CONSECO, INC.
9.00% SUBORDINATED DEFERRABLE INTEREST DEBENTURE
No. 1 DUE DECEMBER 31, 2028 REGISTERED
$206,200,000
Conseco, Inc., an Indiana corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to State Street Bank and Trust
Company, as Property Trustee under that certain Amended and Restated Declaration
of Trust, dated as of October 14, 1998, among the Trustees of Conseco Financing
Trust VI named therein, the Company and the holders from time to time of
undivided beneficial interests in the assets of Conseco Financing Trust VI, or
registered assigns, the principal sum of Two Hundred Six Million Two Hundred
Thousand Dollars ($206,200,000) on December 31, 2028 (or on such date that is no
earlier than December 31, 2003 or such date that is no later than the earlier
of: (i) December 31, 2047, or (ii) the Interest Deduction Date, if the Company
elects to shorten or extend the Maturity Date as further described herein), and
to pay interest on said principal sum from the date of issuance, or from the
most recent interest payment date (each such date, an "Interest Payment Date")
to which interest has been paid or duly provided for, quarterly (subject to
deferral as set forth herein) in arrears on March 31, June 30, September 30 and
December 31 of each year commencing December 31, 1998, at the rate of 9.00% per
annum until the principal hereof shall have become due and payable, and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded quarterly. The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarter on
the basis of the actual number of days elapsed in such 90-day quarter. In the
event that any date on which interest is payable on this Debenture is not a
Business Day, then payment of interest payable on such date will be made 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 Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Debenture is registered at the close of
business on the regular record date for such interest installment, which shall
be the close of business on the Business Day next preceding such Interest
Payment Date. Notwithstanding the foregoing, any interest that is payable on the
Maturity Date shall be payable to the Person to whom principal payable at the
Maturity Date shall be payable. Any such interest installment not punctually
paid or duly provided for shall forthwith cease to be payable to the registered
Holders on such regular record date and may be paid to the Person in whose name
this Debenture (or one or more Predecessor Security) is registered at the close
of business on a special record date to be fixed in accordance with the
provisions of Section 3.7(b) of the Indenture. The principal of and the interest
on this Debenture shall be payable at the office or
1
agency of the Trustee maintained for that purpose in any coin or currency of the
United States of America that at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered Holder at
such address as shall appear in the Register. Notwithstanding the foregoing, so
long as the Holder of this Debenture is the Property Trustee, the payment of the
principal of and interest on this Debenture will be made by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Property Trustee. Payment of principal of the Debentures will
only be made upon surrender of the Debentures to the Trustee or Paying Agent.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Debenture is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: October 14, 1998. CONSECO, INC.
By: /s/ Rollin M. Dick
---------------------------------------------
Rollin M. Dick, Executive Vice President and
Chief Financial Officer
By: /s/ Thomas J. Kilian
---------------------------------------------
Thomas J. Kilian, Executive Vice President
and Chief Operations Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Mark A. Forgetta
---------------------------------------------
Authorized Signatory
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This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in and all
issued or to be issued in one or more series under and pursuant to an Indenture
dated as of November 14, 1996, duly executed and delivered between the Company
and State Street Bank and Trust Company, as successor trustee to Fleet National
Bank, as Trustee (the "Trustee"), as supplemented by the First Supplemental
Indenture dated as of November 14, 1996, the Second Supplemental Indenture dated
as of November 22, 1996, the Third Supplemental Indenture dated as of March 26,
1997 and the Fourth Supplemental Indenture dated August 24, 1998 (as so
supplemented, the "Base Indenture"), as supplemented by the Fifth Supplemental
Indenture dated as of October 14, 1998 between the Company and the Trustee (the
Base Indenture as so supplemented, the "Indenture"), to which a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the Holders of the Debentures, and to all of
which provisions the Holder of this Debenture by acceptance hereof, assents and
agrees. By the terms of the Indenture, the Debentures are issuable in series
that may vary as to amount, date of maturity, rate of interest and in other
respects as provided in the Indenture. This series of Debentures is limited in
aggregate principal amount as specified in said Indenture.
Except as provided in the next paragraph with respect to the occurrence
of a Special Event, the Debentures may not be redeemed by the Company prior to
December 31, 2003. The Company shall have the right to redeem this Debenture at
the option of the Company, without premium or penalty, in whole or in part at
any time and from time to time on or after December 31, 2003 (an "Optional
Redemption"), at a redemption price equal to 100% of the principal amount plus
any accrued and unpaid interest, including any Compounded Interest, if any, to
the date of such redemption (the "Optional Redemption Price"). Any redemption
pursuant to this paragraph will be made upon not less than 30 nor more than 60
days' notice at the Optional Redemption Price.
If, at any time, a Tax Event or an Investment Company Event (each, as
defined below, a "Special Event") shall occur and be continuing, the Company
shall have the right, upon not less than 30 nor more than 60 days' notice, to
redeem the Debentures in whole (but not in part) for cash at the Optional
Redemption Price within 90 days following the occurrence of such Special Event.
"Tax Event" means that the Regular Trustees shall have received an
opinion of independent tax counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
(b) 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 or after the date of original
issuance of the Preferred Securities, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days after the date thereof, subject
to United States federal income tax with respect to interest accrued or received
on the Debentures, (ii) the Trust is, or will be within 90 days after the date
thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges, or (iii) interest payable to the Trust on the Debentures
is not, or within 90 days of the
4
date thereof, will not be deductible, in whole or in part, by the Company for
United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of independent counsel experienced in practice under the
Investment Company Act of 1940, as amended (the "1940 Act"), to the effect that,
as a result of the occurrence of a 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 (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that the Trust is or will be considered
an "investment company" which is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities.
If the Debentures are only partially redeemed by the Company pursuant
to an Optional Redemption, the Debentures will be redeemed pro rata or by lot or
in some other equitable manner determined by the Trustee. Notwithstanding the
foregoing, if a partial redemption of the Debentures would result in the
delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed, the
Company shall not be permitted to effect such partial redemption and will only
redeem the Debentures in whole.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series (for the unredeemed portion hereof) will
be issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions and limitations provided
in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debentures; provided,
however, that no such supplemental indentures shall (i) change the Stated
Maturity of the principal or any installment of principal or any installment of
interest (other than as contemplated herein), or reduce the amount or principal
or interest thereon or any premium payable upon redemption or repayment thereof,
or change the Place of Payment or currency in which principal or any interest is
payable, or impair the right to institute suit for the enforcement of any
payment of the principal and any premium and interest without the consent of the
Holder of each Debenture so affected; (ii) reduce the aforesaid percentage of
Debentures, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Debenture
then outstanding and affected thereby; (iii) change any obligation of the
Company to maintain an
5
office or agency in the Place of Payment; or (iv) modify any of the above
provisions. The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Debentures of any series at the
time outstanding affected thereby, on behalf of all of the Holders of the
Debentures of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal or interest on the Debentures or a default in
respect of a covenant or provision of the Indenture or the Debentures of such
series which cannot be modified or amended without the consent of each Holder of
Debentures of such series. Any such consent or waiver by the registered Holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Debenture and of any Debentures issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this
Debenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Debenture at the time and place and at the rate and in the money herein
prescribed.
The Company shall have the right at any time during the term of the
Debentures from time to time to extend the interest payment period of such
Debentures for up to 20 consecutive quarters not to extend beyond the Maturity
Date of the Debentures (an "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Debentures to the
extent that payment of such interest is enforceable under applicable law). In
the event that the Company exercises the right to defer interest payments, then,
prior to the payment of all accrued interest on outstanding Debentures, (a) the
Company shall not declare or pay dividends on, or make a distribution with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock, (b) the Company shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank pari passu with or junior to the
Debentures and (c) the Company shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Securities Guarantees);
provided, however, that restriction (a) above does not apply to (i) any stock
dividends paid by the Company where the dividend stock is the same stock as that
on which the dividend is being paid and (ii) purchases or acquisitions of shares
of Company Common Stock in connection with the satisfaction by the Company of
its obligation under any employee benefit plans. Before the termination of any
such Extended Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, provided that such Extended Interest Payment
Period together with all such previous and further extensions thereof shall not
exceed 20 consecutive quarters and shall not extend beyond the Maturity Date of
the Debentures. At the termination of any such Extended Interest Payment Period
and upon the payment of all accrued and unpaid interest and any additional
amounts then due, the Company may commence a new Extended Interest Payment
Period.
6
At any time the Company will have the right to dissolve the Trust and
cause the Debentures to be distributed to the holders of the Trust Securities in
liquidation of the Trust. If the Company elects to dissolve the Trust and
thereby causes the Debentures to be distributed to the holders of the Trust
Securities, the Company shall have the right to (a) shorten the Maturity Date to
any date that is not earlier than December 31, 2003 and (b) to extend the
Maturity Date to a date no later than the earlier of (i) December 31, 2047, or
(ii) the Interest Deduction Date, provided the conditions in clauses (i) through
(vi) below are met on the date the Company exercises such right and on the
Maturity Date in effect prior to such proposed extension (the "Preceding
Maturity Date"). In addition, the Company shall have the right, which must be
exercised at least 90 days prior to the Maturity Date then in effect, to extend
the Maturity Date for one or more periods, but in no event to a date later than
the earlier of (i) December 31, 2047, or (ii) the Interest Deduction Date,
provided that the Company must satisfy the following conditions on the date it
exercises such right and on the Preceding Maturity Date: (i) the Company is not
in bankruptcy or otherwise insolvent, (ii) the Company is not in default on any
Debentures issued to the Trust or any trustee of the Trust in connection with
the issuance of Trust Securities by the Trust, (iii) the Company has made timely
payments on the Debentures for the immediately preceding six quarters without
deferrals, (iv) the Trust is not in arrears on payment of distributions on the
Trust Securities, (v) the Debentures or the Preferred Securities are rated
investment grade by a nationally recognized statistical rating organization, and
(vi) the final maturity of the Debentures is no later than December 31, 2047. In
the event the conditions specified in clauses (i) through (vi) above are not
satisfied on the date of exercise of the right to extend the Maturity Date and
on the Preceding Maturity Date, then the Maturity Date of the Debentures shall
be the Preceding Maturity Date. In no event shall an extended Maturity Date be
later than the Interest Deduction Date even if the Maturity Date has previously
been extended to a date beyond the Interest Deduction Date.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered Holder hereof on the
Register of the Company, upon surrender of this Debenture for registration of
transfer at the Corporate Trust Office of the Trustee accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Registrar) for the purpose of
receiving payment of or on account of the principal hereof and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Registrar shall be affected by any notice to the
contrary.
7
No recourse shall be had for the payment of the principal of or the
interest on this Debenture or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present of future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
As provided in the Indenture and subject to certain limitations herein
and therein set forth, Debentures of this series so issued are exchangeable for
a like aggregate principal amount of Debentures of this series of a different
authorized denomination, as requested by the Holder surrendering the same. All
terms used in this Debenture that are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
The Company and the Holder agree (i) that for United States federal,
state and local tax purposes it is intended that the Debenture constitute
indebtedness and (ii) to file all United States federal, state and local tax
returns and reports on such basis (unless the Company or the Holder, as the case
may be, shall have received an opinion of independent nationally recognized tax
counsel to the effect that as a result of a change in law after the date of the
issuance of the Debenture the Company or the Holder, as the case may be, is
prohibited from filing on such basis).
8
CONSECO, INC.
9.00% SUBORDINATED DEFERRABLE INTEREST DEBENTURE
No. 2 DUE DECEMBER 31, 2028 REGISTERED
$31,000,000
Conseco, Inc., an Indiana corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to State Street Bank and Trust
Company, as Property Trustee under that certain Amended and Restated Declaration
of Trust, dated as of October 14, 1998, among the Trustees of Conseco Financing
Trust VI named therein, the Company and the holders from time to time of
undivided beneficial interests in the assets of Conseco Financing Trust VI, or
registered assigns, the principal sum of Thirty-one Million Dollars
($31,000,000) on December 31, 2028 (or on such date that is no earlier than
December 31, 2003 or such date that is no later than the earlier of: (i)
December 31, 2047, or (ii) the Interest Deduction Date, if the Company elects to
shorten or extend the Maturity Date as further described herein), and to pay
interest on said principal sum from the date of issuance, or from the most
recent interest payment date (each such date, an "Interest Payment Date") to
which interest has been paid or duly provided for, quarterly (subject to
deferral as set forth herein) in arrears on March 31, June 30, September 30 and
December 31 of each year commencing December 31, 1998, at the rate of 9.00% per
annum until the principal hereof shall have become due and payable, and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded quarterly. The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarter on
the basis of the actual number of days elapsed in such 90-day quarter. In the
event that any date on which interest is payable on this Debenture is not a
Business Day, then payment of interest payable on such date will be made 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 Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Debenture is registered at the close of
business on the regular record date for such interest installment, which shall
be the close of business on the Business Day next preceding such Interest
Payment Date. Notwithstanding the foregoing, any interest that is payable on the
Maturity Date shall be payable to the Person to whom principal payable at the
Maturity Date shall be payable. Any such interest installment not punctually
paid or duly provided for shall forthwith cease to be payable to the registered
Holders on such regular record date and may be paid to the Person in whose name
this Debenture (or one or more Predecessor Security) is registered at the close
of business on a special record date to be fixed in accordance with the
provisions of Section 3.7(b) of the Indenture. The principal of and the interest
on this Debenture shall be payable at the office or agency of the Trustee
maintained for
1
that purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the registered Holder at such address as shall appear
in the Register. Notwithstanding the foregoing, so long as the Holder of this
Debenture is the Property Trustee, the payment of the principal of and interest
on this Debenture will be made by wire transfer in immediately available funds
at such place and to such account as may be designated by the Property Trustee.
Payment of principal of the Debentures will only be made upon surrender of the
Debentures to the Trustee or Paying Agent.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Debenture is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: October 14, 1998. CONSECO, INC.
By: /s/ Rollin M. Dick
--------------------------------------------
Rollin M. Dick, Executive Vice President and
Chief Financial Officer
By: /s/ Thomas J. Kilian
--------------------------------------------
Thomas J. Kilian, Executive Vice President
and Chief Operations Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Mark A. Forgetta
-------------------------------------------
Authorized Signatory
3
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in and all
issued or to be issued in one or more series under and pursuant to an Indenture
dated as of November 14, 1996, duly executed and delivered between the Company
and State Street Bank and Trust Company, as successor trustee to Fleet National
Bank, as Trustee (the "Trustee"), as supplemented by the First Supplemental
Indenture dated as of November 14, 1996, the Second Supplemental Indenture dated
as of November 22, 1996, the Third Supplemental Indenture dated as of March 26,
1997 and the Fourth Supplemental Indenture dated August 24, 1998 (as so
supplemented, the "Base Indenture"), as supplemented by the Fifth Supplemental
Indenture dated as of October 14, 1998 between the Company and the Trustee (the
Base Indenture as so supplemented, the "Indenture"), to which a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the Holders of the Debentures, and to all of
which provisions the Holder of this Debenture by acceptance hereof, assents and
agrees. By the terms of the Indenture, the Debentures are issuable in series
that may vary as to amount, date of maturity, rate of interest and in other
respects as provided in the Indenture. This series of Debentures is limited in
aggregate principal amount as specified in said Indenture.
Except as provided in the next paragraph with respect to the occurrence
of a Special Event, the Debentures may not be redeemed by the Company prior to
December 31, 2003. The Company shall have the right to redeem this Debenture at
the option of the Company, without premium or penalty, in whole or in part at
any time and from time to time on or after December 31, 2003 (an "Optional
Redemption"), at a redemption price equal to 100% of the principal amount plus
any accrued and unpaid interest, including any Compounded Interest, if any, to
the date of such redemption (the "Optional Redemption Price"). Any redemption
pursuant to this paragraph will be made upon not less than 30 nor more than 60
days' notice at the Optional Redemption Price.
If, at any time, a Tax Event or an Investment Company Event (each, as
defined below, a "Special Event") shall occur and be continuing, the Company
shall have the right, upon not less than 30 nor more than 60 days' notice, to
redeem the Debentures in whole (but not in part) for cash at the Optional
Redemption Price within 90 days following the occurrence of such Special Event.
"Tax Event" means that the Regular Trustees shall have received an
opinion of independent tax counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
(b) 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 or after the date of original
issuance of the Preferred Securities, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days after the date thereof, subject
to United States federal income tax with respect to interest accrued or received
on the Debentures, (ii) the Trust is, or will be within 90 days after the date
thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges, or (iii) interest payable to the Trust on the Debentures
is not, or within 90 days of the
4
date thereof, will not be deductible, in whole or in part, by the Company for
United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of independent counsel experienced in practice under the
Investment Company Act of 1940, as amended (the "1940 Act"), to the effect that,
as a result of the occurrence of a 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 (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that the Trust is or will be considered
an "investment company" which is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities.
If the Debentures are only partially redeemed by the Company pursuant
to an Optional Redemption, the Debentures will be redeemed pro rata or by lot or
in some other equitable manner determined by the Trustee. Notwithstanding the
foregoing, if a partial redemption of the Debentures would result in the
delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed, the
Company shall not be permitted to effect such partial redemption and will only
redeem the Debentures in whole.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series (for the unredeemed portion hereof) will
be issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions and limitations provided
in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debentures; provided,
however, that no such supplemental indentures shall (i) change the Stated
Maturity of the principal or any installment of principal or any installment of
interest (other than as contemplated herein), or reduce the amount or principal
or interest thereon or any premium payable upon redemption or repayment thereof,
or change the Place of Payment or currency in which principal or any interest is
payable, or impair the right to institute suit for the enforcement of any
payment of the principal and any premium and interest without the consent of the
Holder of each Debenture so affected; (ii) reduce the aforesaid percentage of
Debentures, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Debenture
then outstanding and affected thereby; (iii) change any obligation of the
Company to maintain an
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office or agency in the Place of Payment; or (iv) modify any of the above
provisions. The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Debentures of any series at the
time outstanding affected thereby, on behalf of all of the Holders of the
Debentures of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal or interest on the Debentures or a default in
respect of a covenant or provision of the Indenture or the Debentures of such
series which cannot be modified or amended without the consent of each Holder of
Debentures of such series. Any such consent or waiver by the registered Holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Debenture and of any Debentures issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this
Debenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Debenture at the time and place and at the rate and in the money herein
prescribed.
The Company shall have the right at any time during the term of the
Debentures from time to time to extend the interest payment period of such
Debentures for up to 20 consecutive quarters not to extend beyond the Maturity
Date of the Debentures (an "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Debentures to the
extent that payment of such interest is enforceable under applicable law). In
the event that the Company exercises the right to defer interest payments, then,
prior to the payment of all accrued interest on outstanding Debentures, (a) the
Company shall not declare or pay dividends on, or make a distribution with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock, (b) the Company shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank pari passu with or junior to the
Debentures and (c) the Company shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Securities Guarantees);
provided, however, that restriction (a) above does not apply to (i) any stock
dividends paid by the Company where the dividend stock is the same stock as that
on which the dividend is being paid and (ii) purchases or acquisitions of shares
of Company Common Stock in connection with the satisfaction by the Company of
its obligation under any employee benefit plans. Before the termination of any
such Extended Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, provided that such Extended Interest Payment
Period together with all such previous and further extensions thereof shall not
exceed 20 consecutive quarters and shall not extend beyond the Maturity Date of
the Debentures. At the termination of any such Extended Interest Payment Period
and upon the payment of all accrued and unpaid interest and any additional
amounts then due, the Company may commence a new Extended Interest Payment
Period.
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At any time the Company will have the right to dissolve the Trust and
cause the Debentures to be distributed to the holders of the Trust Securities in
liquidation of the Trust. If the Company elects to dissolve the Trust and
thereby causes the Debentures to be distributed to the holders of the Trust
Securities, the Company shall have the right to (a) shorten the Maturity Date to
any date that is not earlier than December 31, 2003 and (b) to extend the
Maturity Date to a date no later than the earlier of (i) December 31, 2047, or
(ii) the Interest Deduction Date, provided the conditions in clauses (i) through
(vi) below are met on the date the Company exercises such right and on the
Maturity Date in effect prior to such proposed extension (the "Preceding
Maturity Date"). In addition, the Company shall have the right, which must be
exercised at least 90 days prior to the Maturity Date then in effect, to extend
the Maturity Date for one or more periods, but in no event to a date later than
the earlier of (i) December 31, 2047, or (ii) the Interest Deduction Date,
provided that the Company must satisfy the following conditions on the date it
exercises such right and on the Preceding Maturity Date: (i) the Company is not
in bankruptcy or otherwise insolvent, (ii) the Company is not in default on any
Debentures issued to the Trust or any trustee of the Trust in connection with
the issuance of Trust Securities by the Trust, (iii) the Company has made timely
payments on the Debentures for the immediately preceding six quarters without
deferrals, (iv) the Trust is not in arrears on payment of distributions on the
Trust Securities, (v) the Debentures or the Preferred Securities are rated
investment grade by a nationally recognized statistical rating organization, and
(vi) the final maturity of the Debentures is no later than December 31, 2047. In
the event the conditions specified in clauses (i) through (vi) above are not
satisfied on the date of exercise of the right to extend the Maturity Date and
on the Preceding Maturity Date, then the Maturity Date of the Debentures shall
be the Preceding Maturity Date. In no event shall an extended Maturity Date be
later than the Interest Deduction Date even if the Maturity Date has previously
been extended to a date beyond the Interest Deduction Date.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered Holder hereof on the
Register of the Company, upon surrender of this Debenture for registration of
transfer at the Corporate Trust Office of the Trustee accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Registrar) for the purpose of
receiving payment of or on account of the principal hereof and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Registrar shall be affected by any notice to the
contrary.
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No recourse shall be had for the payment of the principal of or the
interest on this Debenture or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present of future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
As provided in the Indenture and subject to certain limitations herein
and therein set forth, Debentures of this series so issued are exchangeable for
a like aggregate principal amount of Debentures of this series of a different
authorized denomination, as requested by the Holder surrendering the same. All
terms used in this Debenture that are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
The Company and the Holder agree (i) that for United States federal,
state and local tax purposes it is intended that the Debenture constitute
indebtedness and (ii) to file all United States federal, state and local tax
returns and reports on such basis (unless the Company or the Holder, as the case
may be, shall have received an opinion of independent nationally recognized tax
counsel to the effect that as a result of a change in law after the date of the
issuance of the Debenture the Company or the Holder, as the case may be, is
prohibited from filing on such basis).
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