exercising that option would, among other things, preventremote, the Corporation from declaring dividends on any class of its equity securities.
Accordingly, the Corporation intends to take the position, based on the advice
of Tax Counsel, that the Junior Subordinated Debenturesdebentures will not be considered
to betreated as issued with OID and, accordingly,OID. Accordingly,
except as set forth below, stated interest on the Junior
Subordinated Debenturesdebentures generally will be
taxable to a holderincluded in your income as ordinary income at the time it is paid or accrued in
accordance with such holder'syour regular method of tax
accounting.
Under the Regulations,A debt instrument will generally be treated as issued with OID if the Corporation werestated
interest on the instrument does not constitute "qualified stated interest."
Qualified stated interest is generally any one of a series of stated interest
payments on an instrument that are unconditionally payable at least annually at
a single fixed rate. In determining whether stated interest on an instrument is
unconditionally payable and thus constitutes qualified stated interest, remote
contingencies as to exercisethe timely payment of stated interest are ignored. In the
case of the debentures, Independent has concluded that the likelihood of
exercising its option to defer payments of interest is remote. This is in part
because Independent pays dividends on its common stock and intends to continue
to do so, and, if it exercises its option to defer payments of interest,
Independent would be unable to continue paying these dividends, which could
adversely affect the Junior Subordinated Debenturesmarket for its common stock if it deferred payments under
the debentures.
The treasury regulations referred to above have not been interpreted by any
court decisions or addressed in any ruling or other pronouncements of the IRS
referred to above, and it is possible that the IRS could take a position
contrary to the conclusions herein.
If the likelihood that Independent would at that
timeexercise the option to defer any
payment of interest was determined not to be "remote" or if Independent actually
exercises its option to defer the payment of interest, the debentures would be
treated as issued with OID at the time of issuance or at the time of such
exercise, as the case may be, and all stated interest on the Junior
Subordinated Debentures would thereafter be
treated as OID as long as the Junior
Subordinated Debentures remaindebentures remained outstanding. In such event,
all of a holder'syour taxable interest income within respect of the debentures would
constitute OID that would accrue on a daily basis and be includable in your
income before the receipt of the cash attributable to the Junior Subordinated Debentures would
thereafter be accounted for on an economic accrual basissuch income, regardless of
such
holder'syour method of tax accounting, and actual distributions of stated interest would
not be reported separately as taxable income. Consequently, you, as a holder of
Trust
Preferred Securitiesthe preferred securities would be required to include such OID in gross income
OID even though the CorporationIndependent would not make any actual cash payments during an
Extension
Period. Moreover, under the Regulations, if the option to defer the payment of
interest was determined not to be "remote," the Junior Subordinated Debentures
would be treated as having been originally issued with OID. In such event, all
of a holder's taxable interest income with respect to the Junior Subordinated
Debentures would be accounted for on an economic accrual basis regardless of
such holder's method of tax accounting, and actual distributions of stated
interest would not be reported as taxable income.
77extension period.
48
The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to the interpretation described herein.
Because income on the Trust Preferred Securitiespreferred securities will constitute interest,
or OID, corporate holders of the Trust Preferred Securitiespreferred securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Trust Preferred Securities.
Receiptpreferred securities.
MARKET DISCOUNT AND ACQUISITION PREMIUM
Holders of Junior Subordinated Debenturespreferred securities other than a holder who purchased the
preferred securities upon original issuance or Cash Upon Liquidationwho purchased for a price other
than the first price at which a substantial amount of the Trust
The Corporation willpreferred securities
were sold for money other than to a bond house, broker, or other person acting
as an underwriter, placement agent or wholesaler may be considered to have
acquired their undivided interests in the right at any timedebentures with "market discount" or
"acquisition premium" as these phrases are defined for federal income tax
purposes. Such holders are advised to liquidateconsult their tax advisors as to the
Trustincome tax consequences of the acquisition, ownership and causedisposition of the
Junior Subordinated Debentures topreferred securities.
RECEIPT OF DEBENTURES OR CASH UPON DISSOLUTION OF THE TRUST
Under the circumstances described in "Description of the Preferred
Securities--Liquidation Distribution Upon Dissolution" on page 24, the
debentures may be distributed to the holders of the Trust Securities. Suchpreferred securities upon a
distribution, forliquidation of the trust. Under current United States federal income tax purposes,law,
such a distribution would be treated as a nontaxable event to eachthe holder and
eachwould result in the holder would receivehaving an aggregate tax basis in the Junior Subordinated Debenturesdebentures
received in the liquidation equal to suchthe holder's aggregate tax basis in its Trust Preferred Securities. A
holder's holding period in the
Junior Subordinated Debentures so received in
liquidation ofpreferred securities immediately before the Trust would include the period during which the Trust
Preferred Securities were held by such holder.
Under certain circumstances described herein (see "Description of Trust
Preferred Securities"), the Junior Subordinated Debentures may be redeemed for
cash and the proceeds of such redemption distributed to holders in redemption of
their Trust Preferred Securities. Such a redemption would, for United States
federal income tax purposes, constitute a taxable disposition of the redeemed
Trust Preferred Securities, and a holder could recognize gain or loss as if it
sold such redeemed Trust Preferred Securities for cash. See "--Sales of Trust
Preferred Securities."
Sales of Trust Preferred Securities
A holder that sells Trust Preferred Securities (including a redemption of
the Trust Preferred Securities by the Corporation) will recognize gain or loss
equal to the difference between its adjusted tax basis in the Trust Preferred
Securities and the amount realized on the sale of such Trust Preferred
Securities (other than with respect to accrued and unpaid interest which has not
yet been included in income, which will be treated as ordinary income).distribution. A holder's adjusted
tax basis in the Trust Preferred Securitiespreferred securities generally will be its initial purchase
price increased by OID, (if any)if any, previously includableincludible in suchthe holder's gross
income to the date of disposition and decreased by payments, (if any)if any, received on
the Trust Preferred Securitiespreferred securities in respect of OID. SuchOID to the date of disposition. A
holder's holding period in debentures received in liquidation of the trust would
include the period for which the holder held the preferred securities. If,
however, a Tax Event occurs resulting in the trust being treated as an
association taxable as a corporation, the distribution likely would constitute a
taxable event to holders of the preferred securities. Under circumstances
described herein, the debentures may be redeemed for cash and the proceeds of
the redemption distributed to holders in redemption of their preferred
securities. Under current law, such a redemption should constitute a taxable
disposition of the redeemed preferred securities and for United States federal
income tax purposes, and a holder should therefore recognize gain or loss as if
the holder sold the preferred securities for cash. Such holder would recognize
gain or loss in an amount equal to the difference between the cash received upon
redemption and the holders adjusted tax basis in the preferred securities.
DISPOSITION OF PREFERRED SECURITIES
A holder that sells preferred securities will recognize gain or loss equal
to the difference between the amount realized on the sale of the preferred
securities and the holder's adjusted tax basis in the preferred securities, as
defined above. A gain or loss of this kind will generally will be a capital gain or
loss and generally will be a long-term capital gain or loss if the Trust Preferred Securitiespreferred securities
have been held for more than one year.year at the time of sale.
The Trust Preferred Securitiespreferred securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures.debentures. A holder who uses the accrual method
of accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debenture are deemed to have been issued with OID)
78
whothat disposes of his Trust Preferred Securitiesits preferred securities between record
dates for payments of distributions thereon will be required to include accrued
but unpaid interest on the Junior Subordinated Debenturesdebentures through the date of disposition in income
as ordinary income, (i.e., interest or, if applicable, OID), and to add suchthe amount to hisits adjusted tax basis in his pro rataits
proportionate share of the underlying Junior
Subordinated Debenturesdebentures deemed disposed of. Any OID
included in income will increase a holder's adjusted tax basis as discussed
above. To the extent the selling price is less than the holder's adjusted tax
basis (which will include all accrued but
unpaid interest) a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
Proposed Tax Legislation
On February 6, 1997, as part of President Clinton's Fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation that would,
among other things, deny an issuer49
EFFECT OF POSSIBLE CHANGES IN TAX LAWS
In a deduction for United States federal income
tax purposes for the payment of interest on instruments with characteristics
similar to the Junior Subordinated Debentures. If the proposed legislation were
enacted in its current form, it is not expected to apply to the Junior
Subordinated Debentures since the proposed effective date for this provision is
the date of first committee action. There can be no assurances, however, that
the proposed legislation, if enacted, or similar legislation enacted after the
date hereof would not adversely affect the tax treatment of the Junior
Subordinated Debentures, resulting in a Tax Event. The occurrence of a Tax Event
may resultcase filed in the redemption ofU.S. Tax Court, Enron Corp. v. Commissioner, Tax
Court Docket No. 6149-98, the Junior Subordinated Debentures for cash, in
which eventIRS challenged the holders of the Trust Preferred Securities would receive cash in
redemption of their Trust Preferred Securities. See "Description of Trust
Preferred Securities--Redemption" and "Description of Junior Subordinated
Debentures--Special Event Prepayment."
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes.
A "U.S. Holder" is a holder of Trust Preferred Securities who or which is
(i) a citizen or individual resident (or is treated as a citizen or individual
resident) of the United Statesdeductibility for federal
income tax purposes (ii)of interest paid on securities which are similar, but not
identical, to the preferred securities. The parties filed a corporationstipulation of
settled issues, a portion of which stipulated that there shall be no adjustment
for the interest deducted by the taxpayer with respect to the securities. The
IRS may also challenge the deductibility of interest paid on the debentures,
which, if such challenge were litigated resulting in the IRS's position being
sustained, would trigger a Tax Event and possibly a redemption of the preferred
securities.
Accordingly, there can be no assurance that a Tax Event will not occur. A
Tax Event would permit Independent, upon approval of the Federal Reserve, if
then required, to cause a redemption of the preferred securities before, as well
as after, , 2006.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Interest paid, or, partnership createdif applicable, OID accrued, on the preferred securities
held of record by individual citizens or organized in or under the lawsresidents of the United States, or
any political subdivision thereof, (iii) an estate the income
of which is includable in its gross income for federal income tax purposes
without regard to its source or (iv) a trust over which (A) a court within the
United States is able to exercise primary supervision over the administration of
the trustcertain trusts, estates and (B) one or more United States trustees have the authority to
control all substantial decisions of the trust.
Under present United States federal income tax laws: (i) payments by the
Trust or any of its paying agents to any holder of a Trust Preferred Security
who or which is a United States Alien Holder will not be subject to United
States federal withholding tax; provided that, (a) the beneficial owner of the
Trust Preferred Security does not actually or constructively own 10 percent or
more of the total combined voting power of all classes of stock of the
Corporation
79
entitled to vote, (b) the beneficial owner of the Trust Preferred Security is
not a controlled foreign corporation that is related to the Corporation through
stock ownership, and (c) either (A) the beneficial owner of the Trust Preferred
Security certifies to the Trust or its agent, under penalties of perjury, that
it is not a United States holder and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"Financial Institution"), and holds the Trust Preferred Security in such
capacity, certifies to the Trust or its agent, under penalties of perjury, that
such statement has been received from the beneficial owner by it or by a
Financial Institution between it and the beneficial owner and furnishes the
Trust or its agent with a copy thereof; and (ii) a United States Alien Holder of
a Trust Preferred Security will not be subject to United States federal
withholding tax on any gain realized upon the sale or other disposition of a
Trust Preferred Security.
As discussed above, changes in legislation affecting the United States
federal income tax treatment of the Junior Subordinated Debentures are possible,
and could adversely affect the ability of the Corporation to deduct the interest
payable on the Junior Subordinated Debentures. Moreover, any such legislation
could adversely affect United States Alien Holders by characterizing income
derived from the Junior Subordinated Debentures as dividends, generally subject
to a 30% income tax (on a withholding basis) when paid to a United States Alien
Holder, rather than as interest which, as discussed above, is generally exempt
from income tax in the hands of a United States Alien Holder.
Information Reporting to Holders
Generally, income on the Trust Preferred Securitiespartnerships, will be reported to holdersthe IRS on Forms
1099,1099-INT, or, where applicable, Forms 1099-OID, which forms should be mailed to
the holders of Trust
Preferred Securities by January 31 following each calendar year.
Backup Withholding Payments made on, and
proceeds from the sale of, the Trust Preferred
Securitiespreferred securities may be subject to a "backup"
withholding tax of 31 percent(currently at 30.5%) unless the holder complies with certain
identification and other backup withholding requirements. Any amounts withheld
amountsunder the backup withholding rules will be allowed as a credit against the
holder's United States federal income tax liability, provided the required information is
provided to the IRS.
80
Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE MAY BE
INAPPLICABLE TO A PARTICULAR SITUATION OF A HOLDER OF THE PREFERRED SECURITIES.
HOLDERS OF PREFERRED SECURITIES SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT
TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF
THE PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE,
INDEPENDENT, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
UNITED STATES OR OTHER TAX LAWS PARTICULARLY SINCE TAX CONSEQUENCES WILL VARY
FOR INVESTORS IN DIFFERENT TAX SITUATIONS.
ERISA CONSIDERATIONS
EachEmployee benefit plans that are subject to the Employee Retirement Income
Security Act of 1974 ("ERISA"), or Section 4975 of the Corporation (the obligor with respectInternal Revenue Code,
generally may purchase preferred securities, subject to the Junior
Subordinated Debentures heldinvesting
fiduciary's determination that the investment in preferred securities satisfies
ERISA's fiduciary standards and other requirements applicable to investments by
the Trust), andplan.
In any case, Independent and/or any of its affiliates and the Property
Trustee may be considered a
"party in interest" (within the meaning of ERISA) or a "disqualified person"
(within the meaning of Section 4975 of the Internal Revenue Code) with respect
to many Plans thatcertain plans. These plans generally include plans maintained or sponsored
by, or contributed to by, any such persons with respect to which Independent or
any of its affiliates are subject to ERISAa fiduciary or plans for which Independent or any of
its affiliates provide services. The acquisition and certain employee
benefit-related provisionsownership of the Code. The purchase and/or holding of Trust
Preferred Securitiespreferred
securities by a Plan that is subject to the fiduciary responsibility
provisions of ERISA or the prohibited transaction provisions of Section 4975 of
the Code (includingplan (or by an individual retirement arrangements andarrangement or other plans
described in Section 4975(e)(1) of the Internal Revenue Code) and with respect to
which the Corporation,
the Property TrusteeIndependent or any affiliate is a service provider (or otherwise isof its affiliates are considered a party in interest or
a disqualified person)person may constitute or result in a prohibited transaction under
ERISA or Section 4975 of the Internal Revenue Code, unless such
Trust Preferred Securitiesthe preferred
securities are acquired pursuant to and in accordance with an applicable
exemption, such as Prohibited Transaction Class Exemption ("PTCE")
84-14 (an exemption for certain transactions determined by an independent
qualified professional asset manager), PTCE 91-38 (an exemption for certain
transactions involving bank collective investment funds), PTCE 90-1 (an
exemption for certain transactions involving insurance company pooled separate
accounts), PTCE 95-60 (an exemption for transactions involving certain insurance
company general accounts) or PTCE 96-23 (an exemption for certain transactions
determined by an in-house asset manager). In addition,exemption.
As a Plan fiduciary
considering the purchase of Trust Preferred Securities should be aware that the
assets of the Trust may be considered "plan assets" for ERISA purposes. In such
event, any persons exercising discretionresult, plans with respect to the Junior Subordinated
Debentures may become fiduciary partieswhich Independent or any of its
affiliates is a party in interest or a disqualified personsperson should not acquire
preferred securities unless the preferred securities are acquired pursuant to
and in accordance with respectan applicable exemption. Any other plans or other
entities whose assets include plan assets subject to investing Plans. In order to avoid certain prohibited transactions
under ERISA and the Code that could thereby result, each investing Plan, by
purchasing the Trust Preferred Securities, will be deemed to have directed the
Trust to invest in the Junior Subordinated Debentures and to have consented to
the appointmentor Section 4975 of
the Property Trustee. In this regard, it should be noted
that, in an Event of Default, the Corporation may not remove the Property
Trustee without the approval of a majority of the holders of the Trust Preferred
Securities. Further, prior to an Event of Default with respect to the Junior
Subordinated Debentures, the Property Trustee will have only limited custodial
and ministerial authority with respect to Trust assets.
A Plan fiduciary should consider whether the purchase of Trust Preferred
Securities could result in a delegation of fiduciary authority to the Property
Trustee, and, if so, whether such a delegation of authority is permissible under
the Plan's governing instrument or any investment management agreement with the
Plan. In making such determination, a Plan fiduciary should note that the
Property Trustee is a U.S. bank qualified to be an investment manager (within
the meaning of Section 3(38) of ERISA) for the purposes of delegation of
authority under ERISA.
The sale of investments to plans is in no respect a representation by the
trust, the corporation, the property trustee, the Underwriters or any other
person associated with the sale of the Trust Preferred Securities that such
securities meet all relevant legal requirements with respect to investments by
plans generally or any particular plan, or that such securities are otherwise
appropriate for plans generally or any particular plan. Any
81
purchaserInternal Revenue Code proposing to acquire Trust Preferred Securities with assets of any
planpreferred securities should
consult with itstheir own counsel.
8250
UNDERWRITING
Legg Mason Wood Walker, Incorporated, and Piper Jaffray Inc. (the
"Underwriters"), haveas underwriter, has agreed, subject to
the terms and conditions of an
Underwriting Agreement to be entered into by the Underwriters, the Corporationits underwriting agreement with Independent and the
Trusttrust, to purchase from the Trusttrust 1,000,000 Trust Preferred Securities.preferred securities at the initial
public offering price less the underwriting commission set forth on the cover
page of this prospectus.
The Underwriters have committedunderwriting agreement provides that the obligations of the underwriter
are subject to purchasecertain conditions, and pay forthat if any of the foregoing preferred
securities are purchased by the underwriter pursuant to the underwriting
agreement, all such Trust Preferred
Securities if any aresecurities must be so purchased. The Underwriters have advisedunderwriter may reject
orders in whole or in part and withdraw, cancel, or modify the Corporationoffer without
notice. Independent and the Trusttrust have each agreed to indemnify the underwriter
and their controlling persons against certain liabilities including liabilities
under the Securities Act of 1933 or to contribute to payments the underwriter
may be required to make in respect thereof.
The underwriter may also impose a penalty bid on certain selling group
members. This means that if the underwriter purchases preferred securities in
the open market to reduce the underwriter's short position or to stabilize the
price of the preferred securities, it may reclaim the amount of the selling
concession from the selling group members who sold those preferred securities as
part of the offering.
The underwriter may create a "short position" in the preferred securities in
connection with the offering, which means that they proposemay over-allot or sell more
shares than are set forth on the cover page of this prospectus. If the
underwriter creates a short position by such over-allotment, then the
underwriter may reduce that short position by purchasing preferred securities in
the open market. In general, purchases of a security for the purpose of
stabilization or to reduce a short position could cause the price of security to
be higher than it might otherwise be in the absence of such purchases. The
imposition of a penalty bid might also have an effect on the price of a security
to the extent that it were to discourage resales of the security.
The underwriter has advised Independent and the trust that it proposes to
offer the Trust Preferred Securitiespreferred securities directly to the public initially at the public
offering price set forth on the cover page of this Prospectusprospectus and to certain
dealers at such price less a concession not in excess of $ per Trust Preferred Security.preferred
security. The Underwritersunderwriter may allow and such dealers may reallow a concession
not in excess of $ per Trust Preferred Securitypreferred security to certain other brokers and dealers.
After the public offering, the public offering price, concession and
reallowance, and other selling terms may be changed by the Underwriters.underwriter.
In view of the fact that the proceeds from the sale of the Trust Preferred
Securitiespreferred
securities will be used to purchase the Junior Subordinated Debenturesdebentures issued by Independent, the
Corporation, the Underwriting Agreementunderwriting agreement provides that the CorporationIndependent will pay as compensation for
the Underwriters'underwriter's arranging the investment therein of such proceeds an amount of
$cash equal to $0.9375 per Trust Preferred Security.
The Trust has grantedpreferred security, or $937,500 in the aggregate. This
compensation paid per share to the Underwriters an option, exercisable for 30
days fromunderwriter is equal to the date of this Prospectus, to purchase up to an additional 150,000
Trust Preferred Securities atdifference
between the public offering price set forth onand the cover
page hereof lessamount paid per share by the
underwriters for such securities.
Independent estimates that it will spend approximately $275,000 for
printing, depository and trustees' fees, legal and accounting fees, and other
expenses of the offering in addition to underwriting discounts. The Underwriters may exercise suchcompensation.
Both Independent and the trust have agreed in the underwriting agreement
that, subject to certain conditions, prior to 90 days following the date of
issuance of the preferred securities, neither Independent nor the trust will,
directly or indirectly, issue, sell, offer or agree to sell, grant any option
to purchase additional Trust Preferred Securities solely for the purpose
of covering over-allotments, if any, incurred in the sale of, or otherwise dispose of, preferred securities, any securities
convertible into, exchangeable or exercisable for preferred securities or the
Trust Preferred
Securities.
To the extent that the Underwriters exercise their option to purchase
additional Trust Preferred Securities, the Trust will issue and selldebentures or any debt securities substantially similar to the Corporation additional Commondebentures or any
equity security substantially similar to the preferred securities, except with
the prior written consent of the underwriter, and except for any disposal of
debentures following a liquidation of the trust.
51
Because the National Association of Securities Dealers, Inc. (the "NASD")
may view the preferred securities as interests in a direct participation
program, the offer and sale of the preferred securities is being made in
compliance with the applicable provisions of Rule 2810 of the NASD's Conduct
Rules.
LEGAL MATTERS
Certain legal matters, including matters relating to federal income tax
considerations, for Independent and the Corporationtrust will issue and sellbe passed upon by Kelley
Drye & Warren LLP, Vienna, Virginia, counsel to the Trust Junior Subordinated Debentures in an aggregate principal amount
equal to the total aggregate Liquidation Amount of the additional Trust
Preferred Securities being purchased pursuant to the optionIndependent and the additional
Common Securities.
Each of the Corporation and the Trust has agreed to indemnify the
Underwriters and their controlling persons against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribute to payments the Underwriters may be required to made in respect
thereof.
The Underwriters have advised the Trust that they do not intend to confirm
sales to any account over which they exercise discretionary authority in excess
of 5% of the number of Trust Preferred Securities offered hereby.
In connection with this offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the Trust
Preferred Securities. Specifically, the Underwriters may overallot the offering,
creating a syndicate short position. In addition, the Underwriters may bid for
and purchase Trust Preferred Securities in the open market to stabilize
83
the price of the Trust Preferred Securities. These activities may stabilize or
maintain the market price of the Trust Preferred Securities above independent
market levels. The Underwriters are not required to engage in these activities,
and may end these activities at any time.
LEGAL MATTERStrust.
Certain legal matters will be passed upon for the Corporationunderwriter by Elias,
Matz, TiernanThacher
Proffitt & Herrick L.L.P.,Wood, Washington D.C., Kelley Drye & Warren LLP and forThacher
Proffitt & Wood will rely on the Underwriters by
Skadden, Arps, Slate, Meagheropinion of Richards, Layton & Flom LLP. CertainFinger, P.A. as
to matters of Delaware law
relating to the validitylaw. As of the Trust Preferred Securities will be passed upon
on behalfdate of this prospectus, certain members
of Kelley Drye & Warren LLP owned in the Trust by Skadden, Arps, Slate, Meagher & Flom (Delaware),
special Delaware counsel to the Trust. Certain matters relating to United States
federal income tax considerations will be passed upon for the Corporation by
Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C.
INDEPENDENT PUBLIC ACCOUNTANTS
Theaggregate approximately 10,000 shares
of Independent's common stock.
EXPERTS
Independent's consolidated financial statements as of Independent Bank Corp.December 31, 2000 and
subsidiaryfor each of the three years in the period ended December 31, 2000, incorporated
by reference in the Corporation's Annual Report on Form
10-K for the year ended December 31, 1996 and incorporated by reference in this
Prospectusherein, have been audited by Arthur Andersen LLP, independent
public accountants, as stated in their report appearing therein.
84
================================================================================
No dealer, salesperson orwith respect thereto, and are
included therein in reliance upon the authority of said firm as experts in
giving said report.
WHERE YOU CAN GET MORE INFORMATION
This prospectus is a part of a Registration Statement on Form S-3 filed by
Independent and the trust with the Securities and Exchange Commission under the
Securities Act of 1933, with respect to the preferred securities, the debentures
and the guarantee. This prospectus does not contain all the information set
forth in the registration statement, certain parts of which are omitted in
accordance with the rules and regulations of the Securities and Exchange
Commission. For further information with respect to Independent and the
securities offered by this prospectus, reference is made to the registration
statement. Statements contained in this prospectus concerning the provisions of
such documents are necessarily summaries of such documents and each such
statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Securities and Exchange Commission.
Independent files periodic reports, proxy statements and other individual has been authorizedinformation
with the Securities and Exchange Commission. Independent's filings are available
to give anythe public over the Internet at the Securities and Exchange Commission's
website at http://www.sec.gov. You may also inspect and copy these materials a
the public reference facilities of the Securities and Exchange Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Copies of such material
can be obtained at prescribed rates from the Public Reference Section of the
Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information.
Each holder of the trust securities will receive a copy of Independent's
annual report at the same time as Independent furnishes the annual report to the
holders of its common stock.
Independent "incorporates by reference" into this prospectus the information
orit files with the Securities and Exchange Commission, which means that
Independent can disclose important information to make any representations other thanyou by referring you to those
contained ordocuments. The information incorporated by reference inis an important part of
this Prospectus in connectionprospectus and information that Independent files subsequently with the
offer madeSecurities and Exchange Commission will automatically update this prospectus.
Independent incorporates by reference the documents listed below and any filings
Independent makes with the Securities and Exchange Commission under Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act, after the initial filing of the
registration statement that contains this prospectus and prior to the time that
Independent sells all the securities offered by this Prospectusprospectus:
- Annual Report on Form 10-K for the year ended December 31, 2000.
52
- Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001,
June 30, 2001 and if givenSeptember 30, 2001.
You may request a copy of these filings (other than an exhibit to a filing
unless that exhibit is specifically incorporated by reference into that filing)
at no cost, by writing to or made, such information or representations
must not be relied upon as having been authorized bytelephoning Independent at the Corporation, the Trust
or the Underwriters. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create an implication that there has
been no change in the affairs of the Corporation or the Trust since the date
hereof. This Prospectus does not constitute an offer or solicitation by anyone
in any jurisdiction in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or
to anyone to whom it is unlawful to make such offer or solicitation.
___________
TABLE OF CONTENTS
Page
----
Available Information..............................................
Incorporation of Certain Documents by
Reference.........................................................
Summary............................................................
Risk Factors.......................................................
Independent Bank Corp..............................................
Use of Proceeds....................................................
Ratios of Earnings to Fixed Charges................................
Capitalization.....................................................
Accounting Treatment...............................................
Recent Developments................................................
Selected Consolidated Financial Data...............................
Management of Independent and the Bank.............................
Independent Capital Trust I........................................
Description of Trust Preferred Securities..........................
Description of Junior Subordinated Debentures......................
Description of Guarantee...........................................
Book-Entry Issuance................................................
Relationship Among the Trust Preferred
Securities, the Junior Subordinated
Debentures and the Guarantee......................................
Certain Federal Income Tax Consequences............................
ERISA Considerations...............................................
Underwriting.......................................................
Legal Matters......................................................
Independent Public Accountants.....................................
Until , 1997 (25 days after the date of this prospectus), all dealers
effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
================================================================================
================================================================================following address:
288 Union Street, Rockland, Massachusetts 02370, Attention: Corporate Clerk,
telephone (781) 878-6100.
53
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1,000,000 TRUST PREFERRED SECURITIES
INDEPENDENT CAPITAL TRUST I
_____% Trust Preferred Securities
fully and unconditionally guaranteed,
as described herein, by
Independent Bank Corp.
----------
Prospectus
----------III
% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER TRUST PREFERRED SECURITY)
FULLY, IRREVOCABLY AND UNCONDITIONALLY
GUARANTEED ON A SUBORDINATED BASIS,
AS DESCRIBED IN THIS PROSPECTUS, BY
[LOGO]
------------------
PROSPECTUS
------------------
Legg Mason Wood Walker
Incorporated
Piper Jaffray Inc.
______ __, 1997
================================================================================, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ItemITEM 14. Other Expenses of Issuance and Distribution.OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
SEC registration fee..................... $ 8,713fee........................................ 6,000
NASD fee.................................fee....................................................
Nasdaq fees..............................fees................................................. 5,000
Legal fees and expenses..................................... 109,000*
Trustees' fees and expenses..............
Legal fees and expenses.................. *
Blue Sky fees and expenses............... *expenses................................. 10,000*
Accounting fees and expenses............. *expenses................................ 50,000*
Printing expenses........................ *expenses........................................... 70,000*
Miscellaneous expenses...................expenses...................................... *
--------
Total.................................. $
--------
--------Total................................................... $275,000*
========
_________________- ------------------------
* Estimated.
ItemITEM 15. Indemnification of Directors and Officers.INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 67 of the Massachusetts Business Corporation Law ("MBCL") sets forth
certain circumstances under which directors, officers, employees and agents may
be indemnified against liability which they may incur in their capacity as such.
Section 67 of the MBCL provides as follows:
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, ETC.--Indemnification
of directors, officer,officers, employees and other agents of a corporation and
persons who serve at its request as directors, officers, employees or other
agents of another organization or who serve at its request in any capacity
with respect to any employee benefit plan, may be provided by it to whatever
extent shall be specified in or authorized by (i) the articles of
organization or (ii) a by-law adopted by the stockholders or (iii) a vote
adopted by the holders of a majority of the shares of stock entitled to vote
on the election of directors. Except as the articles of organization or
by-laws otherwise require, indemnification of any persons referred to in the
preceding sentence who are not directors of the corporation may be provided
by it to the extent authorized by the directors. Such indemnification may
include payment by the corporation of expenses incurred in defending a civil
or criminal action or proceeding in advance of the final disposition of such
action or proceeding, upon receipt of an undertaking by the person
indemnified to repay such payment if he shall be adjudicated to be not
entitled to indemnification under this section which undertaking may be
accepted without reference to the financial ability of such person to make
repayment. Any such indemnification may be provided although the person to
be indemnified is no longer an officer, director, II-1
employee or agent of the
corporation or of such other organization or no longer serves with respect
to any such employee benefit plan.
No indemnification shall be provided for any person with respect to any
matter as to which he shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the corporation or to the extent that such matter relatesrelated to service
with respect to an employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan.
The absence of any express provision for indemnification shall not limit any
right of indemnification existing independently of this section.
A corporation shall have power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or other agent of the
corporation, or is or was serving at the
II-1
request of the corporation as a director, officer, employee or other agent of
another organization or with respect to any employee benefit plan against any
liability incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability.
Article TwelfthTwelve of the Company'sIndependent's By-laws, entitled "Indemnification of
Directors, Officers and Others," provides as follows:
The corporation shall, to the extent legally permissible, indemnify any
person serving on who has served (i) as a Director or officer of the
corporation, or (ii) at its request as a Director, trustee, officer,
employee or other agent of another organization, or (iii) at its request in
any capacity with respect to any employee benefit plan; against all
liabilities and expenses including amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees
reasonably incurred by him or her in connection with the defense or
disposition of any action, suit or other proceeding, whether civil, criminal
or administrative, in which he or she may be involved or with which he or
she may be threatened, while serving or thereafter, by reason of his or her
being or having been such a Director, officer, trustee, employee or agent,
except with respect to any matter as to which he or she shall have been
adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that his or her action was in the best interests of the
corporation or to the extent that such matter relates to services with
respect to an employee benefit plan, in the best interest of the
participants or beneficiaries of such employee benefit plan; provided,
however, that as to any matter disposed of by a compromise payment by such
Director, officer, trustee, employee or agent, pursuant to a consent decree
or otherwise, no indemnification either for said payment or for any other
expenses shall be provided unless:
II-2
(a) such compromise shall be approved as having been in the best
interests of the corporation or employee benefit plan participants or
beneficiaries, as the case may be, after notice that it involves such
indemnification:
(i) by a disinterested majority of the Directors then in office; or
(ii) by the holders of a majority of the outstanding stock by the
time entitled to vote for Directors, voting as a single class, exclusive
of any stock owned by any interested Director or officer; or
(b) in the absence of action by disinterested Directors or stockholders,
there has been obtained at the request of a majority of the Directors then
in office an opinion in writing of independent legal counsel to the effect
that such Director or officer appears to have acted in good faith in the
reasonable belief that his or her action was in the best interests of the
corporation or employee benefit plan participants or beneficiaries, as the
case may be.
Expenses including counsel fees, reasonably incurred by any such Director,
officer, trustee, employee or agent in connection with the defense or
disposition of any such action, suit or other proceeding may be paid from time
to time by the corporation in advance of the final disposition thereof upon
receipt of an undertaking by such individual to repay the amounts so paid to the
corporation if it is ultimately determined that indemnification for such
expenses is not authorized under this section. The right of indemnification
hereby provided shall not be exclusive of or affect any other rights to which
any such Director, officer, trustee, employee or agent may be entitled. Nothing
contained in this Article shall affect any rights to indemnification to which
corporate personnel other than such Directors, officers, trustee, employees or
agents may be entitled by contract or otherwise under law. As used in this
Article the terms "Director," "officer," "trustee," "employee," and "agent"
include their respective heirs, executors and administrators, and an
"interested" Director, officer, trustee, employee or agent is one against whom
in such capacity the proceedings in question or other proceeding on the same or
similar grounds is then pending.
II-3II-2
ItemITEM 16. Exhibits and Financial Statement SchedulesEXHIBITS
Exhibit No. DescriptionEXHIBIT NO. DESCRIPTION
- ----------- -----------
1 Form of Underwriting AgreementAgreement*
4.1 Form of Indenture of the CorporationRegistrant relating to the Junior
Subordinated DebenturesDebentures*
4.2 Form of Certificate of Junior Subordinated Debenture
(included as Exhibit A to Exhibit 4.1)*
4.3 Certificate of Trust of Independent Capital Trust IIII*
4.4 Amended and RestatedForm of Declaration of Trust of Independent Capital Trust
IIII*
4.5 Form of Amended and Restated Declaration of Trust for
Independent Capital Trust III*
4.6 Form of Preferred Security Certificate for Independent
Capital Trust IIII (included as Exhibit AD to Exhibit 4.4)
4.64.5)*
4.7 Form of Preferred Securities Guarantee Agreement of
the Corporation relatingIndependent Capital Trust III*
5.1 Opinion of Kelley Drye & Warren LLP as to the Trust
Preferred Securities
5.1 Opinion and consent of Elias, Matz, Tiernan & Herrick L.L.P. as to legality of
the Junior Subordinated Debentures and the Guarantee to be
issued by the Corporation*Independent Bank Corp.
5.2 Opinion of Skadden, Arps, Slate, MeagherRichards, Layton & Flom LLPFinger, P.A. as to the
legality of the Trust Preferred Securities to be issued by
Independent Capital Trust I*
8III*
8.1 Opinion of Elias, Matz, TiernanKelley Drye & Herrick L.L.P.Warren LLP as to certain federal
income tax matters*
12.1 Computation of ratio of earnings to fixed charges (excluding
interest on deposits)
12.2 Computation of ratio of earnings to fixed charges (including
interest on deposits)matters
23.1 Consent of Arthur AndersonAndersen LLP
23.2 Consent of Elias, Matz, TiernanKelley Drye & Herrick L.L.P.Warren LLP (included in Exhibit 5.1)*
23.3Exhibits
5.1 and 8)
23.4 Consent of Skadden, Arps, Slate, MeagherRichards, Layton & Flom LLPFinger, P.A. (included in
Exhibit 5.2)*
24 Power of Attorney of certain officers, directors and
directorstrustees of the
CorporationIndependent Bank Corp. and Independent Capital
Trust III, respectively (located on the signature pagepages
hereto)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the IndentureIndenture*
25.2 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Declaration of Trust of Independent
Capital Trust IIII*
25.3 Form T-1 Statement of Eligibility of The Bank of New York
under the Guarantee Agreement for the benefit of the holders
of the Trust
Preferred SecuritiesSecurities*
- ----------------------------------------
* To bePreviously filed
by amendment.
II-4
ItemITEM 17. UndertakingsUNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of each
undersigned Registrant pursuant to the provisions, or otherwise, each Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by each undersigned Registrant of
expenses incurred or paid by a director, officer of controlling person of each
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, each Registrant will, unless in the opinion of its
counsel the matter has been settled by the
II-3
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this registration
statement as of the time it was declared effective.
For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Independent Bank
Corp. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Rockland, State of Massachusetts, on the 24th30th
day of April 1997.
INDEPENDENT BANK CORP.
By: /s/ John F. Spence, Jr.
-------------------------------
John F. Spence, Jr.November 2001.
INDEPENDENT BANK CORP.
By: /s/ DOUGLAS H. PHILIPSEN*
-----------------------------------------
Douglas H. Philipsen
Chairman of the Board, and Chief Executive
Officer and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Each of the directors and/or officers
of Independent Bank Corp. whose signature appears below hereby appoints John
F. Spence, Jr., Douglas H. Philipsen and Richard J. Seaman, and each of them
severally, as his or her attorney-in-fact to sign in his or her name and
behalf, in any and all capacities stated below and to file with the
Securities and Exchange Commission any and all amendments, including
post-effective amendments, to this Registration Statement on Form S-3, making
such changes in the Registration Statement as appropriate, and generally to
do all such things in their behalf in their capacities as directors and/or
officers to enable Independent Bank Corp. to comply with the provisions of
the Securities Act of 1933, and all requirements of the Securities and
Exchange Commission.
/s/ Richard S. Anderson
- ------------------------------ Date: April 24, 1997
Richard S. Anderson
Director
/s/ Donald K. Atkins
- ----------------------------- Date: April 24, 1997
Donald K. Atkins
Director
/s/ W. Paul Clark
- ----------------------------- Date: April 24, 1997
W. Paul Clark
SIGNATURE TITLE DATE
--------- ----- ----
/s/ DOUGLAS H. PHILIPSEN* Chairman of the Board,
------------------------------------------- Chief Executive Officer November 30, 2001
Douglas H. Philipsen and President
/s/ RICHARD S. ANDERSON*
------------------------------------------- Director November 30, 2001
Richard S. Anderson
/s/ W. PAUL CLARK*
------------------------------------------- Director November 30, 2001
W. Paul Clark
/s/ ROBERT L. CUSHING*
------------------------------------------- Director November 30, 2001
Robert L. Cushing
/s/ ALFRED L. DONOVAN*
------------------------------------------- Director November 30, 2001
Alfred L. Donovan
/s/ BENJAMIN A. GILMORE II*
------------------------------------------- Director November 30, 2001
Benjamin A. Gilmore II
/s/ E. WINTHROP HALL*
------------------------------------------- Director November 30, 2001
E. Winthrop Hall
II-5
SIGNATURE TITLE DATE
--------- ----- ----
/s/ KEVIN J. JONES*
------------------------------------------- Director November 30, 2001
Kevin J. Jones
/s/ LAWRENCE M. LEVINSON*
------------------------------------------- Director November 30, 2001
Lawrence M. Levinson
/s/ RICHARD H. SGARZI*
------------------------------------------- Director November 30, 2001
Richard H. Sgarzi
/s/ WILLIAM J. SPENCE*
------------------------------------------- Director November 30, 2001
William J. Spence
/s/ JOHN H. SPURR JR.*
------------------------------------------- Director November 30, 2001
John H. Spurr Jr.
/s/ ROBERT D. SULLIVAN*
------------------------------------------- Director November 30, 2001
Robert D. Sullivan
/s/ BRIAN S. TEDESCHI*
------------------------------------------- Director November 30, 2001
Brian S. Tedeschi
/s/ THOMAS J. TEUTEN*
------------------------------------------- Director November 30, 2001
Thomas J. Teuten
/s/ DENIS K. SHEAHAN
------------------------------------------- Chief Financial Officer and November 30, 2001
Denis K. Sheahan Treasurer
*By: /s/ DENIS K. SHEAHAN
--------------------------------------
Denis K. Sheahan
PURSUANT TO POWER OF ATTORNEY DATED
NOVEMBER 1, 2001
II-6
- ----------------------------- Date: April __, 1997
Robert L. Cushing
Director
- ----------------------------- Date: April __, 1997
Benjamin A. Gilmore, II
Director
/s/ Lawrence M. Levinson
- ----------------------------- Date: April 24, 1997
Lawrence M. Levinson
Director
/s/ Douglas H. Philipsen
- ----------------------------- Date: April 24, 1997
Douglas H. Philipsen
Director and President
/s/ Richard H. Sgarzi
- ----------------------------- Date: April 24, 1997
Richard H. Sgarzi
Director
/s/ John F. Spence, Jr.
- ----------------------------- Date: April 24, 1997
John F. Spence, Jr.
Chairman of the Board and
Chief Executive Officer
(principal executive officer)
/s/ Robert J. Spence
- ----------------------------- Date: April 24, 1997
Robert J. Spence
Director
/s/ William J. Spence
- ----------------------------- Date: April 24, 1997
William J. Spence
Director
/s/ Brian S. Tedeschi
- ----------------------------- Date: April 24, 1997
Brian S. Tedeschi
Director
/s/ Thomas J. Teuten
- ----------------------------- Date: April 24, 1997
Thomas J. Teuten
Director
II-7
/s/ Richard J. Seaman
- ----------------------------- Date: April 24, 1997
Richard J. Seaman
Chief Financial Officer and Treasurer
(principal financial and accounting officer)
Pursuant to the requirements of the Securities Act of 1933, Independent
Capital Trust IIII certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Rockland, State of Massachusetts, on the 24th30th day of April 1997.
INDEPENDENT CAPITAL TRUST I
By: /s/ Douglas H. Philipsen
-----------------------------
Douglas H. PhilipsenNovember 2001.
INDEPENDENT CAPITAL TRUST III
By: /s/ EDWARD H. SEKSAY
-----------------------------------------
Edward H. Seksay
Administrative Trustee
By: /s/ ANTHONY W. DIROBBIO
-----------------------------------------
Anthony W. DiRobbio
Administrative Trustee
By: /s/ DENIS K. SHEAHAN
-----------------------------------------
Denis K. Sheahan
Administrative Trustee
By: /s/ Richard J. Seaman
-----------------------------
Richard J. Seaman
Administrative Trustee
By: /s/ Russell N. Viau
-----------------------------
Russell N. Viau
Administrative Trustee
II-8
II-7
EXHIBIT INDEX
Exhibit No. DescriptionEXHIBIT NO. DESCRIPTION
- ----------- -----------
1 Form of Underwriting AgreementAgreement*
4.1 Form of Indenture of the CorporationRegistrant relating to the Junior
Subordinated DebenturesDebentures*
4.2 Form of Certificate of Junior Subordinated Debenture
(included as Exhibit A to Exhibit 4.1)*
4.3 Certificate of Trust of Independent Capital Trust IIII*
4.4 Form of Declaration of Trust of Independent Capital Trust
III*
4.5 Form of Amended and Restated Declaration of Trust of
Independent Capital Trust I
4.5III*
4.6 Form of Trust Preferred Security Certificate for Independent
Capital Trust IIII (included as Exhibit AD to Exhibit 4.4)
4.64.5)*
4.7 Form of Preferred Securities Guarantee Agreement of
the Corporation relatingIndependent Capital Trust III*
5.1 Opinion of Kelley Drye & Warren LLP as to the Trust
Preferred Securities
5.1 Opinion and consent of Elias, Matz, Tiernan & Herrick L.L.P. as to legality of
the Junior Subordinated Debentures and the Guarantee to be
issued by the Corporation*Independent Bank Corp.
5.2 Opinion of Skadden, Arps, Slate, MeagherRichards, Layton & Flom LLPFinger, P.A. as to the
legality of the Trust Preferred Securities to be issued by
Independent Capital Trust I*
8III*
8.1 Opinion of Elias, Matz, TiernanKelley Drye & Herrick L.L.P.Warren LLP as to certain federal
income tax matters*
12.1 Computation of ratio of earnings to fixed charges (excluding
interest on deposits)
12.2 Computation of ration of earnings to fixed charges (including
interest on deposits)matters
23.1 Consent of Arthur AndersonAndersen LLP
23.2 Consent of Elias, Matz, TiernanKelley Drye & Herrick L.L.P.Warren LLP (included in Exhibit 5.1)*
23.3Exhibits
5.1 and 8)
23.4 Consent of Skadden, Arps, Slate, MeagherRichards, Layton & Flom LLPFinger, P.A. (included in
Exhibit 5.2)*
24 Power of Attorney of certain officers, directors and
directorstrustees of the
CorporationIndependent Bank Corp. and Independent Capital
Trust III, respectively (located on the signature pagepages
hereto)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the IndentureIndenture*
25.2 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Declaration of Trust of Independent
Capital Trust IIII*
25.3 Form T-1 Statement of Eligibility of The Bank of New York
under the Guarantee Agreement for the benefit of the holders
of the Trust
Preferred SecuritiesSecurities*
- ----------------------------------------
* To bePreviously filed
by amendment.