Exhibit 4.5
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
RJR Nabisco Holdings Capital Trust I
June __, 1995
AMENDED AND RESTATED DECLARATION OF TRUST
("Declaration") dated and effective as of June __, 1995 by
the undersigned trustees (together with all other Persons
from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the
"Trustees"), RJR Nabisco Holdings Corp., a Delaware
corporation, as trust sponsor ("Holdings" or the "Sponsor"),
and by the holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued
pursuant to this Declaration.
WHEREAS, the Sponsor and the Trustees entered into
a Declaration of Trust dated as of June __, 1995 (the
"Original Declaration") in order to establish a statutory
business trust (the "Trust") under the Business Trust Act
(as hereinafter defined);
WHEREAS, the Certificate of Trust (the
"Certificate of Trust") of the Trust was filed with the
office of the Secretary of State of the State of Delaware on
June __, 1995;
WHEREAS, the Trustees and the Sponsor desire to
continue the Trust pursuant to the Business Trust Act for
the purpose of, as described more fully in Section 3.3
hereof, (i) issuing Preferred Securities (as defined herein)
representing undivided beneficial interests in the assets of
the Trust in exchange for Series B Depositary Shares
("Depositary Shares") each representing 1/1000 of a share of
Series B Preferred Stock (as hereinafter defined) of
Holdings pursuant to the Offer (as hereinafter defined) and
delivering such Depositary Shares to Holdings in
consideration for the deposit by Holdings as trust assets of
Debentures (as hereinafter defined) of Holdings issued under
the Indenture (as hereinafter defined) and (ii) issuing and
selling Common Securities (as defined herein) representing
undivided beneficial interests in the assets of the Trust to
Holdings in exchange for cash and investing the proceeds
thereof in additional Debentures of Holdings issued under
the Indenture to be held as assets of the Trust; and
NOW, THEREFORE, it being the intention of the
parties hereto that the Trust constitute a business trust
under the Business Trust Act, that the Original Declaration
be amended and restated in its entirety as provided herein
and that this Declaration constitute the governing
instrument of such business trust, the Trustees declare that
all assets referred to in clauses (i) and (ii) of the
previous Whereas clause contributed to or purchased by the
Trust will be held in trust for the benefit of the Holders
(as defined herein) from time to time, of the Certificates
(as defined herein) representing undivided beneficial
interests in the assets of the Trust issued hereunder,
subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
-----------
(a) Capitalized terms used in this Declaration
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration
has the same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Amended and Restated Declaration of
Trust (including Exhibits A, B and C hereto (the
"Exhibits")) as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to
Articles and Sections and Exhibits are to Articles and
Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has
the same meaning when used in this Declaration unless
otherwise defined in this Declaration or unless the context
otherwise requires; and
(f) a reference to the singular includes the
plural and vice versa.
2
"Affiliate" has the same meaning as given to that
---------
term in Rule 405 of the Securities Act or any successor rule
thereunder.
"Appointment Event" means an event defined in the
-----------------
terms of the Preferred Securities set forth in Exhibit B
which entitles the Holders of a Majority in liquidation
amount of the Preferred Securities to appoint a Special
Regular Trustee.
"Book Entry Interest" means a beneficial interest
-------------------
in a Certificate registered in the name of a Clearing Agency
or a nominee thereof, ownership and transfers of which shall
be maintained and made through book entries by such Clearing
Agency as described in Section 9.4.
"Business Day" means any day other than a day on
------------
which banking institutions in New York, New York are
authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12
------------------
of the Delaware Code, 12 Del. Code Sec. 3801 et seq., as it may
------------ -- ---
be amended from time to time.
"Certificate" means a Common Security Certificate
-----------
or a Preferred Security Certificate.
"Certificate of Trust" has the meaning set forth
--------------------
in the second Whereas clause above.
"Clearing Agency" means an organization registered
---------------
as a "Clearing Agency" pursuant to Section 17A of the
Exchange Act that is acting as depository for the Preferred
Securities and in whose name or in the name of a nominee of
that organization, shall be registered a Global Certificate
and which shall undertake to effect book entry transfers and
pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker,
---------------------------
dealer, bank, other financial institution or other Person
for whom from time to time the Clearing Agency effects book
entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as
----
amended from time to time or any successor legislation. A
reference to a specific section ((Sec.)) of the Code refers
not only to such specific section but also to any
corresponding provision of any federal tax statute enacted
after the date of this Declaration, as such specific section
or corresponding provision is in effect on the date of
3
application of the provisions of this Declaration containing
such reference.
"Commission" means the Securities and Exchange
----------
Commission.
"Common Security" has the meaning specified in
---------------
Section 7.1(b).
"Common Security Certificate" means a definitive
---------------------------
certificate in fully registered form representing a Common
Security substantially in the form of Annex I to Exhibit C.
"Covered Person" means (i) any officer, director,
--------------
shareholder, partner, member, representative, employee or
agent of the Trust or its Affiliates, (ii) any officer,
director, shareholder, employees, representatives or agents
of Holdings or its Affiliates and (iii) the Holders from
time to time of the Securities.
"Dealer Manager Agreement" means the dealer
------------------------
manager agreement entered into among Holdings, the Trust and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated, Lehman Brothers, PaineWebber
Incorporated and Smith Barney Inc. with respect to, among
other things, the Offer and the Preferred Securities.
"Debenture Trustee" means The Bank of New York, as
-----------------
trustee under the Indenture until a successor is appointed
thereunder and thereafter means such successor trustee.
"Debentures" means the series of Junior
----------
Subordinated Debentures issued by Holdings under the
Indenture to the Institutional Trustee and entitled the
"_____% Junior Subordinated Debentures due 2044".
"Delaware Trustee" has the meaning set forth in
----------------
Section 5.1(a)(3).
"Distribution" means a distribution payable to
------------
Holders of Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the
---
initial Clearing Agency.
"Event of Default" in respect of the Securities
----------------
means an Indenture Event of Default has occurred and is
continuing in respect of the Debentures.
4
"Exchange Act" means the Securities Exchange Act
------------
of 1934, as amended from time to time or any successor
legislation.
"Expiration Date" has the meaning set forth in the
---------------
Prospectus.
"Fiscal Year" has the meaning specified in Section
-----------
11.1.
"Holder" means a Person in whose name a
------
Certificate representing a Security is registered, such
Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means any Trustee, any
------------------
Affiliate of any Trustee, any officers, directors,
shareholders, members, partners, employees, representatives
or agents of any Trustee, or any employee or agent of the
Trust or its Affiliates.
"Indenture" means the Indenture dated as of _____,
---------
1995 between Holdings and the Debenture Trustee and the
First Supplemental Indenture thereto dated such date
pursuant to which the Debentures are to be issued.
"Indenture Event of Default" means any event or
--------------------------
condition defined as an "Event of Default" with respect to
the Debentures under Section 6.1 of the Indenture has
occurred and is continuing.
"Institutional Trustee" means the Trustee meeting
---------------------
the eligibility requirements set forth in Section 5.1(c) and
having the duties set forth for the Institutional Trustee
herein.
"Investment Company" means an investment company
------------------
as defined in the Investment Company Act.
"Investment Company Act" means the Investment
----------------------
Company Act of 1940, as amended from time to time or any
successor legislation.
"Legal Action" has the meaning specified in
------------
Section 3.6(g).
"Liquidation Distribution" has the meaning set
------------------------
forth in Exhibits B and C hereto establishing the terms of
the Securities.
5
"Majority in liquidation amount of the Securities"
------------------------------------------------
means, except as otherwise required by the Trust Indenture
Act and except as provided in the penultimate paragraph of
paragraph 5 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the
context may require, Holder(s) of outstanding Preferred
Securities or Common Securities voting separately as a
class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated
amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) represents
more than 50% of the liquidation amount of all outstanding
Securities of such class.
"Ministerial Action" has the meaning set forth in
------------------
the terms of the Securities as set forth in Exhibits B and C
hereto.
"Offer" means the offer by the Trust to exchange
-----
Preferred Securities of the Trust for outstanding Depositary
Shares of Holdings in consideration for the deposit by
Holdings as trust assets of Debentures issued under the
Indenture, all as described in the Prospectus.
"Original Declaration" has the meaning set forth
--------------------
in the first WHEREAS clause above.
"Paying Agent" has the meaning specified in
------------
Section 3.8(g).
"Person" means a legal person, including any
------
individual, corporation, estate, partnership, joint venture,
association, joint stock company, limited liability company,
trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee" means the Guarantee
-------------------
Agreement to be dated as of ______, 1995 of Holdings in
respect of the Preferred Securities.
"Preferred Security" has the meaning specified in
------------------
Section 7.1(b).
"Preferred Security Beneficial Owner" means, with
-----------------------------------
respect to a Book Entry Interest, a Person who is the
beneficial owner of such Book Entry Interest, as reflected
on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect
6
participant, in each case in accordance with the rules of
such Clearing Agency).
"Preferred Security Certificate" means a
------------------------------
definitive certificate in fully registered form representing
a Preferred Security substantially in the form of Annex I to
Exhibit B.
"Prospectus" means the Prospectus dated ______,
----------
1995 relating to the Offer.
"Quorum" means a majority of the Regular Trustees
------
or, if there are only two Regular Trustees, both such
Regular Trustees.
"Regular Trustee" means any Trustee other than the
---------------
Institutional Trustee and the Delaware Trustee.
"Related Party" means any direct or indirect
-------------
wholly owned subsidiary of Holdings or any other Person
which owns, directly or indirectly, 100% of the outstanding
voting securities of Holdings.
"Resignation Request" has the meaning specified in
-------------------
Section 5.2(d).
"Responsible Officer" means, with respect to the
-------------------
Institutional Trustee, the chairman of the board of
directors, the president, any vice-president, any assistant
vice-president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the
Institutional Trustee customarily performing functions
similar to those performed by any of the above designated
officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"RJR Nabisco Holdings Capital Trust" shall mean
----------------------------------
any statutory business trust created under the laws of the
State of Delaware specified in the applicable board
resolution or supplemental indenture establishing a
particular series of Securities pursuant to Section 2.3 of
the Indenture.
"Rule 3a-5" means Rule 3a-5 under the Investment
---------
Company Act or any successor rule thereunder.
"Securities" means the Common Securities and the
----------
Preferred Securities.
7
"Securities Act" means the Securities Act of 1933,
--------------
as amended from time to time or any successor legislation.
"Series B Preferred Stock" means the Series B
------------------------
Cumulative Preferred Stock of Holdings.
"Special Event" has the meaning set forth in the
-------------
terms of the Securities as set forth in Exhibits B and C
hereto.
"Special Regular Trustee" means a Regular Trustee
-----------------------
appointed by the Holders of a Majority in liquidation amount
of the Preferred Securities in accordance with Section
5.2(a)(ii)(B).
"Sponsor" or "Holdings" means RJR Nabisco Holdings
------- --------
Corp., a Delaware corporation, or any successor entity in a
merger, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning
--------------------------
specified in Section 5.2(b)(ii).
"Successor Institutional Trustee" means a
-------------------------------
successor Trustee possessing the qualifications to act as
Institutional Trustee under Section 5.1(c).
"10% in liquidation amount of the Securities"
-------------------------------------------
means, except as otherwise required by the Trust Indenture
Act and except as provided in the penultimate paragraph of
paragraph 5 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the
context may require, Holder(s) of outstanding Preferred
Securities or Common Securities, voting separately as a
class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated
amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) represents
10% or more of the liquidation amount of all outstanding
Securities of such class.
"Treasury Regulations" means the income tax
--------------------
regulations including temporary and proposed regulations,
promulgated under the Code by the United States Treasury, as
such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has
------- --------
signed this Declaration as a trustee, so long as such Person
shall continue in office in accordance with the terms
hereof, and all other Persons who may from time to time be
8
duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein
to a Trustee or the Trustees shall refer to such Person or
Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture
-------------------
Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions
of the Trust Indenture Act that are required to be part of
this Declaration and shall, to the extent applicable, be
governed by such provisions;
(b) if and to the extent that any provision of
this Declaration limits, qualifies or conflicts with the
duties imposed by Sec.Sec. 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control;
(c) the Institutional Trustee, to the extent
permitted by applicable law and/or the rules and regulations
of the Commission, shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act; and
(d) the application of the Trust Indenture Act to
this Declaration shall not affect the nature of the
Securities as equity securities representing undivided
beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Preferred Securities.
----------------------------------------
(a) Each of the Sponsor and the Regular Trustees
on behalf of the Trust shall provide the Institutional
Trustee with such information as is required under Sec. 312(a)
of the Trust Indenture Act at the times and in the manner
provided in Sec. 312(a); and
(b) the Institutional Trustee shall comply with
its obligations under Sec.Sec. 310(b), 311 and 312(b) of the Trust
Indenture Act.
9
SECTION 2.3 Reports by the Institutional Trustee.
------------------------------------
Within 60 days after May 15 of each year, the
Institutional Trustee shall provide to the Holders of the
Securities such reports as are required by Sec. 313 of the
Trust Indenture Act, if any, in the form, in the manner and
at the times provided by Sec. 313 of the Trust Indenture Act.
The Institutional Trustee shall also comply with the
requirements of Sec. 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
-----------------------------------------
Each of the Sponsor and the Regular Trustees on
behalf of the Trust shall provide to the Institutional
Trustee, the Commission and the Holders of the Securities,
as applicable, such documents, reports and information as
required by Sec. 314(a)(1)-(3) (if any) of the Trust Indenture
Act and the compliance certificates required by Sec. 314(a)(4)
and (c) of the Trust Indenture Act, any such certificates to
be provided in the form, in the manner and at the times
required by Sec. 314(a)(4) and (c) of the Trust Indenture Act
(provided that any certificate to be provided pursuant to Sec.
314(a)(4) of the Trust Indenture Act shall be provided
within 120 days of the end of each Fiscal Year).
SECTION 2.5 Evidence of Compliance with
Conditions Precedent.
---------------------------
Each of the Sponsor and the Regular Trustees on
behalf of the Trust shall provide to the Institutional
Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration which
relate to any of the matters set forth in Sec. 314(c) of the
Trust Indenture Act. Any certificate or opinion required to
be given pursuant to Sec. 314(c) shall comply with Sec. 314(e) of
the Trust Indenture Act.
SECTION 2.6 Events of Default; Waiver
-------------------------
(a) Subject to Section 2.6(c), Holders of
Preferred Securities may by vote of at least a Majority in
liquidation amount of the Preferred Securities (A) in
accordance with the terms of the Preferred Securities,
direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the
Institutional Trustee or (B) on behalf of the Holders of all
Preferred Securities waive any past Event of Default in
respect of the Preferred Securities and its consequences,
provided that if the Event of Default arises out of an
Indenture Event of Default:
10
(i) which is not waivable under the Indenture,
the Event of Default under this Declaration shall also
not be waivable; or
(ii) which requires the consent or vote of (1)
holders of Debentures representing a specified
percentage greater than a majority in principal amount
of the Debentures, or (2) each holder of Debentures,
the Event of Default under this Declaration may only be
waived by, in the case of clause (1) above, the vote of
Holders of Preferred Securities representing such
specified percentage of the aggregate liquidation
amount of the Preferred Securities, or, in the case of
clause (2) above, each Holder of Preferred Securities.
Upon such waiver, any such default shall cease to exist, and
any Event of Default with respect to the Preferred
Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or
Event of Default with respect to the Preferred Securities or
impair any right consequent thereon.
(b) Subject to Section 2.6(c), Holders of Common
Securities may by vote of at least a Majority in liquidation
amount of the Common Securities, (A) in accordance with the
terms of the Common Securities, direct the time, method and
place of conducting any proceeding for any remedy available
to the Institutional Trustee, or exercising any trust or
power conferred upon the Institutional Trustee or (B) on
behalf of the Holders of all of the Common Securities, waive
any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the Event
of Default arises out of an Indenture Event of Default:
(i) which is not waivable under the Indenture,
except where the Holders of the Common Securities are
deemed to have waived such Event of Default under the
Declaration as provided below, the Event of Default
under this Declaration shall also not be waivable; or
(ii) which requires the consent or vote of (1)
holders of Debentures representing a specified
percentage greater than a majority in principal amount
of the Debentures or (2) each holder of Debentures,
except where the holders of the Common Securities are
deemed to have waived such Event of Default under this
Declaration as provided below, the Event of Default
under this Declaration may only be waived by, in the
case of clause (1) above, the vote of Holders of Common
11
Securities representing such specified percentage of
the aggregate liquidation amount of the Common
Securities, or, in the case of clause (2) above, each
holder of Common Securities; and
provided, further that, each Holder of Common Securities
-------- ------- ----
will be deemed to have waived any Event of Default with
respect to the Common Securities and its consequences until
all Events of Default with respect to the Preferred
Securities have been cured, waived by the Holders of
Preferred Securities as provided in this Declaration or
otherwise eliminated and until all Events of Default with
respect to the Preferred Securities have been so cured,
waived or otherwise eliminated, the Institutional Trustee
will be deemed to be acting solely on behalf of the Holders
of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of this
Declaration or the Securities. If any Event of Default with
respect to the Preferred Securities is waived by the Holders
of Preferred Securities as provided in this Declaration, the
Holders of Common Securities agree that such waiver shall
also constitute the waiver of such Event of Default with
respect to the Common Securities for all purposes under this
Declaration without any further act, vote or consent of the
Holders of the Common Securities. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any
such default shall cease to exist and any Event of Default
with respect to the Common Securities arising therefrom
shall be deemed to have been cured, for every purpose of
this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect
to the Common Securities or impair any right consequent
thereon.
(c) The right of any Holder of Securities to
receive payment of Distributions on the Securities in
accordance with this Declaration and the terms of the
Securities set forth in Exhibits B and C on or after the
respective payment dates therefor, or to institute suit for
the enforcement of any such payment on or after such payment
dates, shall not be impaired without the consent of each
such Holder.
(d) As provided in the terms of the Securities
set forth in Exhibits B and C hereto, a waiver of an
Indenture Event of Default by the Institutional Trustee at
the written direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event
of Default under this Declaration in respect of the
Securities.
12
SECTION 2.7 Disclosure of Information
-------------------------
The disclosure of information as to the names and
addresses of the Holders of the Securities in accordance
with Sec. 312 of the Trust Indenture Act, regardless of the
source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law
hereafter enacted which does not specifically refer to Sec. 312
of the Trust Indenture Act, nor shall the Institutional
Trustee be held accountable by reason of mailing any
material pursuant to a request made under Sec. 312(b) of the
Trust Indenture Act.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
----
The Trust continued by this Declaration is named
"RJR Holdings Capital Trust I" as such name may be modified
from time to time by the Regular Trustees following written
notice to the Holders of Securities. The Trust's activities
may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
------
The address of the principal office of the Trust
is c/o RJR Nabisco Holdings Corp., 1301 Avenue of the
Americas, New York, New York 10019. Upon ten days' written
notice to the Holders, the Regular Trustees may change the
location of the Trust's principal office. The name of the
registered agent and office of the Trust in the State of
Delaware is __________________________. At any time, the
Regular Trustees may designate another registered agent
and/or registered office.
SECTION 3.3 Purpose.
-------
The exclusive purposes and functions of the Trust
are: (a)(i) to issue Preferred Securities in exchange for
Depositary Shares pursuant to the Offer to deliver such
Depositary Shares to Holdings in consideration for the
deposit by Holdings as trust assets of Debentures issued
under the Indenture having an aggregate principal amount
equal to the aggregate liquidation amount of the Preferred
Securities so delivered; (ii) to enter into such agreements
and arrangements as may be necessary in connection with the
Offer and to take all action, and exercise such discretion,
13
as may be necessary or desirable in connection with the
Offer and to file such registration statements or make such
other filings under the Securities Act, the Exchange Act or
state securities or "Blue Sky" laws as may be necessary or
desirable in connection with the Offer and the issuance of
the Preferred Securities; and (iii) to issue and sell Common
Securities to Holdings for cash and use the proceeds of such
sale to purchase as trust assets an equal aggregate
principal amount of Debentures issued under the Indenture;
and (b) except as otherwise limited herein, to engage in
only those other activities necessary, or incidental
thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, pledge any of
its assets or at any time while the Securities are
outstanding, otherwise undertake (or permit to be
undertaken) any activity that would result in or cause the
Trust to be treated as anything other than a grantor trust
for United States federal income tax purposes.
SECTION 3.4 Authority.
---------
Subject to the limitations provided in this
Declaration and to the specific duties of the Institutional
Trustee, the Regular Trustees shall have exclusive and
complete authority to carry out the purposes of the Trust.
An action taken by the Regular Trustees in accordance with
their powers shall constitute the act of and serve to bind
the Trust and an action taken by the Institutional Trustee
in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required
to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as
set forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
------------------------------
Unless otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in
the Trust. The Holders of Certificates shall not have legal
title to any part of the assets of the Trust, but shall have
an individual undivided beneficial interest in the assets of
the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
-----------------------------------------
The Regular Trustees shall have the exclusive
power, authority and duty to cause the Trust, and shall
cause the Trust, to engage in the following activities:
14
(a) to issue Preferred Securities and Common
Securities, in each case in accordance with this
Declaration; provided, however, that the Trust may issue no
more than one series of Preferred Securities and no more
than one series of Common Securities, and, provided further,
there shall be no interests in the Trust other than the
Securities and the issuance of Securities shall be limited
to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities;
(b) in connection with the Offer and the issuance
of the Preferred Securities, at the direction of the
Sponsor, to effect or cause to be effected the filings, and
to execute or cause to be executed, the documents, set forth
in Section 3.11;
(c) to acquire as trust assets Debentures upon
consummation of the Offer in connection with the exchange of
Preferred Securities for Depositary Shares pursuant to the
Offer and to acquire as trust assets additional Debentures
with the proceeds of the sale of the Common Securities;
(d) to cause the Trust to enter into the Dealer
Manager Agreement and such other agreements and arrangements
as may be necessary or desirable in connection with the
Offer and the consummation thereof, and to take all action,
and exercise all discretion, as may be necessary or
desirable in connection with the Offer or the consummation
thereof;
(e) to give the Sponsor and the Institutional
Trustee prompt written notice of the occurrence of a Special
Event provided, that the Regular Trustees shall consult with
-------- ----
the Sponsor and the Institutional Trustee before taking or
refraining to take any Ministerial Action in relation to a
Special Event;
(f) to establish a record date with respect to
all actions to be taken hereunder that require a record date
be established, including for the purposes of Section 316(c)
of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions, and exchanges,
and to issue relevant notices to Holders of the Preferred
Securities and Common Securities as to such actions and
applicable record dates;
(g) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust
claims or demands of or against the Trust ("Legal Action"),
unless pursuant to Section 3.8(c), the Institutional Trustee
has the exclusive power to bring such Legal Action;
15
(h) to employ or otherwise engage employees and
agents (who may be designated as officers with titles) and
managers, contractors, advisors, and consultants and pay
reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate to the Institutional
Trustee required by Sec. 314(a)(4) of the Trust Indenture Act
which certificate may be executed by any Regular Trustee;
(k) to incur expenses which are necessary or
incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act
as, registrar and transfer agent for the Securities, the
Regular Trustees hereby initially appointing the
Institutional Trustee for such purposes;
(m) to take all actions and perform such duties
as may be required of the Regular Trustee pursuant to the
terms of the Securities set forth in Exhibits B and C
hereto;
(n) to execute all documents or instruments,
perform all duties and powers, and do all things for and on
behalf of the Trust in all matters necessary or incidental
to the foregoing;
(o) to take all action which may be necessary or
appropriate for the preservation and the continuation of the
Trust's valid existence, rights, franchises and privileges
as a statutory business trust under the laws of the State of
Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of
the Holders of the Securities or to enable the Trust to
effect the purposes for which the Trust has been created;
(p) to take all action, not inconsistent with
this Declaration or with applicable law, which the Regular
Trustees determine in their discretion to be reasonable and
necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.6, in order that:
(i) the Trust will not be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(ii) the Trust will not be classified for United
States federal income tax purposes as an association
16
taxable as a corporation or a partnership and will be
treated as a grantor trust for United States federal
income tax purposes; and
(iii) the Trust will comply with any requirements
imposed by any taxing authority on holders of
instruments treated as indebtedness for United States
federal income tax purposes;
provided that such action does not adversely affect the
interests of Holders;
(q) to take all action necessary to cause all
applicable tax returns and tax information reports that are
required to be filed with respect to the Trust to be duly
prepared and filed by the Regular Trustees, on behalf of the
Trust; and
(r) subject to the requirements of Rule 3a-5 and
Sec. 317(b) of the Trust Indenture Act, to appoint one or more
Paying Agents in addition to the Institutional Trustee.
The Regular Trustees must exercise the powers set
forth in this Section 3.6 in a manner which is consistent
with the purposes and functions of the Trust set out in
Section 3.3 and the Regular Trustees shall not take any
action which is inconsistent with the purposes and functions
of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees
shall have none of the powers nor any of the authority of
the Institutional Trustee set forth in Section 3.8.
SECTION 3.7 Prohibition of Actions by Trust and Trustees.
--------------------------------------------
The Trust shall not, and the Trustees (including
the Institutional Trustee) shall cause the Trust not to,
engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and
the Trustees (including the Institutional Trustee) shall
not:
(a) invest any proceeds received by the Trust
from holding the Debentures but shall promptly distribute
all such proceeds to Holders of Securities pursuant to the
terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly
provided herein;
17
(c) possess Trust property for other than a Trust
purpose;
(d) make any investments, other than investments
represented by the Debentures;
(e) possess any power or otherwise act in such a
way as to vary the Trust assets or the terms of the
Securities in any way whatsoever;
(f) issue any securities or other evidences of
beneficial ownership of, or beneficial interests in, the
Trust other than the Securities;
(g) incur any indebtedness for borrowed money; or
(h) (i) direct the time, method and place of
exercising any trust or power conferred upon the Debenture
Trustee with respect to the Debentures, (ii) waive any past
default that is waivable under Section 5.1 of the Indenture,
(iii) exercise any right to rescind or annul any declaration
that the principal of all of the Debentures shall be due and
payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such
consent shall be required, unless in the case of this clause
(h) the Institutional Trustee shall have received an
unqualified opinion of nationally recognized independent tax
counsel recognized as expert in such matters to the effect
that such action will not cause the Trust to be classified
for United States federal income tax purposes as an
association taxable as a corporation or partnership and that
the Trust will continue to be classified as a grantor trust
for United States federal income tax purposes.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
----------------------------------------------
(a) The Institutional Trustee shall:
(i) on the receipt of payments of funds made in
respect of the Debentures held by the Trust, without
any further acts of the Institutional Trustee or the
Regular Trustees, promptly make payments to the Holders
of the Preferred Securities and Common Securities in
accordance with Section 6.1. Funds held in the Trust
may be held uninvested, and without liability for
interest thereon, until disbursed in accordance with
this Declaration;
(ii) engage in such ministerial activities as
shall be necessary or appropriate to effect promptly
the redemption of the Preferred Securities and the
18
Common Securities to the extent the Debentures are
redeemed or mature;
(iii) upon notice of distribution issued by the
Regular Trustees in accordance with the terms of the
Preferred Securities and the Common Securities, engage
in such ministerial activities as shall be necessary or
appropriate to effect promptly the distribution
pursuant to terms of the Securities of Debentures to
Holders of Securities upon the occurrence of a Special
Event; and
(iv) have the legal power to exercise all of the
rights, powers and privileges of a holder of the
Debentures under the Indenture and, if an Event of
Default occurs and is continuing, the Institutional
Trustee, subject to Section 2.6(b), shall for the
benefit of the Holders of the Securities, enforce its
rights as holder of the Debentures under the Indenture,
subject to the rights of the Holders of the Preferred
Securities pursuant to the terms of this Declaration
and the Trust Indenture Act.
(b) The Institutional Trustee shall take all
actions and perform such duties as may be specifically
required of the Institutional Trustee pursuant to the terms
of the Securities set forth in Exhibits B and C hereto.
(c) The Institutional Trustee shall take any
Legal Action which arises out of or in connection with an
Event of Default or the Institutional Trustee's duties and
obligations under this Declaration or the Trust Indenture
Act.
(d) All moneys and all Debentures held by the
Trust will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of, or for the
benefit of the Institutional Trustee or its agents or their
creditors.
(e) The Institutional Trustee shall, within 90
days after the occurrence of a default with respect to the
Securities, transmit by mail, first class postage prepaid,
to the holders of the Securities, as their names and
addresses appear upon the register, notice of all defaults
with respect to the Securities known to the Institutional
Trustee, unless such defaults shall have been cured before
the giving of such notice (the term "defaults" for the
purposes of this Section 3.8(e) being hereby defined to be
an Indenture Event of Default, not including any periods of
grace provided for in the Indenture and irrespective of the
19
giving of any notice provided therein); provided, that,
except in the case of default in the payment of the
principal of (or premium, if any) or interest on any of the
Debentures, the Institutional Trustee shall be protected in
withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of
directors and/or Responsible Officers, of the Institutional
Trustee in good faith determine that the withholding of such
notice is in the interests of the Holders of the Securities.
The Institutional Trustee shall not be deemed to have
knowledge of any default, except (i) a default in the
payment of principal, premium or interest on the Debentures
or (ii) any default as to which the Institutional Trustee
shall have received written notice or a Responsible Officer
charged with the administration of this Declaration shall
have obtained written notice.
(f) The Institutional Trustee shall not resign as
a Trustee unless either:
(i) the Trust has been completely liquidated
and the proceeds thereof distributed to
the Holders of Securities pursuant to
the terms of the Securities; or
(ii) a Successor Institutional Trustee has
been appointed and accepted that
appointment in accordance with Article
V.
(g) The Institutional Trustee shall act as paying
agent in respect of the Securities and, subject to Section
3.6(r), may authorize one or more Persons (each, a "Paying
Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to
the Preferred Securities. Any such Paying Agent shall
comply with Sec. 317(b) of the Trust Indenture Act. Any Paying
Agent may be removed by the Institutional Trustee, after
consultation with the Regular Trustees, at any time and a
successor Paying Agent or additional Paying Agents may be
appointed at any time by the Institutional Trustee, subject
to Section 3.6(r).
(h) The Institutional Trustee shall give prompt
written notice to the Holders of the Securities of any
notice received by it from Holdings of its election to defer
payments of interest on the Debentures by extending the
interest payment period with respect thereto.
20
(i) Subject to this Section 3.8, the
Institutional Trustee shall have none of the powers or the
authority of the Regular Trustees set forth in Section 3.6.
(j) The Institutional Trustee shall exercise the
powers, duties and rights set forth in this Section 3.8 and
Section 3.10 in a manner which is consistent with the
purposes and functions of the Trust set out in Section 3.3
and the Institutional Trustee shall not take any action
which is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.
SECTION 3.9 Delaware Trustee.
----------------
Notwithstanding any other provision of this
Declaration other than Section 5.1(a)(3), the Delaware
Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees and the
Institutional Trustee described in this Declaration. Except
as set forth in Section 5.1(a)(3), the Delaware Trustee
shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Sec. 3807 of the Business Trust
Act. No implied covenants or obligations shall be read into
this Declaration against the Delaware Trustee.
SECTION 3.10 Certain Rights and Duties of the
--------------------------------
Institutional Trustee.
---------------------
(a) The Institutional Trustee, before the
occurrence of an Event of Default and after the curing of
all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically
set forth in this Declaration, and no implied covenants
shall be read into this Declaration against the
Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to
Section 2.6), the Institutional Trustee shall exercise such
of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be
construed to relieve the Institutional Trustee from
liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default
and after the curing or waiving of all such Events of
Default that may have occurred:
21
(A) the duties and obligations of the
Institutional Trustee shall be determined
solely by the express provisions of this
Declaration, and the Institutional Trustee
shall not be liable except for the
performance of such duties and obligations as
are specifically set forth in this
Declaration, and no implied covenants or
obligations shall be read into this
Declaration against the Institutional
Trustee; and
(B) in the absence of bad faith on the part of
the Institutional Trustee, the Institutional
Trustee may conclusively rely, as to the
truth of the statements and the correctness
of the opinions expressed therein, upon any
certificates or opinions furnished to the
Institutional Trustee and conforming to the
requirements of this Declaration; but in the
case of any such certificates or opinions
that by any provision hereof are specifically
required to be furnished to the Institutional
Trustee, the Institutional Trustee shall be
under a duty to examine the same to determine
whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable
for any error of judgment made in good faith by a
Responsible Officer of the Institutional Trustee,
unless it shall be proved that the Institutional
Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Institutional Trustee shall not be liable
with respect to any action taken or omitted to be taken
by it in good faith in accordance with the direction of
the Holders as provided herein relating to the time,
method and place of conducting any proceeding for any
remedy available to the Institutional Trustee hereunder
or under the Indenture, or exercising any trust or
power conferred upon the Institutional Trustee under
this Declaration; and
(iv) no provision of this Declaration shall
require the Institutional Trustee to expend or risk its
own funds or otherwise incur personal financial
liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it
shall have reasonable ground for believing that the
22
repayment of such funds or liability is not reasonably
assured to it under the terms of this Declaration or
adequate indemnity against such risk or liability is
not reasonably assured to it.
(c) Subject to the provisions of Section 3.10(a)
and (b):
(i) whenever in the administration of this
Declaration, the Institutional Trustee shall deem it
desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder,
the Institutional Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of
bad faith on its part and, if the Trust is excluded
from the definition of Investment Company solely by
means of Rule 3a-5, subject to the requirements of Rule
3a-5, request and rely upon a certificate, which shall
comply with the provisions of Sec. 314(e) of the Trust
Indenture Act, signed by any two of the Regular
Trustees or by an authorized officer of the Sponsor, as
the case may be;
(ii) The Institutional Trustee (A) may consult
with counsel (which may be counsel to the Sponsor or
any of its Affiliates and may include any of its
employees) selected by it in good faith and with due
care and the written advice or opinion of such counsel
with respect to legal matters shall be full and
complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon and in accordance
with such advice and opinion and (B) shall have the
right at any time to seek instructions concerning the
administration of this Declaration from any court of
competent jurisdiction;
(iii) The Institutional Trustee may execute any of
the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or
attorneys and the Institutional Trustee shall not be
responsible for any misconduct or negligence on the
part of any agent or attorney appointed by it in good
faith and with due care;
(iv) The Institutional Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Declaration at the request or
direction of any Holders, unless such Holders shall
have offered to the Institutional Trustee reasonable
security and indemnity against the costs, expenses
23
(including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying
with such request or direction; provided that nothing
contained in this clause (iv) shall relieve the
Institutional Trustee of the obligation, upon the
occurrence of an Event of Default (which has not been
cured or waived) to exercise such of the rights and
powers vested in it by this Declaration, and to use the
same degree of care and skill in this exercise, as a
prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;
and
(v) Any action taken by the Institutional Trustee
or its agents hereunder shall bind the Holders of the
Securities and the signature of the Institutional
Trustee or its agents alone shall be sufficient and
effective to perform any such action; and no third
party shall be required to inquire as to the authority
of the Institutional Trustee to so act, or as to its
compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's
taking such action.
SECTION 3.11 Registration Statement and Related Matters.
------------------------------------------
In accordance with the Original Declaration,
Holdings and the Trustees have authorized and directed, and
hereby confirm the authorization of, Holdings, as the
sponsor of the Trust, (i) to file with the Commission and
execute, in each case on behalf of the Trust, (a) the
Registration Statement on Form S-4 (File No. 33- )
(the "1933 Act Registration Statement") and any pre-
effective or post-effective amendments to such Registration
Statement, relating to the registration under the Securities
Act of the Preferred Securities of the Trust, (b) a
Registration Statement on Form 8-A or other appropriate form
(the "1934 Act Registration Statement") (including all pre-
effective and post-effective amendments thereto) relating to
the registration of the Preferred Securities of the Trust
under Section 12(b) of the Exchange Act and (c) an Issuer
Tender Offer Statement on Schedule 13E-4 and any other
tender offer statement required to be filed by the Trust
with the Commission (including, if necessary, Schedule
14D-1) relating to the Offer (collectively, the "Tender
Offer Schedules") and any amendment or supplement thereto;
(ii) to file with the New York Stock Exchange ("NYSE") and
execute on behalf of the Trust a listing application and all
other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to
24
cause the Preferred Securities to be listed on the NYSE;
(iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents,
appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to
register the Preferred Securities under the securities or
"Blue Sky" laws of such jurisdictions as Holdings on behalf
of the Trust, may deem necessary or desirable and (iv) to
execute on behalf of the Trust the Dealer Manager Agreement,
relating to the Offer, substantially in the form included as
Exhibit 1.1 to the 1933 Act Registration Statement. In the
event that any filing referred to in clauses (i)-(iii) above
is required by the rules and regulations of the Commission,
the NYSE or state securities or blue sky laws, to be
executed on behalf of the Trust by the Trustees, the Regular
Trustees, in their capacities as Trustees of the Trust, are
hereby authorized and directed to join in any such filing
and to execute on behalf of the Trust any and all of the
foregoing, it being understood that the Institutional
Trustee and the Delaware Trustee, in their capacities as
Trustees of the Trust, shall not be required to join in any
such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the
Commission, the NYSE or state securities or blue sky laws.
In connection with all of the foregoing, Holdings and each
Trustee, solely in its capacity as Trustee of the Trust,
have constituted and appointed, and hereby confirm the
appointment of, _____________________, and each of them, as
his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of
substitution and resubstitution, for Holdings or such
Trustee or in Holdings's or such Trustee's name, place and
stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the 1933
Act Registration Statement, the 1934 Act Registration
Statement and the Tender Offer Schedules and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Commission, granting unto
said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to
all intents and purposes as Holdings or such Trustee might
or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or
their or his or her substitute or substitutes, shall do or
cause to be done by virtue hereof.
25
SECTION 3.12 Filing of Amendments to Certificate of Trust.
--------------------------------------------
The Certificate of Trust as filed with the
Secretary of State of the State of Delaware on June __, 1995
is attached hereto as Exhibit A. On or after the date of
execution of this Declaration, the Trustees shall cause the
filing with the Secretary of State of the State of Delaware
of such amendments to the Certificate of Trust as the
Trustees shall deem necessary or desirable.
SECTION 3.13 Execution of Documents by Regular Trustees.
------------------------------------------
Unless otherwise determined by the Regular
Trustees and except as otherwise required by the Business
Trust Act with respect to the Certificate of Trust or
otherwise, a majority of, or if there are only two, both of,
the Regular Trustees are authorized to execute and deliver
on behalf of the Trust any documents which the Regular
Trustees have the power and authority to execute or deliver
pursuant to this Declaration.
SECTION 3.14 Trustees Not Responsible for Recitals or
Issuance of Securities.
----------------------------------------
The recitals contained in this Declaration and the
Securities shall be taken as the statements of the Sponsor
and the Trustees do not assume any responsibility for their
correctness. The Trustees make no representations as to the
value or condition of the property of the Trust or any part
thereof. The Trustees make no representations as to the
validity or sufficiency of this Declaration or the
Securities.
SECTION 3.15 Duration of Trust.
-----------------
The Trust, absent termination pursuant to the
provisions of Article VIII hereof, shall have existence
until December 31, 2044.
26
ARTICLE IV
SPONSOR
SECTION 4.1 Purchase of Common Securities by Sponsor.
----------------------------------------
The Sponsor will purchase Common Securities issued
by the Trust at the same time as the Preferred Securities
are issued in exchange for Depositary Shares pursuant to the
Offer, such purchase to be in an amount equal to 3% of the
sum of (i) the aggregate stated liquidation amount of the
Preferred Securities issued in exchange for Depositary
Shares pursuant to the Offer and (ii) the proceeds derived
from the sale of the Common Securities.
SECTION 4.2 Expenses.
--------
(a) The Sponsor shall be responsible for and
shall pay for all debts and obligations (other than with
respect to the Securities) and all costs and expenses of the
Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance of
the Preferred Securities pursuant to the Offer, the fees and
expenses (including reasonable counsel fees and expenses) of
the Trustees (including any amounts payable under Article
X), the costs and expenses relating to the operation of the
Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s),
transfer agent(s), duplicating, travel and telephone and
other telecommunications expenses and costs and expenses
incurred in connection with the disposition of Trust
assets).
(b) The Sponsor will pay any and all taxes (other
than United States withholding taxes attributable to the
Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
(c) The Sponsor's obligations under this Section
4.2 shall be for the benefit of, and shall be enforceable
by, any Person to whom any such debts, obligations, costs,
expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor
may enforce the Sponsor's obligations under this Section 4.2
directly against the Sponsor and the Sponsor irrevocably
waives any right or remedy to require that any such Creditor
take any action against the Trust or any other Person before
proceeding against the Sponsor. The Sponsor agrees to
execute such additional agreements as may be necessary or
27
desirable in order to give full effect to the provisions of
this Section 4.2.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Qualifications.
----------------------------------
(a) The number of Trustees initially shall be
five (5). At any time (i) before the issuance of the
Securities, the Sponsor may, by written instrument, increase
or decrease the number of, and appoint, remove and replace
the, Trustees, and (ii) after the issuance of the Securities
and except as provided in clause (5) below and Section
5.2(a)(ii)(B) with respect to the Special Regular Trustee,
the number of Trustees may be increased or decreased solely
by, and Trustees may be appointed, removed or replaced
solely by, vote of Holders of Common Securities representing
a Majority in liquidation amount of the Common Securities
voting as a class; provided that in any case:
(1) the number of Trustees shall be at least
five (5) unless the Trustee that acts as the
Institutional Trustee also acts as the Delaware
Trustee, in which cases the number of Trustees
shall be at least three (3);
(2) unless a Special Regular Trustee has been
appointed (which appointment shall not impair the
right of the Holders of Common Securities to
increase or decrease the number of, or to appoint,
remove or replace, Trustees (other than the
Special Regular Trustee) as provided above), at
least a majority of the Trustees shall at all
times be officers, directors or employees of
Holdings;
(3) if required by the Business Trust Act,
one Trustee (the "Delaware Trustee") shall be
either a natural person who is a resident of the
State of Delaware or, if not a natural person, an
entity which has its principal place of business
in the State of Delaware and otherwise is
permitted to act as a Trustee hereunder under the
laws of the State of Delaware, except that if the
Institutional Trustee has its principal place of
business in the State of Delaware and otherwise is
permitted to act as a Trustee hereunder under the
laws of the State of Delaware, then the
28
Institutional Trustee shall also be the Delaware
Trustee and Section 3.9 shall have no application;
(4) there shall at all times be an
Institutional Trustee hereunder which shall
satisfy the requirements of Section 5.1(c); and
(5) the number of Trustees shall be
increased automatically by one (1) if an
Appointment Event has occurred and is continuing
and the Holders of a Majority in liquidation
amount of the Preferred Securities appoint a
Special Regular Trustee in accordance with
Section 5.2(a)(ii)(B) and the terms of the
Preferred Securities.
Each Trustee shall be either a natural person at least 21
years of age or a legal entity which shall act through one
or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
c/o RJR Nabisco Holding Corp.
1301 Avenue of the Americas
New York, New York 10019
(c) There shall at all times be one Trustee which
shall act as Institutional Trustee. In order to act as
Institutional Trustee hereunder, such Trustee shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any
State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the
Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, and
subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to
above, then for the purposes of this Section
5.1(c)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of
condition so published.
29
If at any time the Institutional Trustee shall cease to
satisfy the requirements of clauses (i)-(ii) above, the
Institutional Trustee shall immediately resign in the manner
and with the effect set out in Section 5.2(d). If the
Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Sec. 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holders of
the Common Securities (as if such Holders were the obligor
referred to in Sec. 310(b) of the Trust Indenture Act) shall in
all respects comply with the provisions of Sec. 310(b) of the
Trust Indenture Act. The Preferred Guarantee shall be
deemed to be specifically described in this Declaration for
the purposes of clause (i) of the first proviso contained in
Sec. 310(b) of the Trust Indenture Act.
The initial Trustee which shall serve as the
Institutional Trustee is The Bank of New York, whose address
is as set forth in Section 14.1(b).
(d) The initial Trustee which shall serve as the
Delaware Trustee is The Bank of New York (Delaware), whose
address is as set forth in Section 14.1(c).
(e) Any action taken by (i) Holders of Common
Securities pursuant to this Article V or (ii) Holders of
Preferred Securities pursuant to this Article V to appoint
or remove a Special Regular Trustee upon the occurrence of
an Appointment Event, shall be taken at a meeting of Holders
of Common Securities or Preferred Securities, as the case
may be, convened for such purpose or by written consent as
provided in Section 12.2.
(f) No amendment may be made to this Section 5.1
which would change any rights with respect to the number,
existence or appointment and removal of Trustees (other than
any Special Regular Trustee), except with the consent of
each Holder of Common Securities.
(g) No amendment may be made to this Section 5.1
or Section 5.2(a)(ii)(B), which would change the rights of
Holders of Preferred Securities to appoint, remove or
replace a Special Regular Trustee except with the consent of
each Holder of Preferred Securities.
SECTION 5.2 Appointment, Removal and Resignation of
---------------------------------------
Trustees.
--------
(a) Subject to Section 5.2(b), Trustees may be appointed or
removed without cause at any time:
30
(i) until the issuance of the Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of the Securities,
(A) other than with respect to the Special
Regular Trustee, by vote of the Holders of
a Majority in liquidation amount of the
Common Securities voting as a class; and
(B) if an Appointment Event has occurred and is
continuing, one (1) additional Regular
Trustee (the "Special Regular Trustee") may
be appointed, who need not be an Affiliate
of the Sponsor, by vote of the Holders of a
Majority in liquidation amount of the
Preferred Securities, voting as a class and
such Special Regular Trustee may only be
removed (otherwise than by the operation of
Section 5.2(c)), by vote of the Holders of
a Majority in liquidation amount of the
Preferred Securities voting as a class.
(b) (i) The Trustee that acts as Institutional Trustee
shall not be removed in accordance with Section
5.2(a) until a Successor Institutional Trustee
possessing the qualifications to act as
Institutional Trustee under Section 5.1(c) has
been appointed and has accepted such appointment
by written instrument executed by such Successor
Institutional Trustee and delivered to the Regular
Trustees, the Sponsor and the Institutional
Trustee being removed; and
(ii) the Trustee that acts as Delaware Trustee shall
not be removed in accordance with Section 5.2(a)
until a successor Trustee possessing the
qualifications to act as Delaware Trustee under
Section 5.1(a)(3) (a "Successor Delaware Trustee")
has been appointed and has accepted such
appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the
Regular Trustees, the Sponsor and the Delaware
Trustee being removed.
(c) A Trustee appointed to office shall hold office until
his successor shall have been appointed or until his
death, removal or resignation, provided that a Special
-------- ----
Regular Trustee shall only hold office while an
Appointment Event is continuing and shall cease to hold
office immediately after the Appointment Event pursuant
31
to which the Special Regular Trustee was appointed and
all other Appointment Events cease to be continuing.
(d) Any Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument (a
"Resignation Request") in writing signed by the Trustee
and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or
upon such later date as is specified therein; provided,
--------
however, that:
-------
(i) no such resignation of the Trustee that
acts as the Institutional Trustee shall be
effective until a Successor Institutional
Trustee possessing the qualifications to
act as Institutional Trustee under Section
5.1(c) has been appointed and has accepted
such appointment by instrument executed by
such Successor Institutional Trustee and
delivered to the Trust, the Sponsor and the
resigning Institutional Trustee;
(ii) no such resignation of the Trustee that
acts as the Delaware Trustee shall be
effective until a Successor Delaware
Trustee has been appointed and has accepted
such appointment by instrument executed by
such Successor Delaware Trustee and
delivered to the Trust, the Sponsor and the
resigning Delaware Trustee; and
(iii) no such resignation of a Special Regular
Trustee shall be effective until the 60th
day following delivery of the Resignation
Request to the Sponsor and the Trust or
such later date specified in the
Resignation Request during which period the
Holders of the Preferred Securities shall
have the right to appoint a successor
Special Regular Trustee as provided in this
Article V.
(e) If no Successor Institutional Trustee or Successor
Delaware Trustee shall have been appointed and accepted
appointment as provided in this Section 5.2 within 60
days after delivery to the Sponsor and the Trust of a
Resignation Request, the resigning Institutional
Trustee or Delaware Trustee may petition any court of
competent jurisdiction for appointment of a Successor
Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon after such notice, if any, as
32
it may deem proper and prescribe, appoint a Successor
Institutional Trustee or Successor Delaware Trustee, as
the case may be.
SECTION 5.3 Vacancies Among Trustees.
------------------------
If a Trustee ceases to hold office for any reason
and the number of Trustees is not reduced pursuant to
Section 5.1 or if the number of Trustees is increased
pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by a
majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy
shall be filled with a Trustee appointed in accordance with
the requirements of this Article V.
SECTION 5.4 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal,
bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee, or any one of
them, shall not operate to annul the Trust. Whenever a
vacancy in the number of Regular Trustees shall occur until
such vacancy is filled as provided in this Article V, the
Regular Trustees in office, regardless of their number,
shall have all the powers granted to the Regular Trustees
and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.5 Meetings.
--------
Meetings of the Regular Trustees shall be held
from time to time upon the call of any Trustee. Regular
meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice
of any in-person meetings of the Regular Trustees shall be
hand delivered or otherwise delivered in writing (including
by facsimile, with a hard copy by overnight courier) not
less than 48 hours before such meeting. Notice of any
telephonic meetings of the Regular Trustees or any committee
thereof shall be hand delivered or otherwise delivered in
writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting.
Notices shall contain a brief statement of the time, place
and anticipated purposes of the meeting. The presence
(whether in person or by telephone) of a Regular Trustee at
a meeting shall constitute a waiver of notice of such
meeting except where a Regular Trustee attends a meeting for
the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in
33
this Declaration, any action of the Regular Trustees may be
taken at a meeting by vote of a majority of the Regular
Trustees present (whether in person or by telephone) and
eligible to vote with respect to such matter, provided that
a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees.
SECTION 5.6 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the
purpose of executing any registration statement or amendment
thereto or other document or schedule filed with the
Commission or making any other governmental filing
(including, without limitation to filings referred to in
Section 3.11).
(b) The Regular Trustees shall have power to
delegate from time to time to such of their number or to
officers of the Trust the doing of such things and the
execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as
the Regular Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary
to the provisions of the Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive periodic distributions,
redemption payments and liquidation distributions in
accordance with the applicable terms of the relevant
Holder's Securities ("Distributions"). Distributions shall
be made to the Holders of Preferred Securities and Common
Securities in accordance with the terms of the Securities as
set forth in Exhibits B and C hereto. If and to the extent
that Holdings makes a payment of interest (including
Compounded Interest (as defined in the Indenture)), premium
and principal on the Debentures held by the Institutional
Trustee (the amount of any such payment being a "Payment
Amount"), the Institutional Trustee shall and is directed to
promptly make a Distribution of the Payment Amount to
Holders in accordance with the terms of the Securities as
set forth in Exhibits B and C hereto.
34
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
---------------------------------------
(a) The Regular Trustees shall issue on behalf of
the Trust securities in fully registered form representing
undivided beneficial interests in the assets of the Trust in
accordance with Section 7.1(b) and for the consideration
specified in Section 3.3.
(b) The Regular Trustees shall issue on behalf of
the Trust one class of preferred securities representing
undivided beneficial interests in the assets of the Trust
having such terms as are set forth in Exhibit B (the
"Preferred Securities") which terms are incorporated by
reference in, and made a part of, this Declaration as if
specifically set forth herein, and one class of common
securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth
in Exhibit C (the "Common Securities") which terms are
incorporated by reference in, and made a part of, this
Declaration as if specifically set forth herein. The Trust
shall have no securities or other interests in the assets of
the Trust other than the Preferred Securities and the Common
Securities.
(c) The Certificates shall be signed on behalf of
the Trust by the Regular Trustees (or if there are more than
two Regular Trustees by any two of the Regular Trustees).
Such signatures may be the manual or facsimile signatures of
the present or any future Regular Trustee. Typographical
and other minor errors or defects in any such reproduction
of any such signature shall not affect the validity of any
Security. In case any Regular Trustee of the Trust who
shall have signed any of the Certificates shall cease to be
such Regular Trustee before the Certificate so signed shall
be delivered by the Trust, such Certificate nevertheless may
be delivered as though the person who signed such
Certificate had not ceased to be such Regular Trustee; and
any Certificate may be signed on behalf of the Trust by such
persons as, at the actual date of the execution of such
Security, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the
Declaration any such person was not such a Regular Trustee.
Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or
other marks of identification or designation and such
35
legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which
Securities may be listed, or to conform to usage. Pending
the preparation of definitive Certificates, the Regular
Trustees on behalf of the Trust may execute temporary
Certificates (printed, lithographed or typewritten), in
substantially in the form of the definitive Certificates in
lieu of which they are issued, but with such omissions,
insertions and variations as may be appropriate for
temporary Certificates all as may be determined by the
Regular Trustees. Each temporary Certificate shall be
executed by the Regular Trustees on behalf of the Trust upon
the same conditions and in substantially the same manner,
and with like effect, as definitive Certificates. Without
unnecessary delay, the Regular Trustees on behalf of the
Trust will execute and furnish definitive Certificates and
thereupon any or all temporary Certificates may be
surrendered to the transfer agent and registrar in exchange
therefor (without charge to the Holders). Each Certificate
whether in temporary or definitive form shall be
countersigned by the manual or facsimile signature of an
authorized signatory of the Person acting as registrar and
transfer agent for the Securities, which shall initially be
the Institutional Trustee.
(d) The consideration received by the Trust for
the issuance of the Securities shall constitute a
contribution to the capital of the Trust and shall not
constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided
in this Declaration, the Securities so issued shall be
deemed to be validly issued, fully paid and non-assessable.
(f) Every Person, by virtue of having become a
Holder or a Preferred Security Beneficial Owner in
accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms
of, and shall be bound by this Declaration.
(g) Upon issuance of the Securities as provided
in this Declaration, the Regular Trustees on behalf of the
Trust shall return to Holdings the $10 constituting initial
trust assets as set forth in the Original Declaration.
36
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
--------------------
This Declaration and the Trust shall terminate and
be of no further force or effect when:
(i) all of the Securities shall have been called
for redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders of
Securities in accordance with the terms of the
Securities; or
(ii) all of the Debentures shall have been
distributed to the Holders of Securities in exchange
for all of the Securities in accordance with the terms
of the Securities; or
(iii) upon the expiration of the term of the Trust
as set forth in Section 3.15,
and a certificate of cancellation is filed by the Trustees
with the Secretary of State of the State of Delaware. The
Trustees shall so file such a certificate as soon as
practicable after the occurrence of an event referred to in
this Section 8.1.
The provisions of Sections 3.10 and 4.2 and
Article X shall survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole
or in part, in accordance with the terms and conditions set
forth in this Declaration. Any transfer or purported
transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Preferred
Securities shall be freely transferable.
(c) Subject to this Article IX, Holdings and any
Related Party may only transfer Common Securities to
Holdings or a Related Party, provided that any such transfer
shall be subject to the condition that the transferor shall
have obtained (1) either a ruling from the Internal Revenue
37
Service or an unqualified written opinion addressed to the
Trust and delivered to the Trustees of nationally recognized
independent tax counsel experienced in such matters to the
effect that such transfer will not (i) cause the Trust to be
treated as issuing a class of interests in the Trust
differing from the class of interests represented by the
Common Securities originally issued to Holdings, (ii) result
in the Trust acquiring or disposing of, or being deemed to
have acquired or disposed of, an asset, or (iii) result in
or cause the Trust to be treated as anything other than a
grantor trust for United States federal income tax purposes
and (2) an unqualified written opinion addressed to the
Trust and delivered to the Trustees of a nationally
recognized independent counsel experienced in such matters
that such transfer will not cause the Trust to be an
Investment Company or controlled by an Investment Company.
SECTION 9.2 Transfer of Certificates.
------------------------
The Regular Trustees shall provide for the
registration of Certificates and of transfers of
Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees
may require) in respect of any tax or other government
charges which may be imposed in relation to it. Upon
surrender for registration of transfer of any Certificate,
the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated
transferee or transferees. Every Certificate surrendered
for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the
Regular Trustees duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer shall
be canceled by the Regular Trustees. A transferee of a
Certificate shall be entitled to the rights and subject to
the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed
to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name
any Certificate shall be registered on the books and records
of the Trust as the sole holder of such Certificate and of
the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize
any equitable or other claim to or interest in such
Certificate or in the Securities represented by such
38
Certificate on the part of any Person, whether or not the
Trustees shall have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
--------------------
The Preferred Securities Certificates, on original
issuance, will be issued in fully registered form. With
respect to any Certificates registered on the books and
records of the Trust in the name of a Clearing Agency or the
nominee of a Clearing Agency:
(i) the Trust and the Trustees shall be entitled
to deal with the Clearing Agency for all purposes of
this Declaration (including the payment of
Distributions on such Certificates and receiving
approvals, votes or consents hereunder) as the
Preferred Security Holder and the sole holder of such
Certificates and, except as set forth herein, shall
have no obligation to the Preferred Security Beneficial
Owners;
(ii) to the extent that the provisions of this
Section 9.4 conflict with any other provisions of this
Declaration, the provisions of this Section 9.4 shall
control; and
(iii) the rights of the Preferred Security
Beneficial Owners shall be exercised only through the
Clearing Agency and shall be limited to those
established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing
Agency and/or the Clearing Agency Participants. The
Clearing Agency will make book entry transfers among
Clearing Agency Participants and receive and transmit
payments of Distributions on such Certificates to such
Clearing Agency Participants.
SECTION 9.5 Notices to Holders of Certificates.
----------------------------------
Whenever a notice or other communication to the
Holders is required to be given under this Declaration, the
relevant Trustees shall give such notices and communications
to the Holders and, with respect to any Preferred Security
Certificate registered in the name of a Clearing Agency or
the nominee of a Clearing Agency, the Trustees shall, except
as set forth herein, have no obligations to the Preferred
Security Beneficial Owners.
39
SECTION 9.6 Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its
services as securities depository with respect to the
Preferred Securities, the Regular Trustees may, in their
sole discretion, appoint a successor Clearing Agency with
respect to the Preferred Securities.
SECTION 9.7 Definitive Preferred Securities Certificates.
--------------------------------------------
If (i) a Clearing Agency elects to discontinue its
services as securities depository with respect to the
Preferred Securities and a successor Clearing Agency is not
appointed within 90 days after such discontinuance pursuant
to Section 9.6 or (ii) the Regular Trustees elect after
consultation with the Sponsor to terminate the book entry
system through the Clearing Agency with respect to the
Preferred Securities, then upon surrender of the
Certificates representing the Book Entry Interests with
respect to the Preferred Securities by the Clearing Agency,
accompanied by registration instructions, the Regular
Trustees shall cause definitive Preferred Security
Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall
be liable for any delay in delivery of such instructions and
each of them may conclusively rely on and shall be protected
in relying on, such instructions.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates.
------------------------------------
If (a) any mutilated Certificates should be
surrendered to the Regular Trustees, or if the Regular
Trustees shall receive evidence to their satisfaction of the
destruction, loss or theft of any Certificate; and (b)
there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to keep
each of them harmless, then in the absence of notice that
such Certificate shall have been acquired by a bona fide
purchaser, any two Regular Trustees on behalf of the Trust
shall execute and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like denomination. In connection with the
issuance of any new Certificate under this Section 9.8, the
Regular Trustees may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section shall constitute conclusive
evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the
40
lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 10.1 Exculpation.
-----------
(a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the
Trust or any Covered Person for any loss, damage or claim
incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or
by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of
such Indemnified Person's gross negligence (or, in the case
of the Institutional Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully
protected in relying in good faith upon the records of the
Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are
within such other Person's professional or expert competence
and who has been selected with reasonable care by or on
behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be
paid.
(c) Pursuant to Sec. 3803 (a) of the Business Trust
Act, the Holders of Securities, in their capacities as
Holders, shall be entitled to the same limitation of
liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of
the State of Delaware.
SECTION 10.2 Indemnification.
---------------
(a) To the fullest extent permitted by applicable
law, the Sponsor shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage or
claim incurred by such Indemnified Person by reason of any
act or omission performed or omitted by such Indemnified
41
Person in good faith on behalf of the Trust and in a manner
such Indemnified Person reasonably believed to be within the
scope of authority conferred on such Indemnified Person by
this Declaration, except that no Indemnified Person shall be
entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Institutional Trustee,
negligence) or willful misconduct with respect to such acts
or omissions.
(b) To the fullest extent permitted by applicable
law, expenses (including legal fees) incurred by an
Indemnified Person in defending any claim, demand, action,
suit or proceeding shall, from time to time, be advanced by
the Sponsor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the
Sponsor of an undertaking by or on behalf of the Indemnified
Person to repay such amount if it shall be determined that
the Indemnified Person is not entitled to be indemnified as
authorized in Section 10.2(a).
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall
be the calendar year, or such other year as is required by
the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the
Trust, the Regular Trustees shall keep, or cause to be kept,
full books of account, records and supporting documents,
which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on
the accrual method of accounting, in accordance with
generally accepted accounting principles, consistently
applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes.
The books and records of the Trust, together with a copy of
this Declaration and a certified copy of the Certificate of
Trust, or any amendment thereto, shall at all times be
maintained at the principal office of the Trust and shall be
open for inspection for any examination by any Holder or its
duly authorized representative for any purpose reasonably
related to its interest in the Trust during normal business
hours.
42
(b) The Regular Trustees shall, as soon as
available after the end of each Fiscal Year of the Trust,
cause to be prepared and mailed to each Holder of Securities
unaudited financial statements of the Trust for such Fiscal
Year, prepared in accordance with generally accepted
accounting principles, provided that if the Trust is
required to comply with the periodic reporting requirements
of Sections 13(a) or 15(d) of the Exchange Act, such
financial statements for such Fiscal Year shall be examined
and reported on by a firm of independent certified public
accountants selected by the Regular Trustees (which firm may
be the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be
prepared and mailed to each Holder of Securities, an annual
United States federal income tax information statement, on
such form as is required by the Code, containing such
information with regard to the Securities held by each
Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to
deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements
within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be
prepared and filed with the appropriate taxing authority,
an annual United States federal income tax return, on such
form as is required by the Code, and any other annual income
tax returns required to be filed by the Regular Trustees on
behalf of the Trust with any state or local taxing
authority, such returns to be filed as soon as practicable
after the end of each Fiscal Year of the Trust.
SECTION 11.3 Banking.
-------
The Trust shall maintain one or more bank accounts
in the name and for the sole benefit of the Trust. The sole
signatories for such accounts shall be designated by the
Regular Trustees.
SECTION 11.4 Withholding.
-----------
The Trust and the Trustees shall comply with all
withholding requirements under United States federal, state
and local law. The Trust shall request, and the Holders
shall provide to the Trust, such forms or certificates as
are necessary to establish an exemption from withholding
with respect to each Holder, and any representations and
forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling,
43
its withholding obligations. The Trust shall file required
forms with applicable jurisdictions and, unless an exemption
from withholding is properly established by a Holder, shall
remit amounts withheld with respect to the Holder to
applicable jurisdictions. To the extent that the Trust is
required to withhold and pay over any amounts to any
authority with respect to distributions or allocations to
any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder.
In the event of any claimed overwithholding, Holders shall
be limited to an action against the applicable jurisdiction.
If the amount to be withheld was not withheld from a
Distribution, the Trust may reduce subsequent Distributions
by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
----------
(a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities,
this Declaration may be amended by, and only by, a written
instrument executed by a majority of the Regular Trustees;
provided, however, that (i) no amendment to this Declaration
-------- -------
shall be made unless the Regular Trustees shall have
obtained (A) either a ruling from the Internal Revenue
Service or a written unqualified opinion of nationally
recognized independent tax counsel experienced in such
matters to the effect that such amendment will not cause the
Trust to be classified for United States federal income tax
purposes as an association taxable as a corporation or a
partnership and to the effect that the Trust will continue
to be treated as a grantor trust for purposes of United
States federal income taxation and (B) a written unqualified
opinion of nationally recognized independent counsel
experienced in such matters to the effect that such
amendment will not cause the Trust to be an Investment
Company which is required to be registered under the
Investment Company Act, (ii) at such time after the Trust
has issued any Securities which remain outstanding, any
amendment which would adversely affect the rights,
privileges or preferences of any Holder of Securities may be
effected only with such additional requirements as may be
set forth in the terms of such Securities, (iii) Section
4.2, Section 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders of the
Securities, (iv) no amendment which adversely affects the
rights, powers and privileges of the Institutional Trustee
shall be made without the consent of the Institutional
44
Trustee, (v) Article IV shall not be amended without the
consent of the Sponsor, (vi) the rights of Holders of Common
Securities under Article V to increase or decrease the
number of, and to appoint, replace or remove, Trustees
(other than a Special Regular Trustee) shall not be amended
without the consent of each Holder of Common Securities and
(vii) the rights of Holders of Preferred Securities to
appoint or remove a Special Regular Trustee shall not be
amended without the consent of each Holder of Preferred
Securities.
(b) Notwithstanding Section 12.2(a)(ii), this
Declaration may be amended without the consent of the
Holders of the Securities to (i) cure any ambiguity, (ii)
correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of
this Declaration, (iii) to add to the covenants,
restrictions or obligations of the Sponsor, and (iv) to
conform to any changes in Rule 3a-5 or any change in
interpretation or application of Rule 3a-5 by the
Commission, which amendment does not adversely affect the
rights, preferences or privileges of the Holders.
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent.
--------------------------------------
(a) Meetings of the Holders of Preferred
Securities and/or Common Securities may be called at any
time by the Regular Trustees (or as provided in the terms of
the Securities) to consider and act on any matter on which
Holders of such class of Securities are entitled to act
under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading.
The Regular Trustees shall call a meeting of Holders of
Preferred Securities or Common Securities, if directed to do
so by Holders of at least 10% in liquidation amount of such
class of Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish
to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising
the right to call a meeting and only those specified
Certificates shall be counted for purposes of determining
whether the required percentage set forth in the second
sentence of this paragraph has been met.
45
(b) Except to the extent otherwise provided in
the terms of the Securities, the following provision shall
apply to meetings of Holders of Securities:
(i) Notice of any such meeting shall be given by
mail to all the Holders of Securities having a right to
vote thereat not less than 7 days nor more than 60 days
prior to the date of such meeting. Whenever a vote,
consent or approval of the Holders of Securities is
permitted or required under this Declaration or the
rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of
the Holders of Securities. Any action that may be
taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting
forth the action so taken is signed by Holders of
Securities owning not less than the minimum aggregate
liquidation amount of Securities that would be
necessary to authorize or take such action at a meeting
at which all Holders of Securities having a right to
vote thereon were present and voting. Prompt notice of
the taking of action without a meeting shall be given
to the Holders of Securities entitled to vote who have
not consented in writing. The Regular Trustees may
specify that any written ballot submitted to the
Holders of Securities for the purpose of taking any
action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any
Person to act for it by proxy on all matters in which a
Holder of a Security is entitled to participate,
including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid
after the expiration of 11 months from the date thereof
unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Holder of the
Security executing it. Except as otherwise provided
herein or in the terms of the Securities, all matters
relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the
State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a
Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities
shall be conducted by the Regular Trustees or by such
other Person that the Regular Trustees may designate.
46
(iv) Unless otherwise provided in the Business
Trust Act, this Declaration or the rules of any stock
exchange on which the Preferred Securities are then
listed or admitted for trading, the Regular Trustees,
in their sole discretion, shall establish all other
provisions relating to meetings of Holders of
Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be
voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of
Institutional Trustee.
---------------------------------
(a) The Trustee which acts as initial
Institutional Trustee represents and warrants to the Trust
and to the Sponsor at the date of this Declaration, and each
Successor Institutional Trustee represents and warrants to
the Trust and the Sponsor at the time of the Successor
Institutional Trustee's acceptance of its appointment as
Institutional Trustee that:
(i) The Institutional Trustee is a banking
corporation with trust powers, duly organized,
validly existing and in good standing under the
laws of the State of its incorporation, with trust
power and authority to execute and deliver, and to
carry out and perform its obligations under the
terms of, this Declaration.
(ii) The execution, delivery and performance
by the Institutional Trustee of this Declaration
has been duly authorized by all necessary
corporate action on the part of the Institutional
Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and
constitutes a legal, valid and binding obligation
of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting
creditors' rights generally and to general
principles of equity and the discretion of the
47
court (regardless of whether the enforcement of
such remedies is considered in a proceeding in
equity or at law).
(iii) The execution, delivery and performance
of this Declaration by the Institutional Trustee
does not conflict with or constitute a breach of
the Charter or By-laws of the Institutional
Trustee.
(iv) No consent, approval or authorization
of, or registration with or notice to, any banking
authority which supervises or regulates the
Institutional Trustee is required for the
execution, delivery or performance by the
Institutional Trustee, of this Declaration.
(v) The Institutional Trustee satisfies the
qualifications set forth in Section 5.1(c).
(b) The Trustee which acts as initial Delaware
Trustee represents and warrants to the Trust and the Sponsor
at the date of this Declaration, and each Successor Delaware
Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance
of its appointment as Delaware Trustee, that it satisfies
the qualifications set forth in Section 5.1(a)(3).
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
-------
All notices provided for in this Declaration shall
be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by first class
mail, as follows:
(a) if given to the Trust, in care of the Regular
Trustees at the Trust's mailing address set forth below
(or such other address as the Regular Trustees on
behalf of the Trust may give notice of to the Holders
of the Securities):
48
RJR Nabisco Holdings Capital Trust I
c/o RJR Nabisco Holdings Corp.
1301 Avenue of the Americas
New York, New York 10019
Attention: Trustees
Facsimile No: (212) 969-9173
(b) if given to the Institutional Trustee, at the
mailing address of the Institutional Trustee set forth
below (or such other address as the Institutional
Trustee may give notice of to the Holders of the
Securities):
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust
Facsimile No: (212) 571-3050
(c) if given to the Delaware Trustee, at the
mailing address of the Delaware Trustee set forth below
(or such other address as the Delaware Trustee may give
notice of to the Holders of the Securities):
The Bank of New York (Delaware)
[Address]
Wilmington, Delaware [ ]
Attention: [ ]
Facsimile No: [ ]
(d) if given to the Holder of the Common
Securities, at the mailing address of the Sponsor set
forth below (or such other address as the Holder of the
Common Securities may give notice to the Trust):
RJR Nabisco Holdings Corp.
1301 Avenue of the Americas
New York, New York 10019
Facsimile No. (212) 969-9173
(e) if given to any other Holder, at the address
set forth on the books and records of the Trust.
A copy of any notice to the Institutional Trustee
or the Delaware Trustee shall also be sent to the Trust.
All notices shall be deemed to have been given, when
received in person, telecopied with receipt confirmed, or
mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to
49
have been delivered on the date of such refusal or inability
to deliver.
SECTION 14.2 Undertaking for Costs.
---------------------
All parties to this Declaration agree, and each
Holder of any Securities by his or her acceptance thereof
shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any
right or remedy under this Declaration, or in any suit
against the Institutional Trustee for any action taken or
omitted by it as Institutional Trustee, the filing by any
party litigant in such suit of an undertaking to pay the
costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims
or defenses made by such party litigant; but the provisions
of this Section 14.2 shall not apply to any suit instituted
by the Institutional Trustee, to any suit instituted by any
Holder of Preferred Securities, or group of Holders of
Preferred Securities, holding more than 10% in aggregate
liquidation amount of the outstanding Preferred Securities,
or to any suit instituted by any Holder of Preferred
Securities for the enforcement of the payment of the
principal of (or premium, if any) or interest on the
Debentures, on or after the respective due dates expressed
in such Debentures.
SECTION 14.3 Governing Law.
-------------
This Declaration and the rights of the parties
hereunder shall be governed by and interpreted in accordance
with the laws of the State of Delaware and all rights and
remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.4 Headings.
--------
Headings contained in this Declaration are
inserted for convenience of reference only and do not affect
the interpretation of this Declaration or any provision
hereof.
SECTION 14.5 Partial Enforceability.
----------------------
If any provision of this Declaration, or the
application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or
the application of such provision to persons or
50
circumstances other than those to which it is held invalid,
shall not be affected thereby.
SECTION 14.6 Counterparts.
------------
This Declaration may contain more than one
counterpart of the signature pages and this Declaration may
be executed by the affixing of the signature of the Sponsor
and each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages
shall be read as though one, and they shall have the same
force and effect as though all of the signers had signed a
single signature page.
SECTION 14.7 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the
Trust not be classified for United States federal income tax
purposes an association taxable as a corporation or
partnership but that the Trust be treated as a grantor trust
for United States federal income tax purposes. The
provisions of this Declaration shall be interpreted to
further this intention of the parties.
SECTION 14.8 Successors and Assigns.
----------------------
Whenever in this Declaration any of the parties
hereto is named or referred to, the successors and assigns
of such party shall be deemed to be included, and all
covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of
their respective successors and assigns, whether so
expressed.
51
IN WITNESS WHEREOF, the undersigned has caused
these presents to be executed as of the day and year first
above written.
RJR Nabisco Holdings Corp.
as Sponsor
By:______________________________
Name:
Title:
________________________________
as Trustee
--------------------------------
as Trustee
--------------------------------
as Trustee
as Trustee
By:
----------------------------
Name:
Title:
as Trustee
By:
----------------------------
Name:
Title:
52
There personally appeared before me ________ (on
behalf of RJR Nabisco Holdings Corp.) and
______________________________ who acknowledged the
foregoing instrument to be his or its free act and deed and
the free act and deed of RJR Nabisco Holdings Corp. and the
Trustees of RJR Nabisco Holdings Capital Trust I.
Before me,
-----------------------------
Notary Public
My Commission Expires:
-------------------------
53
There personally appeared before me
__________________ (on behalf of ____________________, as
Trustee) who acknowledged the foregoing instrument to be his
or its free act and deed and the free act and deed of
____________________, as Trustee.
Before me,
-----------------------------
Notary Public
My Commission Expires:
-------------------------
There personally appeared before me
__________________ (on behalf of ____________________
(Delaware), as Trustee) who acknowledged the foregoing
instrument to be his or its free act and deed and the free
act and deed of _______________________________, as Trustee.
Before me,
-----------------------------
Notary Public
My Commission Expires:
-------------------------
54
EXHIBIT A
CERTIFICATE OF TRUST
OF
RJR NABISCO HOLDINGS CAPITAL TRUST I
THIS Certificate of Trust of RJR Nabisco Holdings
Capital Trust I (the "Trust"), dated ________, 1995, is
being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. Code Sec. 3801 et seq.).
--- ---- -- ---
1. Name. The name of the business trust being
----
formed hereby is RJR Nabisco Holdings Capital Trust I.
2. Delaware Trustee. The name and business
----------------
address of the trustee of the Trust with a principal place
of business in the State of Delaware is ____________________
____________________________________________________________
__________________________________________________________.
3. Effective Date. This Certificate of Trust
--------------
shall be effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole
trustees of the Trust, have executed this Certificate of Trust
as of the date first above written.
_______________________________,
as Trustee
By:
------------------------
Name:
Title:
____________________,
as Trustee
By:
------------------------
Name:
Title:
----------------------------
________________,
as Trustee
----------------------------
_________________,
as Trustee
----------------------------
_________________,
as Trustee
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.1 of the Amended and
Restated Declaration of Trust of RJR Nabisco Holdings
Capital Trust I dated as of June __, 1995 (as amended from
time to time, the "Declaration"), the designations, rights,
privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth below
(each capitalized term used but not defined herein having
the meaning set forth in the Declaration):
1. Designation and Number. Preferred Securities
of the Trust with an aggregate liquidation amount in the
assets of the Trust of ______________________________
______________________________________________________ and a
liquidation amount in the assets of the Trust of $25 per
Preferred Security, are hereby designated as "____% Trust
Originated Preferred Securities". The Preferred Security
Certificates evidencing the Preferred Securities shall be
substantially in the form attached hereto as Annex I, with
such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to
conform to the rules of any stock exchange on which the
Preferred Securities are listed. The Preferred Securities
shall be issued to former holders of Depositary Shares
("Depository Shares") each representing 1/1000 of a share of
Series B Cumulative Preferred Stock (the "Series B
Preferred"), of RJR Nabisco Holdings Corp. ("Holdings") in
exchange for such Depository Shares pursuant to the Offer.
In connection with such Offer and the purchase by Holdings
of the Common Securities, Holdings will deposit in the
Trust, and the Trust will purchase, respectively, as trust
assets Debentures of Holdings having an aggregate principal
amount equal to $__________, and bearing interest at an
annual rate equal to the annual Distribution rate on the
Preferred Securities and Common Securities and having
payment and redemption provisions which correspond to the
payment and redemption provisions of the Preferred
Securities and Common Securities.
2. Distributions. (a) Periodic distributions
payable on each Preferred Security will be fixed at a rate
per annum of ____% (the "Coupon Rate") of the stated
liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will bear
interest at the rate per annum of ____% thereof, compounded
quarterly to the extent permitted by law. The term
"Distributions" as used in these terms means such periodic
cash distributions and any such interest payable unless
otherwise stated. A Distribution will be made by the
Institutional Trustee only to the extent that interest
payments are made in respect of the Debentures held by the
Trust. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period
on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution
period for which Distributions are computed, Distributions
will be computed on the basis of the actual number of days
elapsed in such a 30-day month.
(b) Distributions on the Preferred Securities
will be cumulative, will accrue from ______, 1995 and will
be payable quarterly in arrears, on March 31, June 30,
September 30 and December 31 of each year, commencing on
September 30, 1995, except as otherwise described below, but
only if and to the extent that interest payments are made in
respect of the Debentures held by the Trust. In addition,
holders of Preferred Securities will be entitled to a cash
distribution at the rate of 9 1/4% per annum of the
liquidation amount thereof from June 1, 1995 through ______,
1995, payable on September 30, 1995 ("Pre-Issuance
Interest"). With the exception of Pre-Issuance Interest, so
long as Holdings shall not be in default in the payment of
interest on the Debentures, Holdings has the right under the
Indenture for the Debentures to defer payments of interest
by extending the interest payment period from time to time
on the Debentures for a period not exceeding 20 consecutive
quarterly interest periods (each, an "Extension Period")
and, as a consequence, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by
applicable law) at the rate of ____% per annum, compounded
quarterly to the extent permitted by law during any such
Extension Period. Prior to the termination of any such
Extension Period, Holdings may further extend such Extension
Period; provided that such Extension Period together with
all such previous and further extensions thereof may not
exceed 20 consecutive quarterly interest periods and
provided further that no Extension Period may extend beyond
the maturity of the Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due,
Holdings may commence a new Extension Period, subject to the
2
above requirements. Payments of accrued Distributions will
be payable to Holders of Preferred Securities as they appear
on the books and records of the Trust on the record date for
the first payment occurring on or after the end of the
Extension Period.
(c) Distributions on the Preferred Securities
will be payable promptly by the Institutional Trustee (or
other Paying Agent) upon receipt of immediately available
funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates, which
will be the Business Day immediately prior to the relevant
Distribution date, which record and payment dates correspond
to the record and interest payment dates on the Debentures.
Distributions payable on any Preferred Securities that are
not punctually paid on any Distribution payment date as a
result of Holdings having failed to make the corresponding
interest payment on the Debentures will forthwith cease to
be payable to the person in whose name such Preferred
Security is registered on the relevant record date, and such
defaulted Distribution will instead be payable to the person
in whose name such Preferred Security is registered on the
special record date established by the Regular Trustees,
which record date shall correspond to the special record
date or other specified date determined in accordance with
the Indenture; provided, however, that Distributions shall
-------- -------
not be considered payable on any Distribution payment date
falling within an Extension Period unless Holdings has
elected to make a full or partial payment of interest
accrued on the Debentures on such Distribution payment date.
Subject to any applicable laws and regulations and the
provisions of the Declaration, each payment in respect of
the Preferred Securities will be made as described paragraph
9 hereof. If any date on which Distributions are payable on
the Preferred Securities is not a Business Day, then payment
of the Distribution 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 and the record date for such
payment shall be the immediately preceding Business Day.
(d) All Distributions paid with respect to the
Preferred Securities and the Common Securities will be paid
Pro Rata to the Holders thereof entitled thereto. If an
Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
3
(e) In the event that there is any money or other
property held by or for the Trust that is not accounted for
under the Declaration, such money or property shall be
distributed Pro Rata among the Holders of the Preferred
Securities and Common Securities.
3. Liquidation Distribution Upon Dissolution. In
the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the
Preferred Securities and Common Securities at the date of
the dissolution, winding-up or termination, as the case may
be, will be entitled to receive Pro Rata solely out of the
assets of the Trust available for distribution to Holders of
Preferred Securities and Common Securities after
satisfaction of liabilities to creditors, an amount equal to
the aggregate of the stated liquidation amount of $25 per
Preferred Security and Common Security plus accrued and
unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination,
and after satisfaction of liabilities to creditors,
Debentures in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Preferred
Securities and Common Securities and bearing accrued and
unpaid interest in an amount equal to the accrued and unpaid
Distributions on, such Preferred Securities and Common
Securities, shall be distributed Pro Rata to the Holders of
the Preferred Securities and Common Securities in exchange
for such Securities.
If, upon any such dissolution, the Liquidation
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 Preferred Securities and Common
Securities shall be paid, subject to the next paragraph, on
a Pro Rata basis.
Holders of Common Securities will be entitled to
receive Liquidation Distributions upon any such dissolution
Pro Rata with Holders of Preferred Securities, except that
if an Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures.
The Preferred Securities and Common Securities may only be
redeemed if Debentures having an aggregate principal amount
equal to the aggregate liquidation amount of the Preferred
Securities and Common Securities are repaid, redeemed or
distributed as set forth below:
4
(a) Upon the repayment of the Debentures, in
whole or in part, whether at maturity, upon redemption at
any time or from time to time on or after August 19, 1998,
the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities
having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so repaid or
redeemed, upon not less than 30 nor more than 60 days'
notice, at a redemption price of $25 per Preferred and
Common Security plus an amount equal to accrued and unpaid
Distributions thereon to the date of redemption, payable in
cash (the "Redemption Price"). The date of any such
repayment or redemption of Preferred Securities and Common
Securities shall be established to coincide with the
repayment or redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred
Securities and Common Securities are to be so redeemed, the
Preferred Securities and the Common Securities will be
redeemed Pro Rata and the Preferred Securities to be
redeemed will be redeemed as described in paragraph 4(f)(ii)
below. If a partial redemption 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, Holdings pursuant to
the Indenture will only redeem Debentures in whole and, as a
result, the Trust may only redeem the Preferred Securities
in whole.
(c) If, at any time, a Tax Event or an Investment
Company Event (each as hereinafter defined, and each a
"Special Event") shall occur and be continuing, the Regular
Trustees shall, unless the Debentures are redeemed in the
limited circumstances described below, dissolve the Trust
and, after satisfaction of creditors, cause Debentures held
by the Institutional Trustee having an aggregate principal
amount equal to the aggregate stated liquidation amount of
and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for
payment as the Preferred Securities and Common Securities,
to be distributed to the Holders of the Preferred Securities
and Common Securities on a Pro Rata basis in liquidation of
such Holders' interests in the Trust, within 90 days
following the occurrence of such Special Event (the "90 Day
Period"), provided, however, that in the case of the
-------- -------
occurrence of a Tax Event, as a condition of such
dissolution and distribution, the Regular Trustees shall
have received an opinion of a nationally recognized
independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on any then
applicable published revenue ruling of the Internal Revenue
5
Service, to the effect that the Holders of the Preferred
Securities will not recognize any gain or loss for United
States federal income tax purposes as a result of the
dissolution of the Trust and distribution of Debentures; and
provided, further, that, if and as long as at the time there
is available to the Trust the opportunity to eliminate,
within the 90 Day Period, the Special Event by taking some
ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure
that has no adverse effect on the Trust, Holdings, or the
Holders of the Preferred Securities ("Ministerial Action"),
the Trust will pursue such measure in lieu of dissolution.
If in the case of the occurrence of a Tax Event,
(i) the Regular Trustees have received an opinion (a
"Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as
a result of a Tax Event, there is more than an insubstantial
risk that Holdings would be precluded from deducting the
interest on the Debentures for United States federal income
tax purposes even if the Debentures were distributed to the
Holders of Preferred Securities and Common Securities in
liquidation of such Holder's interest in the Trust as
described in this paragraph 4(c) or (ii) the Regular
Trustees shall have been informed by such tax counsel that a
No Recognition Opinion cannot be delivered to the Trust,
Holdings shall have the right at any time, upon not less
than 30 nor more than 60 days notice, to redeem the
Debentures in whole or in part for cash at the Redemption
Price within 90 days following the occurrence of such Tax
Event, and promptly following such redemption Preferred
Securities and Common Securities with an aggregate
liquidation amount equal to the aggregate principal amount
of the Debentures so redeemed will be redeemed by the Trust
at the Redemption Price on a Pro Rata basis; provided,
however, that, if at the time there is available to Holdings
or the Regular Trustees on behalf of the Trust the
opportunity to eliminate, within such 90 day period, the Tax
Event by taking some Ministerial Action, Holdings or the
Regular Trustees on behalf of the Trust will pursue such
measure in lieu of redemption and provided further that
Holdings shall have no right to redeem the Debentures while
the Regular Trustees on behalf of the Trust are pursuing
such Ministerial Action. The Common Securities will be
redeemed Pro Rata with the Preferred Securities, except if
an Event of Default under the Indenture has occurred and is
continuing, the Preferred Securities will have a priority
over the Common Securities with respect to payment of the
Redemption Price.
6
"Tax Event" means that the Regular Trustees shall
have obtained an opinion of nationally recognized
independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that on or after
______, 1995 as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws
(or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an
interpretation or application of any such laws or
regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of
any legislation and the publication of any judicial decision
or regulatory determination), (c) any interpretation or
pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore
generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment
or change is enacted, promulgated, issued or announced or
which interpretation or pronouncement is issued or announced
or which action is taken, in each case on or after ______,
1995, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof,
subject to United States federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust
is, or will be within 90 days of the date thereof, subject
to more than a de minimis amount of taxes, duties or other
governmental charges or (iii) interest payable by Holdings
to the Trust on the Debentures is not, or within 90 days of
the date thereof will not be, deductible by Holdings for
United States federal income tax purposes.
"Investment Company Event" means that the Regular
Trustees shall have received an opinion of nationally
recognized independent counsel experienced in practice under
the Investment Company Act 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 Investment Company Act, which Change in
1940 Act Law becomes effective on or after ______, 1995.
On the date fixed for any distribution of
Debentures, upon dissolution of the Trust, (i) the Preferred
Securities will no longer be deemed to be outstanding and
(ii) certificates representing Preferred Securities will be
deemed to represent beneficial interests in the Debentures
having an aggregate principal amount equal to the stated
7
liquidation amount of, and bearing accrued and unpaid
interest equal to accrued and unpaid Distributions on, such
Preferred Securities until such certificates are presented
to Holdings or its agent for transfer or reissuance.
(d) The Trust may not redeem fewer than all the
outstanding Preferred Securities unless all accrued and
unpaid Distributions have been paid on all Preferred
Securities for all quarterly Distribution periods
terminating on or prior to the date of redemption.
(e) If Debentures are distributed to Holders of
the Preferred Securities, Holdings, pursuant to the terms of
the Indenture, will use its best efforts to have the
Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Debentures.
(f) (i) Notice of any redemption of, or notice
of distribution of Debentures in exchange for, the Preferred
Securities and Common Securities (a "Redemption/Distribution
Notice") will be given by the Regular Trustees on behalf of
the Trust by mail to each Holder of Preferred Securities and
Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for
redemption or exchange thereof. For purposes of the
calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this paragraph
(f)(i), a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed by first-
class mail, postage prepaid, to Holders of Preferred
Securities and Common Securities. Each Redemption/
Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of
each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/Distribution Notice or
in the mailing of either thereof with respect to any Holder
shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the
outstanding Preferred Securities are to be redeemed, the
Preferred Securities to be redeemed will be redeemed Pro
Rata from each Holder of Preferred Securities, it being
understood that, in respect of Preferred Securities
registered in the name of and held of record by DTC (or
successor Clearing Agency) or any other nominee, the
distribution of the proceeds of such redemption will be made
to each Clearing Agency Participant (or person on whose
behalf such nominee holds such securities) in accordance
with the procedures applied by such agency or nominee.
8
(iii) If the Trust gives a Redemption/
Distribution Notice in respect of a redemption of Preferred
Securities as provided in this paragraph 4 (which notice
will be irrevocable) then immediately prior to the close of
business on the redemption date, provided that Holdings has
paid to the Trust in immediately available funds a
sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, Distributions will
cease to accrue on the Preferred Securities called for
redemption, such Preferred Securities will no longer be
deemed to be outstanding and all rights of Holders of such
Preferred Securities so called for redemption will cease,
except the right of the Holders of such Preferred Securities
to receive the Redemption Price, but without interest on
such Redemption Price. Neither the Trustees nor the Trust
shall be required to register or cause to be registered the
transfer of any Preferred Securities which have been so
called for redemption. If any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of
the Redemption Price 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 falls in the next calendar
year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as
if made on such date fixed for redemption. If payment of
the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by the
Trust or by Holdings pursuant to the Preferred Securities
Guarantee, Distributions on such Preferred Securities will
continue to accrue, from the original redemption date to the
date of payment, in which case the actual payment date will
be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be
sent by the Regular Trustees on behalf of the Trust to the
Holders of the Preferred Securities.
(v) Upon the date of dissolution of the Trust and
distribution of Debentures as a result of the occurrence of
a Special Event, Preferred Security Certificates shall be
deemed to represent beneficial interests in the Debentures
so distributed, and the Preferred Securities will no longer
be deemed outstanding and may be canceled by the Regular
Trustees. The Debentures so distributed shall have an
aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities so
distributed.
9
(vi) Subject to the foregoing and applicable law
(including, without limitation, United States federal
securities laws), Holdings or any of its subsidiaries may at
any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by
private agreement.
5. Voting Rights. (a) Except as provided under
paragraph 5(b) below and as otherwise required by law and
the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) If (i) the Trust fails to make Distributions
in full on the Preferred Securities for 6 consecutive
quarterly Distribution periods; or (ii) an Event of Default
occurs and is continuing, (each, an "Appointment Event"),
then the Holders of the Preferred Securities, acting as a
single class, will be entitled by the vote of Holders of
Preferred Securities representing a Majority in liquidation
amount of the Preferred Securities to appoint a Special
Regular Trustee in accordance with paragraph 5.2(a)(ii)(B)
of the Declaration. Any Holder of Preferred Securities
(other than the Sponsor or any Affiliate of the Sponsor)
will have the right to nominate any Person to be appointed
as Special Regular Trustee. For purposes of determining
whether the Trust has failed to pay Distributions in full
for 6 consecutive quarterly Distribution periods,
Distributions shall be deemed to remain in arrears,
notwithstanding any payments in respect thereof, until full
cumulative Distributions have been or contemporaneously are
paid with respect to all quarterly Distribution periods
terminating on or prior to the date of payment of such
cumulative Distributions. Not later than 30 days after such
right to appoint a Special Regular Trustee arises, the
Regular Trustees will convene a meeting for the purpose of
appointing a Special Regular Trustee. If the Regular
Trustees fail to convene such meeting within such 30-day
period, the Holders of Preferred Securities representing 10%
in liquidation amount of the outstanding Preferred
Securities will be entitled to convene such meeting in
accordance with Section 12.2 of the Declaration. The record
date for such meeting will be the close of business on the
Business Day next preceding the day on which notice of the
meeting is sent to Holders of Preferred Securities. The
provisions of the Declaration relating to the convening and
conduct of the meetings of the Holders will apply with
respect to any such meeting. If, at any such meeting,
Holders of less than a Majority in liquidation amount of
Preferred Securities entitled to vote for the appointment of
a Special Regular Trustee vote for such appointment, no
Special Regular Trustee shall be appointed. Any Special
10
Regular Trustee may be removed without cause at any time by
the Holders of Preferred Securities representing a Majority
in liquidation amount of the Preferred Securities in
accordance with Section 5.2(a)(ii)(B) of the Declaration.
The Holders of 10% in liquidation amount of the Preferred
Securities will be entitled to convene such a meeting in
accordance with Section 12.2 of the Declaration. The record
date for such meeting will be the close of business on the
Business Day next preceding the day on which notice of the
meeting is sent to Holders of Preferred Securities. Any
Special Regular Trustee appointed shall cease to be a
Special Regular Trustee as provided in Section 5.2(c) of the
Declaration. Notwithstanding the appointment of any such
Special Regular Trustee, Holdings shall retain all rights
under the Indenture, including the right to extend the
interest payment period on Debentures, and any extension for
a period not exceeding 20 quarterly interest periods will
not constitute an Event of Default under the Indenture.
If any proposed amendment to the Declaration
provides for, or the Regular Trustees otherwise propose to
effect, (i) any action that would adversely affect the
powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise,
or (ii) the dissolution, winding-up or termination of the
Trust, other than in connection with the distribution of
Debentures held by the Institutional Trustee, upon the
occurrence of a Special Event or in connection with the
redemption of Preferred Securities as a consequence of a
redemption of Debentures, then the Holders of outstanding
Securities will be entitled to vote on such amendment or
proposal as a class and such amendment or proposal shall not
be effective except with the approval of the Holders of
Securities representing Majority in liquidation amount of
such Securities, provided, however, (A) if any amendment or
proposal referred to in clause (i) above would adversely
affect only the Preferred Securities or the Common
Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of
Majority in liquidation amount of such class of Securities,
(B) the rights of Holders of Preferred Securities under
Article V of the Declaration to appoint and remove a Special
Regular Trustee shall not be amended without the consent of
each Holder of Preferred Securities, and (C) amendments to
the Declaration shall be subject to such further
requirements as are set forth in Sections 12.1 and 12.2 of
the Declaration.
In the event the consent of the Institutional
Trustee, as the holder of the Debentures, is required under
11
the Indenture with respect to any amendment, modification or
termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of
the Holders of the Securities with respect to such
amendment, modification or termination. The Institutional
Trustee shall vote with respect to such amendment,
modification or termination as directed by a Majority in
liquidation amount of the Securities voting together as a
single class (and in the case of any other RJR Nabisco
Holdings Capital Trust holding Debentures issued under the
Indenture, voting with the holders of preferred securities
of such other RJR Nabisco Holdings Capital Trust); provided
that where such amendment, modification or termination of
the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than
a majority in principal amount of the Debentures or (2) each
holder of Debentures, the Institutional Trustee may only
vote with respect to that amendment, modification or
termination as directed by, in the case of clause (1) above,
the vote of Holders of Securities representing such
specified percentage of the aggregate liquidation amount of
the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the
Institutional Trustee shall be under no obligation to take
any action in accordance with the directions of the Holders
of Securities unless the Institutional Trustee shall have
received, at the expense of the Sponsor, an opinion of
nationally recognized independent tax counsel recognized as
expert in such matters to the effect that the Trust will not
be classified for United States federal income tax purposes
as an association taxable as a corporation or a partnership
on account of such action and will be treated as a grantor
trust for United States federal income tax purposes
following such action.
Subject to Section 2.6 of the Declaration, and the
provisions of this and the next succeeding paragraph, the
Holders of a Majority in liquidation amount of the Preferred
Securities, voting separately as a class shall have the
right to (A) on behalf of all Holders of Preferred
Securities, waive any past default that is waivable under
the Declaration (subject to, and in accordance with the
Declaration) and (B) direct the time, method, and place of
conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under the
Declaration, including the right to direct the Institutional
Trustee, as the holder of the Debentures (and in the case of
any other RJR Nabisco Holdings Capital Trust holding
Debentures issued under the Indenture, voting with the
holders of preferred securities of such other RJR Nabisco
12
Holdings Capital Trust), to (i) direct the time, method and
place of conducting any proceeding for any remedy available
to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable
under Section 5.1 of the Indenture, or (iii) exercise any
right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable; provided
that where the taking of any action under the Indenture
requires the consent or vote of (1) holders of Debentures
representing a specified percentage greater than a majority
in principal amount of the Debentures or (2) each holder of
Debentures, the Institutional Trustee may only take such
action if directed by, in the case of clause (1) above, the
vote of Holders of Preferred Securities representing such
specified percentage of the aggregate liquidation amount of
the Preferred Securities, or, in the case of clause (2)
above, each Holder of Preferred Securities. The
Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing
the time, method and place of conducting any proceeding for
any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional
Trustee shall be under no obligation to take any of the
foregoing actions at the direction of the Holders of
Preferred Securities unless the Institutional Trustee shall
have received, at the expense of the Sponsor, an opinion of
nationally recognized independent tax counsel recognized as
expert in such matters to the effect that the Trust will not
be classified for United States federal income tax purposes
as an association taxable as a corporation or a partnership
on account of such action and will be treated as a grantor
trust for United States federal income tax purposes
following such action. If the Institutional Trustee fails
to enforce its rights under the Declaration (including,
without limitation, its rights, powers and privileges as a
holder of the Debentures under the Indenture), any Holder of
Preferred Securities may, after a period of 30 days has
elapsed from such Holder's written request to the
Institutional Trustee to enforce such rights, institute a
legal proceeding directly against Holdings to enforce the
Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
A waiver of an Indenture Event of Default by the
Institutional Trustee at the direction of the Holders of the
Preferred Securities will constitute a waiver of the
corresponding Event of Default under the Declaration in
respect of the Securities.
13
Any required approval or direction of Holders of
Preferred Securities may be given at a separate meeting of
Holders of Preferred Securities convened for such purpose,
at a meeting of all of the Holders of Securities of the
Trust or pursuant to written consent. The Regular Trustees
will cause a notice of any meeting at which Holders of
Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to
be taken, to be mailed to each Holder of record of Preferred
Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon
which written consent is sought and (iii) instructions for
the delivery of proxies or consents.
No vote or consent of the Holders of Preferred
Securities will be required for the Trust to redeem and
cancel Preferred Securities in accordance with the
Declaration.
Notwithstanding that Holders of Preferred
Securities are entitled to vote or consent under any of the
circumstances described above, any of the Preferred
Securities at such time that are owned by Holdings or by any
entity directly or indirectly controlling or controlled by
or under direct or indirect common control with Holdings
shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were
not outstanding.
Except as provided in this paragraph 5, Holders of
the Preferred Securities will have no rights to increase or
decrease the number of Trustees or to appoint, remove or
replace a Trustee, which voting rights are vested solely in
the Holders of the Common Securities.
6. Pro Rata Treatment. A reference in these
terms of the Preferred Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro
rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant
Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment,
an Event of Default has occurred and is continuing, in which
case any funds available to make such payment shall be paid
first to each Holder of the Preferred Securities pro rata
according to the aggregate liquidation amount of Preferred
Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Preferred Securities
14
outstanding, and only after satisfaction of all amounts owed
to the Holders of the Preferred Securities, to each Holder
of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant
Holder relative to the aggregate liquidation amount of all
Common Securities outstanding.
7. Ranking. The Preferred Securities rank pari
----
passu and payment thereon will be made Pro Rata with, the
-----
Common Securities except that where an Event of Default
occurs and is continuing, the rights of Holders of Preferred
Securities to payment in respect of Distributions and
payments upon liquidation, redemption or otherwise rank in
priority to the rights of Holders of the Common Securities.
8. Mergers, Consolidations or Amalgamations. The
Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its
properties and assets to, any corporation or other body.
9. Transfer, Exchange, Method of Payments.
Payment of Distributions and payments on redemption of the
Preferred Securities will be payable, the transfer of the
Preferred Securities will be registrable, and Preferred
Securities will be exchangeable for Preferred Securities of
other denominations of a like aggregate liquidation amount,
at the principal corporate trust office of the Institutional
Trustee in The City of New York; provided that payment of
Distributions may be made at the option of the Regular
Trustees on behalf of the Trust by check mailed to the
address of the persons entitled thereto and that the payment
on redemption of any Preferred Security will be made only
upon surrender of such Preferred Security to the
Institutional Trustee.
10. Acceptance of Indenture and Preferred
Guarantee. Each Holder of Preferred Securities, by the
acceptance thereof, agrees to the provisions of (i) the
Preferred Guarantee, including the subordination provisions
therein and (ii) the Indenture and the Debentures, including
the subordination provisions of the Indenture.
11. No Preemptive Rights. The Holders of
Preferred Securities shall have no preemptive rights to
subscribe to any additional Preferred Securities or Common
Securities.
12. Miscellaneous. These terms shall constitute
a part of the Declaration. The Trust will provide a copy of
the Declaration and the Indenture to a Holder without charge
15
on written request to the Trust at its principal place of
business.
16
Annex I
Number [ ] Preferred Securities
B-
CUSIP NO.
Certificate Evidencing Preferred Securities
of
RJR Nabisco Holdings Capital Trust I
____% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security)
RJR Nabisco Holdings Capital Trust I, a statutory
business trust created under the laws of the State of
Delaware (the "Trust"), hereby certifies that _________ (the
"Holder") is the registered owner of _____ (______)
preferred securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated
the ____% Trust Originated Preferred Securities (liquidation
amount $25 per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on
the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designations,
rights, privileges, restrictions, preferences and other
terms and provisions of the Preferred Securities are set
forth in, and this certificate and the Preferred Securities
represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and
Restated Declaration of Trust of the Trust dated as of June
__, 1995, as the same may be amended from time to time (the
"Declaration") including the designation of the terms of
Preferred Securities as set forth in Exhibit B thereto. The
Preferred Securities and the Common Securities issued by the
Trust pursuant to the Declaration represent undivided
beneficial interests in the assets of the Trust, including
the Debentures (as defined in the Declaration) issued by RJR
Nabisco Holdings Corp., a Delaware corporation ("Holdings"),
to the Trust pursuant to the Indenture referred to in the
Declaration. The Holder is entitled to the benefits of the
Guarantee Agreement of Holdings dated as of June __ , 1995
(the "Guarantee") to the extent provided therein. The Trust
will furnish a copy of the Declaration, the Guarantee and
the Indenture to the Holder without charge upon written
request to the Trust at its principal place of business or
registered office.
The Holder of this Certificate, by accepting this
Certificate, is deemed to have (i) agreed to the terms of
the Indenture and the Debentures, including that the
Debentures are subordinate and junior in right of payment to
all Senior Debt (as defined in the Indenture) as and to the
extent provided in the Indenture and (ii) agreed to the
terms of the Guarantee, including that the Guarantee is
subordinate and junior in right of payment to all other
liabilities of Holdings, including the Debentures, except
those made pari passu or subordinate by their terms, and
senior to all capital stock now or hereafter issued by
Holdings and to any guarantee now or hereafter entered into
by Holdings in respect of any of its capital stock.
Upon receipt of this certificate, the Holder is
bound by the Declaration and is entitled to the benefits
thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have
executed this certificate this __ day of ____, 1995.
RJR NABISCO HOLDINGS CAPITAL TRUST I
By:_________________________, as trustee
Name:
Title:
By:_________________________, as trustee
Name:
Title:
Dated:
Countersigned and Registered:
______________________________
Transfer Agent and Registrar
By:___________________________
Authorized Signature
2
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers
this Preferred Security to:
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert assignee's social security or tax identification
number)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________
____________________________________________________________
____________________________________________________________
agent to transfer this Preferred Security Certificate on the
books of the Trust. The agent may substitute another to act
for him or her.
Date: _________________________
Signature: ____________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE
IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER.
3
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and
Restated Declaration of Trust of RJR Nabisco Holdings
Capital Trust I dated as of June __, 1995 (as amended from
time to time, the "Declaration"), the designations, rights,
privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth below
(each capitalized term used but not defined herein having
the meaning set forth in the Declaration):
1. Designation and Number. Common Securities of
the Trust with an aggregate liquidation amount in the assets
of the Trust of ___________________________________________
(_________) and a liquidation amount in the assets of the
Trust of $25 per Common Security, are hereby designated as
"____% Trust Originated Common Securities". The Common
Security Certificates evidencing the Common Securities shall
be substantially in the form attached hereto as Annex I,
with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or
practice. The Common Securities are to be issued and sold
to RJR Nabisco Holdings Corp. ("Holdings") in consideration
of $_________ in cash. In connection with the Offer and the
purchase by Holdings of the Common Securities, Holdings will
deposit in the Trust, and the Trust will purchase,
respectively, as trust assets Debentures of Holdings having
an aggregate principal amount equal to $__________, and
bearing interest at an annual rate equal to the annual
Distribution rate on the Preferred Securities and Common
Securities and having payment and redemption provisions
which correspond to the payment and redemption provisions of
the Preferred Securities and Common Securities.
2. Distributions. (a) Periodic distributions
payable on each Common Security will be fixed at a rate per
annum of ____% (the "Coupon Rate") of the stated liquidation
amount of $25 per Common Security. Distributions in arrears
for more than one quarter will bear interest at the rate per
annum of ____% thereof (to the extent permitted by
applicable law), compounded quarterly to the extent
permitted by law. The term "Distributions" as used in these
terms means such periodic cash distributions and any such
interest payable unless otherwise stated. A Distribution
will be made by the Institutional Trustee only to the extent
that interest payments are made in respect of the Debentures
held by the Institutional Trustee. The amount of
Distributions payable for any period will be computed for
any full quarterly Distribution period on the basis of a
360-day year of twelve 30-day months, and for any period
shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed
on the basis of the actual number of days elapsed in such a
30-day month.
(b) Distributions on the Common Securities will
be cumulative, will accrue from ______, 1995 and will be
payable quarterly in arrears, on March 31, June 30, Septem-
ber 30 and December 31 of each year, commencing on September
30, 1995, except as otherwise described below, but only if
and to the extent that interest payments are made in respect
of the Debentures held by the Trust. In addition, holders
of Common Securities will be entitled to a cash distribution
at the rate of 9 1/4% per annum of the liquidation amount
thereof from June 1, 1995 through ______, 1995, payable on
September 30, 1995 ("Pre-Issuance Interest"). With the
exception of Pre-Issuance Interest, so long as Holdings
shall not be in default in the payment of interest on the
Debentures, Holdings has the right under the Indenture for
the Debentures to defer payments of interest by extending
the interest payment period from time to time on the
Debentures for a period not exceeding 20 consecutive
quarterly interest periods (each, an "Extension Period")
and, as a consequence, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by
applicable law) at the rate of ____% per annum, compounded
quarterly to the extent permitted by law during any such
Extension Period. Prior to the termination of any such
Extension Period, Holdings may further extend such Extension
Period; provided that such Extension Period together with
all such previous and further extensions thereof may not
exceed 20 consecutive quarterly interest periods and
provided further that no Extension Period may extend beyond
the maturity of the Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due,
2
Holdings may commence a new Extension Period, subject to the
above requirements. Payments of accrued Distributions will
be payable to Holders of Common Securities as they appear on
the books and records of the Trust on the record date for
the first payment occurring on or after the end of the
Extension Period.
(c) Distributions on the Common Securities will
be payable promptly by the Institutional Trustee (or other
Paying Agent) upon receipt of immediately available funds to
the Holders thereof as they appear on the books and records
of the Trust on the relevant record dates which will be the
Business Day immediately prior to the relevant Distribution
date which record and payment dates correspond to the record
and interest payment dates on the Debentures. Distributions
payable on any Common Securities that are not punctually
paid on any Distribution date as a result of Holdings having
failed to make the corresponding interest payment on the
Debentures will forthwith cease to be payable to the person
in whose name such Common Security is registered on the
relevant record date, and such defaulted Distribution will
instead be payable to the person in whose name such Common
Security is registered on the special record date
established by the Regular Trustees, which record date shall
correspond to the special record date or other specified
date determined in accordance with the Indenture; provided,
--------
however, that Distributions shall not be considered payable
-------
on any Distribution payment date falling within an Extension
Period unless Holdings has elected to make a full or partial
payment of interest accrued on the Debentures on such
Distribution payment date. Subject to any applicable laws
and regulations and the provisions of the Declaration, each
payment in respect of the Common Securities will be made as
described in paragraph 9 hereof. If any date on which
Distributions are payable on the Common Securities is not a
Business Day, then payment of the Distribution 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
and the record date for such payment should be the
immediately preceding Business Day.
(d) All Distributions paid with respect to the
Common Securities and the Preferred Securities will be paid
Pro Rata to the Holders thereof entitled thereto. If an
Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
3
(e) In the event that there is any money or other
property held by or for the Trust that is not accounted for
under the Declaration, such money or property shall be
distributed Pro Rata among the Holders of the Preferred
Securities and Common Securities.
3. Liquidation Distribution Upon Dissolution. In
the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the
Preferred Securities and Common Securities at the date of
the dissolution, winding-up or termination, as the case may
be, will be entitled to receive Pro Rata solely out of the
assets of the Trust available for distribution to Holders of
Preferred Securities and Common Securities, after
satisfaction of liabilities to creditors, an amount equal to
the aggregate of the stated liquidation amount of $25 per
Preferred Security and Common Security plus accrued and
unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination,
and after satisfaction of liabilities to creditors,
Debentures in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Preferred
Securities and Common Securities bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid
Distributions on, such Preferred Securities and Common
Securities, shall be distributed Pro Rata to the Holders of
the Preferred Securities and Common Securities in exchange
for such Securities.
If, upon any such dissolution, the Liquidation
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 Preferred Securities and Common
Securities shall be paid, subject to the next paragraph, on
a Pro Rata basis.
Holders of Common Securities will be entitled to
receive Liquidation Distributions upon any such dissolution
Pro Rata with Holders of Preferred Securities, except that
if an Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures.
The Preferred Securities and Common Securities may only be
redeemed if Debentures having an aggregate principal amount
equal to the aggregate liquidation amount of the Preferred
Securities and Common Securities are repaid, redeemed or
distributed as set forth below:
4
(a) Upon the repayment of the Debentures, in
whole or in part, whether at maturity, upon redemption at
any time or from time to time on or after August 19, 1998,
the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities
having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so repaid or
redeemed, upon not less than 30 nor more than 60 days'
notice, at a redemption price of $25 per Preferred and
Common Security plus an amount equal to accrued and unpaid
Distributions thereon to the date of redemption, payable in
cash (the "Redemption Price"). The date of any such
repayment or redemption of Preferred Securities and Common
Securities shall be established to coincide with the
repayment or redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred
Securities and Common Securities are to be so redeemed, the
Preferred Securities and the Common Securities will be
redeemed Pro Rata and the Common Securities to be redeemed
will be redeemed as described in paragraph 4(e)(ii) below.
If a partial redemption 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, Holdings pursuant to the Indenture will only
redeem Debentures in whole and, as a result, the Trust may
only redeem the Common Securities in whole.
(c) If, at any time, a Tax Event or an Investment
Company Event (each as hereinafter defined, and each a
"Special Event") shall occur and be continuing, the Regular
Trustees shall, unless the Debentures are redeemed in the
limited circumstances described below, dissolve the Trust
and, after satisfaction of creditors, cause Debentures held
by the Institutional Trustee having an aggregate principal
amount equal to the aggregate stated liquidation amount of
and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for
payment as the Preferred Securities and Common Securities,
to be distributed to the Holders of the Preferred Securities
and Common Securities on a Pro Rata basis in liquidation of
such Holders' interests in the Trust, within 90 days
following the occurrence of such Special Event (the "90 Day
Period"), provided, however, that in the case of the
-------- -------
occurrence of a Tax Event, as a condition of such
dissolution and distribution, the Regular Trustees shall
have received an opinion of a nationally recognized
independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on any then
applicable published revenue rulings of the Internal Revenue
Service, to the effect that the Holders of the Preferred
5
Securities will not recognize any gain or loss for United
States federal income tax purposes as a result of the
dissolution of the Trust and distribution of Debentures; and
provided, further, that, if and as long as at the time there
is available to the Trust the opportunity to eliminate,
within the 90 Day Period, the Special Event by taking some
ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure
that has no adverse effect on the Trust, Holdings, or the
Holders of the Preferred Securities ("Ministerial Action")
the Trust will pursue such measure in lieu of dissolution.
If in the case of the occurrence of a Tax Event,
(i) the Regular Trustees have received an opinion (a
"Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as
a result of a Tax Event, there is more than an insubstantial
risk that Holdings would be precluded from deducting the
interest on the Debentures for United States federal income
tax purposes even if the Debentures were distributed to the
Holders of Preferred Securities and Common Securities in
liquidation of such Holder's interest in the Trust as
described in this paragraph 4(c) or (ii) the Regular
Trustees shall have been informed by such tax counsel that a
No Recognition Opinion cannot be delivered to the Trust,
Holdings shall have the right at any time, upon not less
than 30 nor more than 60 days notice, to redeem the
Debentures in whole or in part for cash at the Redemption
Price within 90 days following the occurrence of such Tax
Event, and promptly following such redemption Preferred
Securities and Common Securities with an aggregate
liquidation amount equal to the aggregate principal amount
of the Debentures so redeemed will be redeemed by the Trust
at the Redemption Price on a Pro Rata basis: provided,
however, that, if at the time there is available to Holdings
or the Regular Trustees on behalf of the Trust the
opportunity to eliminate, within such 90 day period, the Tax
Event by taking some Ministerial Action, Holdings or the
Holders of the Preferred Securities, Holdings or the Regular
Trustees on behalf of the Trust will pursue such measure in
lieu of redemption, and provided further that Holdings shall
have no right to redeem the Debentures while the Regular
Trustees on behalf of the Trust are pursuing such
Ministerial Action. The Common Securities will be redeemed
Pro Rata with the Preferred Securities, except if an Event
of Default under the Indenture has occurred and is
continuing, the Preferred Securities will have a priority
over the Common Securities with respect to payment of the
Redemption Price.
6
"Tax Event" means that the Regular Trustees shall
have obtained an opinion of nationally recognized
independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that on or after
June 5, 1995 as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws
(or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an
interpretation or application of any such laws or
regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of
any legislation and the publication of any judicial decision
or regulatory determination), (c) any interpretation or
pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore
generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment
or change is enacted, promulgated, issued or announced or
which interpretation or pronouncement is issued or announced
or which action is taken, in each case on or after ______,
1995, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof,
subject to United States federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust
is, or will be within 90 days of the date thereof, subject
to more than a de minimis amount of taxes, duties or other
governmental charges or (iii) interest payable by Holdings
to the Trust on the Debentures is not, or within 90 days of
the date thereof will not be, deductible by Holdings for
United States federal income tax purposes.
"Investment Company Event" means that the Regular
Trustees shall have received an opinion of nationally
recognized independent counsel experienced in practice under
the Investment Company Act 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 Investment Company Act, which Change in
1940 Act Law becomes effective on or after ______, 1995.
On the date fixed for any distribution of
Debentures, upon dissolution of the Trust, (i) the Common
Securities will no longer be deemed to be outstanding and
(ii) any certificates representing Common Securities will be
deemed to represent beneficial interests in the Debentures
having an aggregate principal amount equal to the stated
7
liquidation amount of, and bearing accrued and unpaid
interest equal to accrued and unpaid Distributions on, such
Common Securities until such certificates are presented to
Holdings or its agent for transfer or reissuance.
(d) The Trust may not redeem fewer than all the
outstanding Common Securities unless all accrued and unpaid
Distributions have been paid on all Common Securities for
all quarterly Distribution periods terminating on or prior
to the date of redemption.
(e)(i) Notice of any redemption of, or notice of
distribution of Debentures in exchange for, the Preferred
Securities and Common Securities (a "Redemption/Distribution
Notice") will be given by the Regular Trustees on behalf of
the Trust by mail to each Holder of Preferred Securities and
Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for
redemption or exchange thereof. For purposes of the
calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this paragraph
(e)(i), a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed by first-
class mail, postage prepaid, to Holders of Preferred
Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the
Holders of Preferred Securities and Common Securities at the
address of each such Holder appearing in the books and
records of the Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to any
Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the
outstanding Common Securities are to be redeemed, the Common
Securities to be redeemed will be redeemed Pro Rata from
each Holder of Common Securities (subject to adjustment to
eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/
Distribution Notice in respect of a redemption of Common
Securities as provided in this paragraph 4 (which notice
will be irrevocable) then immediately prior to the close of
business on the redemption date, provided that Holdings has
paid to the Trust in immediately available funds a
sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, Distributions will
cease to accrue on the Common Securities called for
redemption, such Common Securities will no longer be deemed
to be outstanding and all rights of Holders of such Common
Securities so called for redemption will cease, except the
8
right of the Holders of such Common Securities to receive
the Redemption Price, but without interest on such
Redemption Price. Neither the Trustees nor the Trust shall
be required to register or cause to be registered the
transfer of any Common Securities which have been so called
for redemption. If any date fixed for redemption of Common
Securities is not a Business Day, then payment of the
Redemption Price 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 falls in the next calendar
year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as
if made on such date fixed for redemption. If payment of
the Redemption Price in respect of Common Securities is
improperly withheld or refused and not paid by the Trust,
Distributions on such Common Securities will continue to
accrue, from the original redemption date to the date of
payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be
sent by the Regular Trustees on behalf of the Trust to the
Holders of the Common Securities.
(v) Upon the date of dissolution of the Trust and
distribution of Debentures as a result of the occurrence of
a Special Event, Common Security Certificates shall be
deemed to represent beneficial interests in the Debentures
so distributed, and the Common Securities will no longer be
deemed outstanding and may be canceled by the Regular
Trustees. The Debentures so distributed shall have an
aggregate principal amount equal to the aggregate
liquidation amount of the Common Securities so distributed.
5. Voting Rights. (a) Except as provided under
paragraph 5(b) below and as otherwise required by law and
the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) Except as provided in the Declaration with
respect to a Special Regular Trustee, Holders of Common
Securities have the sole right under the Declaration to
increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease,
appointment, removal or replacement to be approved by
Holders of Common Securities representing a Majority in
liquidation amount of the Common Securities.
9
If any proposed amendment to the Declaration
provides for, or the Regular Trustees otherwise propose to
effect, (i) any action that would adversely affect the
powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise,
or (ii) the dissolution, winding-up or termination of the
Trust, other than in connection with the distribution of
Debentures held by the Institutional Trustee, upon the
occurrence of a Special Event or in connection with the
redemption of Common Securities as a consequence of a
redemption of Debentures, then the Holders of outstanding
Securities will be entitled to vote on such amendment or
proposal as a class and such amendment or proposal shall not
be effective except with the approval of the Holders of
Securities representing a Majority in liquidation amount of
such Securities; provided, however, (A) if any amendment or
proposal referred to in clause (i) above would adversely
affect only the Preferred Securities or the Common
Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of
a Majority in liquidation amount of such class of
Securities, (B) the rights of Holders of Common Securities
under Article V of the Declaration to increase or decrease
the number of, and to appoint, replace or remove, Trustees
(other than a Special Regular Trustee) shall not be amended
without the consent of each Holder of Common Securities, and
(C) amendments to the Declaration shall be subject to such
further requirements as are set forth in Sections 12.1 and
12.2 of the Declaration.
In the event the consent of the Institutional
Trustee is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or
the Debentures, the Institutional Trustee shall request the
written direction of the Holders of the Securities with
respect to such amendment, modification or termination. The
Institutional Trustee shall vote with respect to such
amendment, modification or termination as directed by a
Majority in liquidation amount of the Securities voting
together as a single class; provided that where such
amendment, modification or termination of the Indenture
requires the consent or vote of (1) holders of Debentures
representing a specified percentage greater than a majority
in principal amount of the Debentures or (2) each holder of
Debentures, the Institutional Trustee may only vote with
respect to that amendment, modification or termination as
directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage
of the aggregate liquidation amount of the Securities, or,
in the case of clause (2) above, each Holder of Securities;
10
and provided, further, that the Institutional Trustee shall
be under no obligation to take any action in accordance with
the directions of the Holders of the Securities unless the
Institutional Trustee shall have received, at the expense of
the Sponsor, an opinion of nationally recognized independent
tax counsel recognized as an expert in such matters to the
effect that the Trust will not be classified for United
States federal income tax purposes as an association taxable
as a corporation or a partnership on account of such action
and will be treated as a grantor trust for United States
federal income tax purposes following such action.
Subject to Section 2.6 of the Declaration, and the
provisions of this and the next succeeding paragraph, the
Holders of a Majority in liquidation amount of the Common
Securities, voting separately as a class shall have the
right to (A) on behalf of all Holders of Common Securities,
waive any past default that is waivable under the
Declaration (subject to, and in accordance with the
Declaration) and (B) direct the time, method, and place of
conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under the
Declaration, including the right to direct the Institutional
Trustee, as holder of the Debentures, to (i) direct the
time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with
respect to the Debentures, (ii) waive any past default and
its consequences that is waivable under Section 6.4 of the
Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall
be due and payable; provided that where the taking of any
action under the Indenture requires the consent or vote of
(1) holders of Debentures representing a specified
percentage greater than a majority in principal amount of
the Debentures or (e) each holder of Debentures, the
Institutional Trustee may only take such action if directed
by, in the case of clause (1) above, the vote of Holders of
Common Securities representing such specified percentage of
the aggregate liquidation amount of the Common Securities,
or, in the case of clause (2) above, each Holder of Common
Securities. Pursuant to this paragraph, the Institutional
Trustee shall not revoke, or take any action inconsistent
with, any action previously authorized or approved by a vote
of the Holders of the Preferred Securities, and shall not
take any action in accordance with the direction of the
Holders of the Common Securities under this paragraph if the
action is prejudicial to the Holders of Preferred
Securities. Other than with respect to directing the time,
method and place of conducting any proceeding for any remedy
11
available to the Institutional Trustee or the Debenture
Trustee as set forth above, the Institutional Trustee shall
be under no obligation to take any of the foregoing actions
at the direction of the Holders of Common Securities unless
the Properties Trustee shall have received, at the expense
of the Sponsor, an opinion of nationally recognized
independent tax counsel recognized as expert in such matters
to the effect that the Trust will not be classified for
United States federal income tax purposes as an association
taxable as a corporation or a partnership on account of such
action and will be treated as a grantor trust for United
States income tax purposes following such action.
Notwithstanding any other provision of these
terms, each Holder of Common Securities will be deemed to
have waived any Event of Default with respect to the Common
Securities and its consequences until all Events of Default
with respect to the Preferred Securities have been cured,
waived by the Holders of Preferred Securities as provided in
the Declaration or otherwise eliminated, and until all
Events of Default with respect to the Preferred Securities
have been so cured, waived by the Holders of Preferred
Securities or otherwise eliminated, the Institutional
Trustee will be deemed to be acting solely on behalf of the
Holders of Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the
Declaration or of the Securities. In the event that any
Event of Default with respect to the Preferred Securities is
waived by the Holders of Preferred Securities as provided in
the Declaration, the Holders of Common Securities agree that
such waiver shall also constitute the waiver of such Event
of Default with respect to the Common Securities for all
purposes under the Declaration without any further act, vote
or consent of the Holders of the Common Securities.
A waiver of an Indenture Event of Default by the
Institutional Trustee at the direction of the Holders of the
Preferred Securities will constitute a waiver of the
corresponding Event of Default under the Declaration in
respect of the Securities.
Any required approval of Holders of Common
Securities may be given at a separate meeting of Holders of
Common Securities convened for such purpose, at a meeting of
all of the Holders of Securities of the Trust or pursuant to
written consent. The Regular Trustees will cause a notice
of any meeting at which Holders of Common Securities are
entitled to vote, or of any matter upon which action by
written consent of such Holders is to be taken, to be mailed
to each Holder of record of Common Securities. Each such
12
notice will include a statement setting forth (i) the date
of such meeting or the date by which such action is to be
taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled
to vote or of such matter upon which written consent is
sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of Common
Securities will be required for the Trust to redeem and
cancel Common Securities in accordance with the Declaration.
6. Pro Rata Treatment. A reference in these
terms of the Common Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each
Holder of Securities according to the aggregate liquidation
amount of the Securities held by the relevant Holder in
relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an
Event of Default has occurred and is continuing, in which
case any funds available to make such payment shall be paid
first to each Holder of the Preferred Securities pro rata
according to the aggregate liquidation amount of Preferred
Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed
to the Holders of the Preferred Securities, to each Holder
of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant
Holder relative to the aggregate liquidation amount of all
Common Securities outstanding.
7. Ranking. The Common Securities rank pari
----
passu with the Preferred Securities except that where an
-----
Event of Default occurs and is continuing, the rights of
Holders of Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or
otherwise are subordinate to the rights of Holders the
Preferred Securities.
8. Mergers, Consolidations or Amalgamations. The
Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its
properties and assets to, any corporation or other body.
9. Transfers, Exchanges, Method of Payments.
Payment of Distributions and payments on redemption of the
Common Securities will be payable, the transfer of the
Common Securities will be registrable, and Common Securities
will be exchangeable for Common Securities of other
denominations of a like aggregate liquidation amount, at the
13
principal corporate trust office of the Institutional
Trustee in The City of New York; provided that payment of
Distributions may be made at the option of the Regular
Trustees on behalf of the Trust by check mailed to the
address of the persons entitled thereto and that the payment
on redemption of any Common Security will be made only upon
surrender of such Common Security to the Institutional
Trustee. Notwithstanding the foregoing, transfers of Common
Securities are subject to conditions set forth in Section
9.1(c) of the Declaration.
10. Acceptance of Indenture. Each Holder of
Common Securities, by the acceptance thereof, agrees to the
provisions of the Indenture and the Debentures, including
the subordination provisions thereof.
11. No Preemptive Rights. The Holders of Common
Securities shall have no preemptive rights to subscribe to
any additional Common Securities or Preferred Securities.
12. Miscellaneous. These terms shall constitute
a part of the Declaration. The Trust will provide a copy of
the Declaration and the Indenture to a Holder without charge
on written request to the Trust at its principal place of
business.
14
Annex I
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
C-1 ______
Certificate Evidencing Common Securities
of
RJR Nabisco Holdings Capital Trust I
____% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
RJR Nabisco Holdings Capital Trust I, a statutory
business trust formed under the laws of the State of
Delaware (the "Trust"), hereby certifies that RJR Nabisco
Holdings Corp. (the "Holder") is the registered owner of
_____________________________ (______) common securities of
the Trust representing undivided beneficial interests in the
assets of the Trust designated the ____% Trust Originated
Common Securities (liquidation amount $25 per Common
Security) (the "Common Securities"). The Common Securities
are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of
this certificate duly endorsed and in proper form for
transfer and satisfaction of the other conditions set forth
in the Declaration (as defined below) including, without
limitation Section 9.1(c) thereof. The designations,
rights, privileges, restrictions, preferences and other
terms and provisions of the Common Securities are set forth
in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and
Restated Declaration of Trust of the Trust dated as of
_____, 1995, as the same may be amended from time to time
(the "Declaration") including the designation of the terms
of Common Securities as set forth in Exhibit C thereto. The
Common Securities and the Preferred Securities issued by the
Trust pursuant to the Declaration represent undivided
beneficial interests in the assets of the Trust, including
the Debentures (as defined in the Declaration) issued by
Holdings Inc., a Maryland corporation, to the Trust pursuant
to the Indenture referred to in the Declaration. The Trust
will furnish a copy of the Declaration and the Indenture to
the Holder without charge upon written request to the Trust
at its principal place of business or registered office.
The Holder of this Certificate, by accepting this
Certificate, is deemed to have agreed to the terms of the
Indenture and the Debentures, including that the Debentures
are subordinate and junior in right of payment to all Senior
Debt (as defined in the Indenture) as and to the extent
provided in the Indenture.
Upon receipt of this certificate, the Holder is
bound by the Declaration and is entitled to the benefits
thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have
executed this certificate this __th day of ____, 1995.
RJR NABISCO HOLDINGS CAPITAL TRUST I
By________________________, as trustee
Name:
Title:
By_________________________, as trustee
Name:
Title: Trustee
Dated:
Countersigned and Registered:
_____________________________
Transfer Agent and Registrar
By:___________________________
Authorized Signature
2
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfer
this Common Security Certificate to:
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert assignee's social security or tax identification
number)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________
____________________________________________________________
_____________________________________________________ agent
to transfer this Common Security Certificate on the books of
the Trust. The agent may substitute another to act for him
or her.
Date: ________________________
Signature: _________________________________
(Sign exactly as your name appears on the other side of this
Common Security Certificate)
3