EXHIBIT 4.13
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FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
CITIGROUP CAPITAL XVI
Dated as of , 20
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TABLE OF CONTENTS
ARTICLE I INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions......................................................... 1
ARTICLE II TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.................................... 7
SECTION 2.2 Lists of Holders of Securities...................................... 7
SECTION 2.3 Reports by the Institutional Trustee................................ 7
SECTION 2.4 Periodic Reports to Institutional Trustee........................... 8
SECTION 2.5 Evidence of Compliance with Conditions Precedent.................... 8
SECTION 2.6 Defaults; Waiver.................................................... 8
SECTION 2.7 Default; Notice..................................................... 9
ARTICLE III ORGANIZATION
SECTION 3.1 Name................................................................ 10
SECTION 3.2 Office.............................................................. 10
SECTION 3.3 Purpose............................................................. 10
SECTION 3.4 Authority........................................................... 10
SECTION 3.5 Title to Property of the Trust...................................... 11
SECTION 3.6 Powers and Duties of the Regular Trustees........................... 11
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees................ 13
SECTION 3.8 Powers and Duties of the Institutional Trustee...................... 14
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.... 16
SECTION 3.10 Certain Rights of Institutional Trustee............................ 17
SECTION 3.11 Delaware Trustee................................................... 19
SECTION 3.12 Execution of Documents............................................. 19
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities............. 20
SECTION 3.14 Duration of Trust.................................................. 20
SECTION 3.15 Mergers............................................................ 20
ARTICLE IV SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities............................. 21
SECTION 4.2 Responsibilities of the Sponsor..................................... 22
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ARTICLE V TRUSTEES
SECTION 5.1 Number of Trustees.................................................. 22
SECTION 5.2 Delaware Trustee.................................................... 23
SECTION 5.3 Institutional Trustee; Eligibility.................................. 23
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally... 24
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees............. 24
SECTION 5.6 Appointment, Removal and Resignation of Trustees.................... 25
SECTION 5.7 Vacancies among Trustees............................................ 26
SECTION 5.8 Effect of Vacancies................................................. 26
SECTION 5.9 Meetings............................................................ 27
SECTION 5.10 Delegation of Power................................................ 27
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business........ 27
ARTICLE VI DISTRIBUTIONS
SECTION 6.1 Distributions....................................................... 28
ARTICLE VII ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities............................. 28
ARTICLE VIII TERMINATION OF TRUST
SECTION 8.1 Termination of Trust................................................ 29
ARTICLE IX TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.............................................. 30
SECTION 9.2 Transfer of Certificates............................................ 30
SECTION 9.3 Deemed Security Holders............................................. 31
SECTION 9.4 Book Entry Interests................................................ 31
SECTION 9.5 Notices to Clearing Agency.......................................... 31
SECTION 9.6 Appointment of Successor Clearing Agency............................ 32
SECTION 9.7 Definitive Capital Security Certificates............................ 32
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates................... 32
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1 Liability.......................................................... 33
SECTION 10.2 Exculpation........................................................ 33
SECTION 10.3 Fiduciary Duty..................................................... 34
SECTION 10.4 Indemnification.................................................... 35
SECTION 10.5 Outside Businesses................................................. 37
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ARTICLE XI ACCOUNTING
SECTION 11.1 Fiscal Year........................................................ 38
SECTION 11.2 Certain Accounting Matters......................................... 38
SECTION 11.3 Banking............................................................ 38
SECTION 11.4 Withholding........................................................ 38
ARTICLE XII AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments......................................................... 39
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent... 41
ARTICLE XIII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee............ 42
SECTION 13.2 Representations and Warranties of Delaware Trustee................. 43
ARTICLE XIV MISCELLANEOUS
SECTION 14.1 Notices............................................................ 43
SECTION 14.2 Governing Law...................................................... 44
SECTION 14.3 Intention of the Parties........................................... 44
SECTION 14.4 Headings........................................................... 45
SECTION 14.5 Successors and Assigns............................................. 45
SECTION 14.6 Partial Enforceability............................................. 45
SECTION 14.7 Counterparts....................................................... 45
ANNEX I TERMS OF SECURITIES......................................... I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE........................ A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE......................... A2-1
EXHIBIT B SPECIMEN OF DEBENTURE....................................... B-1
EXHIBIT C UNDERWRITING AGREEMENT...................................... C-1
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CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act
of 1939, as amended Section of Declaration
- ------------------- ----------------------
310(a)............................................. 5.3(a)
310(c)............................................. Inapplicable
311(c)............................................. Inapplicable
312(a)............................................. 2.2(a)
312(b)............................................. 2.2(b)
313................................................ 2.3
314(a)............................................. 2.4
314(b)............................................. Inapplicable
314(c)............................................. 2.5
314(d)............................................. Inapplicable
314(f)............................................. Inapplicable
315(a)............................................. 3.9(b)
315(c)............................................. 3.9(a)
315(d)............................................. 3.9(a)
316(a)............................................. Annex I
316(c)............................................. 3.6(e)
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* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CITIGROUP CAPITAL XVI
, 20
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of , 20 , by the Trustees (as defined herein), the Sponsor (as
defined herein) 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 Trustees and the Sponsor established Citigroup Capital
XVI (the "Trust"), a trust under the Statutory Trust Act (as defined herein)
pursuant to a Declaration of Trust dated as of June 19, 2006 (the "Original
Declaration") and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on June 19, 2006, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a statutory trust under the Statutory Trust Act and that
this Declaration constitute the governing instrument of such statutory trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(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 Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes 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.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York, New York are permitted or
required by any applicable law to close.
"Capital Securities Guarantee" means the guarantee agreement dated
as of , 20 , of the Sponsor in respect of the Capital Securities.
"Capital Security" has the meaning specified in Section 7.1.
"Capital 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 participant, in each case in accordance
with the rules of such Clearing Agency).
"Capital Security Certificate" means a certificate representing a
Capital Security substantially in the form of Exhibit A-1.
"Certificate" means a Common Security Certificate or a Capital
Security Certificate.
"Citigroup" means Citigroup Inc., a Delaware corporation.
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"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Capital 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 Capital 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.
"Closing Date" means , 20 .
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 4 New York Plaza - 15th
Floor, New York, New York 10004.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Citigroup Inc. (or the Sponsor) in its
capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means JPMorgan Chase Bank, N.A., as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Institutional Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"Default" in respect of the Securities means a Default (as defined
in the Indenture) has occurred and is continuing in respect of the Debentures.
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"Definitive Capital Security Certificates" has the meaning set forth
in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Distribution" has the meaning set forth in Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"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 Statutory Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of , 20 , between the
Debenture Issuer and the Debenture Trustee, pursuant to which the Debentures are
to be issued.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"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.
"Investment Company Event" has the meaning set forth in Annex I
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Capital Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of an aggregate liquidation amount representing more than 50% of the
aggregate 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) of all outstanding
Securities of the relevant class.
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"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning specified in Section 6.1.
"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.
"Quorum" means any one Regular Trustee or, if there is only one
Regular Trustee, such Regular Trustee.
"Regular Trustee" has the meaning specified in Section 5.1.
"Regulatory Capital Event" has the meaning set forth in Annex I
hereto.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee with direct responsibility for the administration of this Declaration
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.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Capital Securities.
5
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Citigroup Inc. or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.
"Successor Delaware Trustee" has the meaning set forth in Section
5.6.
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Institutional Trustee" has the meaning set forth in
Section 5.6.
"Successor Securities" has the meaning set forth in Section 3.15(b).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Capital Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of an aggregate liquidation amount representing 10% or more of the
aggregate 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) of all outstanding
Securities of the relevant 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 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 from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Capital Securities in the form of Exhibit C.
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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) The Institutional Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(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 Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date, provided,
that neither the Sponsor nor the Regular Trustees on behalf of the Trust shall
be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Institutional
Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Institutional Trustee. The Institutional Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity), provided, that the Institutional
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
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 Capital Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Institutional
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
7
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 such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
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 provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) of
the Trust Indenture Act may be given in the form of an Officers' Certificate.
SECTION 2.6 Defaults; Waiver.
(a) The Holders of a Majority in liquidation amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Default in respect of the Capital Securities and its
consequences, provided, that if the underlying Default under the Indenture:
(i) is not waivable under the Indenture, the Default under the
Declaration shall also not be waivable; or
(ii) is waivable only with the consent of holders of more than a
majority in principal amount of the Debentures (a "Super Majority")
affected thereby, only the Holders of at least the proportion in aggregate
liquidation amount of the Capital Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding may waive such Default in respect of the Capital Securities
under the Declaration.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Default with respect to the Capital
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 a Default with respect to the Capital Securities or impair
any right consequent thereon. Any waiver by the Holders of the Capital
Securities of a Default with respect to the Capital Securities shall also be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Default with respect to the Common Securities for all purposes of this
Declaration without any further act, vote, or consent of the Holders of the
Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any
8
past Default with respect to the Common Securities and its consequences,
provided, that if the underlying Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Default under the
Declaration as provided in this Section 2.6(b), the Default under the
Declaration shall also not be waivable; or
(ii) is waivable only with the consent of a Super Majority, except
where the Holders of the Common Securities are deemed to have waived such
Default under the Declaration as provided in this Section 2.6(b), only the
Holders of at least the proportion in aggregate liquidation amount of the
Common Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding may waive such
Default in respect of the Common Securities under the Declaration;
provided, further each Holder of Common Securities will be deemed to have waived
any such Default and all Defaults with respect to the Common Securities and its
consequences until all Defaults with respect to the Capital Securities have been
cured, waived or otherwise eliminated, and until such Defaults with respect to
the Capital 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 Capital Securities and only the Holders of the Capital Securities
will have the right to direct the Institutional Trustee in accordance with the
terms of the Securities. The foregoing provisions of this Section 2.6(b) shall
be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act
and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the Securities, as permitted
by the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon the waiver of a Default by the Holders of a Majority in liquidation
amount of the Common Securities, any such default shall cease to exist and any
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 Default with respect to the
Common Securities or impair any right consequent thereon.
(c) A waiver of a Default under the Indenture by the Institutional
Trustee at the direction of the Holders of the Capital Securities, constitutes a
waiver of the corresponding Default under this Declaration. The foregoing
provisions of this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture
Act is hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act.
SECTION 2.7 Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of a Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of (i) all defaults with respect to the
Securities actually known to a Responsible Officer of the Institutional Trustee,
unless such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be a
Default as defined in the Indenture, not including any periods of grace provided
for therein and irrespective
9
of the giving of any notice provided therein) and (ii) any notice of default
received from the Indenture Trustee with respect to the Debentures, which notice
from the Institutional Trustee to the Holders shall state that a Default under
the Indenture also constitutes a Default with respect to the Securities;
provided that, except for a default in the payment of principal of (or premium,
if any) or interest on any of the Debentures or in the payment of any sinking
fund installment established for the Debentures, the Institutional Trustee shall
be protected in withholding such notice if and so long as a Responsible Officer
of the Institutional Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.7(b) and 5.7(c) of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Citigroup Capital XVI," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Institutional Trustee, the Delaware Trustee and 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 Citigroup
Inc., 399 Park Avenue, New York, NY 10043. On ten Business Days written notice
to the Institutional Trustee, the Delaware Trustee and the Holders of
Securities, the Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities and use the proceeds from such sale to acquire the
Debentures, 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 otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.
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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 on behalf of the Trust 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.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an 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, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Capital Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
interests in the Trust other than the Securities, and the issuance of Securities
shall be limited to a simultaneous issuance of both Capital Securities and
Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Capital Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission on behalf of the Trust a
registration statement on Form S-3 or on another appropriate form, or a
registration statement under Rule 462(b) of the Securities Act, in each
case prepared by the Sponsor, including any pre-effective or
post-effective amendments thereto, relating to the registration under the
Securities Act of the Capital Securities;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Capital Securities in any State in which
the Sponsor has determined to qualify or register such Capital Securities
for sale;
(iii) execute and file an application, prepared by the Sponsor, to
the New York Stock Exchange, Inc., any other national stock exchange or
the Nasdaq National Market for listing upon notice of issuance of any
Capital Securities;
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(iv) execute and file with the Commission on behalf of the Trust a
registration statement on Form 8-A, prepared by the Sponsor, including any
pre-effective or post-effective amendments thereto, relating to the
registration of the Capital Securities under Section 12(b) of the Exchange
Act; and
(v) deliver the Underwriting Agreement providing for the sale of the
Capital Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Capital Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of record
in the name of the Institutional Trustee for the benefit of the Holders of the
Capital Securities and the Holders of Common Securities;
(d) 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 from taking any ministerial action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Capital Securities and Holders of Common Securities as
to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(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(e), the Institutional Trustee
has the exclusive power to bring such Legal Action;
(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 required by Section 314(a)(4) of the
Trust Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that 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;
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(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment period
under the Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory statutory 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 Capital
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their discretion to
be necessary or desirable in carrying out the activities of the Trust as set out
in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes;
provided, that any such action does not adversely affect the interests of
Holders;
(p) 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
(q) 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.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that 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 that 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 or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
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SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) shall not cause the Trust to, engage in any activity
other than as required or authorized by this Declaration. In particular, the
Trust shall not:
(i) 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;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness;
(v) 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;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past Default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all
the Debentures shall be due and payable or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have obtained an opinion
of nationally recognized independent tax counsel experienced in such
matters to the effect that as a result of such action, the Trust will not
fail 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 legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the
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Institutional Trustee on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Debentures held by
the Institutional Trustee, deposit such funds into the Institutional
Trustee Account and make payments to the Holders of the Capital Securities
and Holders of the Common Securities from the Institutional Trustee
Account in accordance with Section 6.1. Funds in the Institutional Trustee
Account shall be held uninvested until disbursed in accordance with this
Declaration. The Institutional Trustee Account shall be an account that is
maintained with a banking institution the rating on whose long-term
unsecured indebtedness assigned by a "nationally recognized statistical
rating organization," as that term is defined for purposes of Rule
436(g)(2) under the Securities Act, is at least equal to the rating
assigned to the Capital Securities by a nationally recognized statistical
rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Capital Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of certain Special Events or other specified circumstances
pursuant to the terms of the Securities.
(d) 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.
(e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with a Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or the
Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if a Default actually known to a Responsible Officer of the
Institutional Trustee occurs and is continuing, the Institutional Trustee shall,
for the benefit of Holders of the Securities, enforce its rights as holder of
the Debentures subject to the rights of the Holders pursuant to the terms of
such Securities, this Declaration, the Statutory Trust Act and the Trust
Indenture Act.
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(h) The Institutional Trustee 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 all securities and
any such Paying Agent shall comply with Section 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Institutional Trustee at any time
and a successor Paying Agent or additional Paying Agents may be appointed at any
time by the Institutional Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth
in this Section 3.8 in a manner that 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 that is inconsistent with the purposes and functions
of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any Default
and after the curing of all Defaults 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 a Default has occurred (that has not been cured
or waived pursuant to Section 2.6) of which a Responsible Officer of the
Institutional Trustee has actual knowledge, 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 the exercise of such rights and powers, 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 a Default and after the curing or
waiving of all such Defaults that may have occurred:
(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
16
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 of not less than a Majority in
liquidation amount of the Securities relating to 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 this Declaration;
(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
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
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(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before 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, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise 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 accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of
its employees. The Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) 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 Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided that nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of a Default, of its obligation to exercise the rights and
powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
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(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and 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;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
and
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, 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 or the Institutional Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Statutory Trust Act.
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SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Statutory Trust Act, any Regular Trustee is authorized
to execute on behalf of the Trust any documents that the Regular Trustees have
the power and authority to execute pursuant to Section 3.6; provided, that the
registration statement referred to in Section 3.6(b)(i), including any
amendments thereto, shall be signed by all of the Regular Trustees.
SECTION 3.13 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 3.14 Duration of Trust.
The Trust, unless dissolved and terminated pursuant to the
provisions of Article VIII hereof, shall have existence for sixty-five (65)
years from the Closing Date.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided,
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Capital Securities rank with respect to Distributions
and payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee in its capacity as the Holder of the Debentures;
(iii) the Capital Securities or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of issuance,
on any national
20
securities exchange or with any other organization on which the Capital
Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Capital Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Capital Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if in the opinion of a nationally recognized independent tax counsel
experienced in such matters, such consolidation, amalgamation, merger or
replacement would cause the Trust or the Successor Entity to be classified as
other than a grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
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On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Capital Securities are
sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 or on another appropriate form, or a
registration statement under Rule 462(b) of the Securities Act, including any
pre-effective or post-effective amendments thereto, relating to the registration
under the Securities Act of the Capital Securities;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Capital Securities and to do any
and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange, any other national stock exchange or the Nasdaq National
Market for listing upon notice of issuance of any Capital Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any pre-effective or
post-effective amendments thereto, relating to the registration of the Capital
Securities under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Capital Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities,
provided, however, that the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who is a resident of
22
the State of Delaware or that, if not a natural person, shall be an entity which
has its principal place of business in the State of Delaware (the "Delaware
Trustee"); (2) there shall be at least one Trustee who is an employee or officer
of, or is affiliated with the Sponsor (a "Regular Trustee"); and (3) one Trustee
shall be the Institutional Trustee for so long as this Declaration is required
to qualify as an indenture under the Trust Indenture Act, and such Trustee may
also serve as Delaware Trustee if it meets the applicable requirements.
SECTION 5.2 Delaware Trustee.
If required by the Statutory Trust Act, the Delaware Trustee shall
be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law,
provided, that if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(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 million U.S. dollars
($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 5.3(a)(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; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having certain qualifications to hold title to the "eligible
assets" of the Trust, the Institutional Trustee shall possess those
qualifications.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
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(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 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 Section 310(b)
of the Trust Indenture Act) shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as set forth in
Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.
(a) The initial Regular Trustees shall be:
Saul Rosen
Sallie Krawcheck
John Gerspach
The initial Delaware Trustee shall be:
Chase Bank USA, National Association
c/o JPMorgan Chase Bank, N.A.
Attn: Institutional Trust Services
500 Stanton Christiana Rd., OPS4 /3rd Floor
Newark, Delaware 19713
The initial Institutional Trustee shall be:
JPMorgan Chase Bank, N.A.
4 New York Plaza - 15th Floor
New York, New York 10004
(b) Except as expressly set forth in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Statutory Trust Act or applicable law, any Regular
Trustee is
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authorized to execute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to cause the Trust to execute pursuant to
Section 3.6, provided, that the registration statement referred to in Section
3.6, including any amendments thereto, shall be signed by all of the Regular
Trustees; and
(d) a 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 purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) in the case of the Regular Trustees, after the issuance of any
Securities, by vote of the Holders of a Majority in liquidation amount of
the Common Securities voting as a class at a meeting of the Holders of the
Common Securities;
(iii) in the case of the Institutional Trustee and the Delaware
Trustee, unless a Default shall have occurred and be continuing after the
issuance of any Securities, by a vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; and
(iv) in the case of the Institutional Trustee and the Delaware
Trustee, if a Default shall have occurred and be continuing after the
issuance of the Securities, by a vote of the Holders of a Majority in
liquidation amount of the Capital Securities voting as a class at a
meeting of the Holders of the Capital Securities.
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Institutional Trustee under Section 5.3 (a
"Successor Institutional Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Institutional
Trustee and delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (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 and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by
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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:
(A) until a Successor Institutional Trustee 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; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(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.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee as the case may be if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Institutional Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 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 the Regular Trustees or, if there
are more than two, 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 Section 5.6.
SECTION 5.8 Effect of Vacancies.
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The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, 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 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular 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 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. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.10 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 documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(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.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any
27
corporation resulting from any merger, conversion or consolidation to which the
Institutional Trustee or the Delaware Trustee, as the case may be, shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Institutional Trustee or the Delaware Trustee, as the case
may be, shall be the successor of the Institutional Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Debenture Issuer makes a payment of interest (including
Compounded Interest (as defined in the Indenture) and Additional Interest (as
defined in the Indenture)), premium and/or 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 make a distribution
(a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one
class of capital securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the "Capital
Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities"). The Trust shall issue no securities
or other interests in the assets of the Trust other than the Capital Securities
and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
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
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or
28
with any rule or regulation of any stock exchange on which Securities may be
listed, or to conform to usage.
(c) 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.
(d) 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.
(e) Every Person, by virtue of having become a Holder or a Capital
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.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of any Holder of the Common Securities or
the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to any Holder of the Common Securities or the
Sponsor; the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of any
Holder of the Common Securities, the Sponsor or the Trust;
(iv) Subject to obtaining any required regulatory approval, when all
of the Securities have been called for redemption and the amounts
necessary for redemption thereof have been paid to the Holders in
accordance with the terms of the Securities;
(v) Subject to obtaining any required regulatory approval, when the
Trust shall have been dissolved in accordance with the terms of the
Securities upon election by the Sponsor of its right to terminate the
Trust and distribute all of the Debentures to the Holders of Securities in
exchange for all of the Securities and all of the Debentures shall have
been distributed to the Holders of Securities in accordance with such
election;
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor; or
(vii) upon the expiration of the term of the Trust set forth in
Section 3.14.
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(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), and after satisfaction of liabilities to
creditors of the Trust as required by applicable law, including Section 3808 of
the Statutory Trust Act, and subject to the terms set forth in Annex I, the
Delaware Trustee, when notified in writing of the completion of the winding up
of the Trust in accordance with the Statutory Trust Act, shall terminate the
Trust by filing, at the expense of the Sponsor, a certificate of cancellation
with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 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 and in
the terms of the Securities. 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, Capital Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided, that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become 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 that 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
30
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
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Capital Securities,
the Capital Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Capital Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall initially
be registered on the books and records of the Trust in the name of Cede & Co.,
the nominee of DTC, and no Capital Security Beneficial Owner will receive a
definitive Capital Security Certificate representing such Capital Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Capital Security
Certificates (the "Definitive Capital Security Certificates") have been issued
to the Capital Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) 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 the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Capital Securities and the sole holder
of the Global Certificates and shall have no obligation to the Capital Security
Beneficial Owners;
(c) 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
(d) the rights of the Capital Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants. DTC will make book entry transfers among the
Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital Security
Holders is required under this Declaration, unless and until Definitive Capital
Security Certificates shall have been issued to the Capital Security Beneficial
Owners pursuant to Section 9.7, the Regular
31
Trustees shall give all such notices and communications specified herein to be
given to the Capital Security Holders to the Clearing Agency, and shall have no
notice obligations to the Capital Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as a
securities depositary with respect to the Capital Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
SECTION 9.7 Definitive Capital Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as a
securities depositary with respect to the Capital Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with respect to
the Capital Securities,
then:
(c) Definitive Capital Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Capital
Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees shall
cause Definitive Certificates to be delivered to Capital 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, said instructions of the Clearing Agency. The Definitive Capital
Security 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 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 Capital Securities
may be listed, or to conform to usage.
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
32
(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 Regular Trustee 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 lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Capital
Securities Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Statutory Trust Act, the
Holders of the Capital Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2 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
willful misconduct with respect to such acts or omissions.
33
(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.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
34
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company Indemnified Person
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Trust and except that no such indemnification shall be made in respect of
any claim, issue or matter as to which such Company Indemnified Person
shall have been adjudged to be liable to the Trust unless and only to the
extent that the Court of Chancery of Delaware or the court in which such
action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified
35
Person is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote
of a quorum consisting of such Regular Trustees who were not parties to
such action, suit or proceeding, (2) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) the
Common Security Holder of the Trust, that, based upon the facts known to
the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad
faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any
criminal proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall
any advance be made in instances where the Regular Trustees, independent
legal counsel or Common Security Holder reasonably determine that such
person deliberately breached his duty to the Trust or its Common or
Capital Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the
Debenture Issuer or Capital Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debenture Issuer and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any
repeal or modification of this Section 10.4(a) shall not affect any rights
or obligations then existing.
(vii) The Debenture Issuer may purchase and maintain insurance on
behalf of any person who is or was a Company Indemnified Person against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
36
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent)
absorbed in a consolidation or merger, so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or is
or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the
same position under the provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration or
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligation to indemnify as set forth in this
Section 10.4(b) shall survive the resignation or removal of the Institutional
Trustee or the Delaware Trustee, as the case may be, and the satisfaction and
discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the
Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
37
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 of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants selected
by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, to the extent, if any, required by the Trust
Indenture Act, within 90 days after the end of each Fiscal Year of the Trust,
annual financial statements of the Trust, including a balance sheet of the Trust
as of the end of such Fiscal Year, and the related statements of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement 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 duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, 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.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
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The Trust and the Regular 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, its
withholding obligations. The Regular Trustees 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 required to be withheld was not withheld
from actual Distributions made, 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 only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
39
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the
Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that 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;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the Holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) subject to Section 12.1(c), 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) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the right, preferences or privileges of the
Holders; and
40
(v) to modify, eliminate and add to any provision of the Declaration
to such extent as may be reasonably necessary to effectuate any of the
foregoing or to otherwise comply with applicable law.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of 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 Capital
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of
Securities representing 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 Security Certificates held by the Holders of Securities
exercising the right to call a meeting and only those Securities specified shall
be counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before 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 Capital
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 the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount 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
Security Holder 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 Securities 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 Securities
executing it. Except as otherwise provided herein, 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
41
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; and
(iv) unless the Statutory Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Capital Securities are then listed or trading,
otherwise provides, 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.
The Trustee that 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:
(a) 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 New York, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, this
Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the 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 it 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 court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by
the Institutional Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration.
42
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to 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:
(a) The Delaware Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing under the
laws of the United States of America, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms of,
the Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The Declaration
under Delaware law constitutes a legal, valid and binding obligation of the
Delaware 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 court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(d) The Delaware Trustee is an entity which maintains its principal
place of business in the State of Delaware.
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 registered or certified 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 Trust may
give notice of to the Holders of the Securities):
Citigroup Capital XVI
c/o Citigroup Inc.
153 East 53rd Street
New York, NY 10043
Attention: Sallie Krawcheck
43
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
Chase Bank USA, National Association
c/o JPMorgan Chase Bank, N.A.
Attention: Institutional Trust Services
500 Stanton Christiana Rd., OPS4 /3rd Floor
Newark, Delaware 19713
(c) if given to the Institutional Trustee, at the mailing address
set forth below (or such other address as the Institutional Trustee may give
notice of to the Holders of the Securities):
JPMorgan Chase Bank, N.A.
4 New York Plaza - 15th Floor
New York, New York 10004
Attention: Institutional Trust Services
(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 of to the Trust):
Citigroup Inc.
153 East 53rd Street
New York, NY 10043
Attention: Charles E. Wainhouse
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such 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 have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 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 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
44
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 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.
SECTION 14.6 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
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of 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.
45
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
_____________________________________________
Name: Sallie Krawcheck
Title: Regular Trustee
CHASE BANK USA,
NATIONAL ASSOCIATION,
as Delaware Trustee
By:
------------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, N.A., as Institutional Trustee
By:
------------------------------------------
Name:
Title:
CITIGROUP INC., as Sponsor
By:
------------------------------------------
Name: Charles E. Wainhouse
Title: Assistant Treasurer
ANNEX I
TERMS OF
% CAPITAL SECURITIES
% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of , 20 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Capital Securities. Capital Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of
dollars ($ ), and a liquidation amount with respect to the assets of the Trust
of $25 per capital security, are hereby designated for the purposes of
identification only as " % Capital Securities" (the "Capital
Securities"). The Capital Security Certificates evidencing the Capital
Securities shall be substantially in the form of Exhibit A-1 to the Declaration,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the rules of any
stock exchange on which the Capital Securities are listed.
(b) Common Securities. Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of
dollars ($ ), and a liquidation amount with respect to the assets of the
Trust of $25 per common security, are hereby designated for the purposes of
identification only as " % Common Securities" (the "Common Securities"). The
Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of % (the "Coupon Rate") of the stated liquidation amount of $25 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears beyond the first
date such Distributions are payable (or would be payable, if not for any
Extension Period (as defined below) or default by the Debenture Issuer on the
Debentures) will bear interest thereon compounded quarterly at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has funds available therefor. 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
I-1
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from and including , 20 , and will be payable quarterly in arrears, on ,
, , and of each year, commencing on , 20 . When, as and if available
for payment, Distributions will be made by the Institutional Trustee, except as
otherwise described below. The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 40 consecutive quarters (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debentures,
provided, that no Extension Period may extend beyond the date of maturity of the
Debentures. As a consequence of the Debenture Issuer's extension of the interest
payment period, quarterly Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Extension Period. In the event that the Debenture
Issuer exercises its right to extend the interest payment period, then (a) the
Debenture Issuer shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto (other than (i) repurchases, redemptions
or other acquisitions of shares of capital stock of the Company in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers, directors or consultants, (ii)
repurchases of shares of common stock of Citigroup pursuant to a contractually
binding requirement to buy stock existing prior to the commencement of the
extension period, including under a contractually binding stock repurchase plan
(iii) as a result of an exchange or conversion of any class or series of the
Company's capital stock for any other class or series of the Company's capital
stock, (iv) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged), or (v) the purchase of
Citigroup's capital stock in connection with the distribution thereof; and (b)
except for any partial payments of deferred interest in accordance with the
Alternative Payment Mechanism (as defined below), the Debenture Issuer shall not
make any payment of interest on or principal of (or premium, if any, on), or
repay, repurchase or redeem, any debt securities or guarantees issued by the
Debenture Issuer that rank pari passu with or junior to the Debentures. The
foregoing, however, will not apply to any stock dividends paid by Citigroup
where the dividend stock is the same stock as that on which the dividend is
being paid. In addition, the Debenture Issuer may pay current interest at any
time with cash from any source. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period; provided,
that such Extension Period, together with all such previous and further
extensions thereof, may not exceed 40 consecutive quarters; provided further,
that no Extension Period may extend beyond the maturity of the Debentures.
Payments of deferred Distributions and accrued interest thereon will be payable
to Holders as they appear on the books and records of the Trust on the first
record date before the end of the Extension Period. Upon the termination of any
Extension Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period, subject to the above requirements. The
Regular Trustees will give notice to each Holder of any Extension Period upon
their receipt of notice thereof from the Debenture Issuer.
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(c) If the Debenture Issuer does not pay all accrued and unpaid
interest on the Debentures for a period of 20 consecutive quarterly periods or
if the Debenture Issuer pays current interest on the Debentures during an
Extension Period, it will be subject to the "Alternative Payment Mechanism,"
whereby the Debenture Issuer will be obliged to continuously use its
commercially reasonable efforts to sell shares of its common stock (including
treasury shares) in an amount that will generate sufficient net proceeds to
enable the Debenture Issuer to pay in full accrued and unpaid interest on the
Debentures then outstanding (subject to the Share Cap Amount and the APM Maximum
Obligation, as each of these terms is defined below). The Debenture Issuer will
notify the Board of Governors of the Federal Reserve Bank and the Federal
Reserve Bank of New York, or its successor as the Debenture Issuer's primary
federal banking regulator (collectively, the "Federal Reserve") (1) of the
commencement of any Extension Period, (2) of the fifth anniversary of the
commencement of an Extension period or earlier payment of current interest on
the Debentures during an Extension Period and (3) of its intention to sell
shares of its common stock and/or Qualified Warrants (as defined below) and to
apply the net proceeds from such sale to pay deferred interest on the Debentures
at least 25 Business Days in advance of the relevant payment date (or such
longer period as may be required by the Federal Reserve or by other supervisory
action). The Debenture Issuer may pay accrued and unpaid interest on the
Debentures on or prior to the next interest payment date using only the net
proceeds (after underwriters' or placement agents' fees, commissions or
discounts and other expenses relating to the issuances) of such sales received
by the Debenture Issuer during the 180-day period prior to that interest payment
date, except that the Debenture Issuer may pay accrued and unpaid interest on
the Debentures with cash from any source (i) upon the maturity of the
Debentures, (ii) during the occurrence and continuation of a Supervisory Event
(as defined in the Indenture) or (iii) if an Event of Default and Acceleration
under the Indenture shall have occurred and be continuing. Corresponding
Distributions will be made on the Securities. If (1) a Supervisory Event or (2)
a Market Disruption Event (as defined in the Indenture) shall have occurred and
be continuing; then the Debenture Issuer will be excused from its obligation to
use its commercially reasonable efforts to sell its common stock and apply the
net proceeds of such sale to pay accrued and unpaid interest on the Debentures.
During the occurrence of a Supervisory Event, the Debenture Issuer will, no
later than 30 Business Days prior to each interest payment date, notify the
Federal Reserve of its intention to both (1) issue or sell shares of common
stock and (2) to apply the net proceeds from such sale to pay deferred interest
on the Debentures, and shall only take any such actions if the Federal Reserve
does not disapprove of any such actions within ten (10) Business Days after the
Debenture Issuer gives such notice to the Federal Reserve. The obligation of the
Debenture Issuer to use commercially reasonable efforts to sell its common stock
and apply the net proceeds of such sale to pay accrued and unpaid interest on
the Debentures shall resume at such time as no Market Disruption Event or
Supervisory Event exists or is continuing. The Debenture Issuer is not permitted
to sell shares of common stock in excess of a number of shares of common stock
which at , 20 is equal to (the "Share Cap Amount"), for the purpose
of satisfying the Alternative Payment Mechanism or otherwise paying deferred
interest on the Debentures then outstanding. If the issued and outstanding
shares of common stock shall have been changed into a different number of shares
or a different class by reason of any stock split, reverse stock split, stock
dividend, reclassification, recapitalization, split-up, combination, exchange of
shares or other similar transaction, then the Share Cap Amount shall be
correspondingly adjusted. The Debenture Issuer shall increase the Share Cap
Amount (including through the increase of its authorized share
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capital, if necessary) to an amount that would allow the Debenture Issuer to
raise sufficient proceeds to satisfy its obligations to pay deferred interest in
full at the end of the first year of an Extension Period (and on each subsequent
anniversary of the end of the first year of an Extension Period to the extent
that an Extension Period would last more than one year), if the then-current
Share Cap Amount would not allow the Debenture Issuer to raise sufficient
proceeds to satisfy its obligations to pay deferred interest (including
compounded interest to that date) assuming a price per share equal to the
average trading price of the Debenture Issuer's common shares over the
ten-trading-day period preceding such date; provided that the Debenture Issuer
will not be obligated to increase the Share Cap Amount above million shares.
Until the tenth anniversary of the commencement of an Extension Period, a
Default will occur if the Debenture Issuer does not increase the Share Cap
Amount to an amount that is greater than million shares when required to do
so as described above; provided that no Default will occur if the Debenture
Issuer has increased the share cap amount to million shares. The Debenture
Issuer will not be obligated to issue common stock prior to the fifth
anniversary of the commencement of an Extension Period if the gross proceeds of
any issuance of common stock and Qualified Warrants applied to pay deferred
interest on the Debentures pursuant to the Alternative Payment Mechanism,
together with the gross proceeds of all prior issuances of common stock and
Qualified Warrants applied since the commencement of the Extension Period, would
exceed an amount equal to 2% of the product of (1) the average of the Current
Stock Market Prices (as defined in the Indenture) of the Debenture Issuer's
common stock on the 10 consecutive trading days ending on the fourth trading day
immediately preceding the date of issuance by the Debenture Issuer of common
stock applied to pay deferred interest on the Debentures pursuant to the
Alternative Payment Mechanism and (2) the total number of issued and outstanding
shares of the Debenture Issuer's common stock as of the date of the Debenture
Issuer's publicly available consolidated financial statements (the "APM Maximum
Obligation"). Once the Debenture Issuer reaches the APM Maximum Obligation for
an Extension Period, the Debenture Issuer will not be obligated to issue more
common stock or Qualified Warrants in satisfaction of the Alternative Payment
Mechanism prior to the fifth anniversary of the commencement of an Extension
Period even if the Current Stock Market Price of the Debenture Issuer's common
stock or the number of outstanding shares of its common stock subsequently
increase. The APM Maximum Obligation will cease to apply following the fifth
anniversary of the commencement of an Extension Period, at which point the
Debenture Issuer must repay any deferred interest, regardless of the time at
which it was deferred, using proceeds from sales of the Debenture Issuer's
common stock, including treasury shares, subject to any Market Disruption Event,
Supervisory Event, and the Share Cap Amount. If the APM Maximum Obligation has
been reached during an Extension Period and the Debenture Issuer subsequently
repays all deferred interest, the APM Maximum Obligation will cease to apply at
the termination of such Extension Period and will not apply again unless and
until the Debenture Issuer starts a new Extension Period. "Qualified Warrants"
means warrants for the Debenture Issuer's common stock that (1) have an exercise
price greater than the Current Stock Market Price of the Debenture Issuer's
common stock, and (2) the Debenture Issuer is not entitled to redeem for cash
and the holders are not entitled to require the Debenture Issuer to repurchase
for cash in any circumstances.
(d) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record dates. While the Capital Securities remain in
book-entry only form, the relevant record dates
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shall be one Business Day prior to the relevant payment dates which payment
dates shall correspond to the interest payment dates on the Debentures. Subject
to any applicable laws and regulations and the provisions of the Declaration,
each such payment in respect of the Capital Securities will be made as described
under the heading "Description of the Capital Securities -- Book-Entry Only
Issuance" in the Prospectus dated , 20 (the "Prospectus"), of the Trust
included in the Registration Statement on Form S-3 of the Sponsor, the Trust and
certain other statutory trusts. The relevant record dates for the Common
Securities shall be the same record date as for the Capital Securities. If the
Capital Securities shall not continue to remain in book-entry only form, the
relevant record dates for the Capital Securities shall conform to the rules of
any securities exchange on which the securities are listed and, if none, shall
be selected by the Regular Trustees, which dates shall be more than 14 days but
less than 60 days prior to the relevant payment dates, which payment dates shall
correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which Distributions
are payable on the 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.
(e) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
(a) In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or termination, as the case may be, will be
entitled to receive out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors,
distributions in an amount equal to the aggregate of the stated liquidation
amount of $25 per 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, Debentures in an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate equal to the Coupon Rate, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on, such
Securities outstanding at such time, have been distributed on a Pro Rata basis
to the Holders of the Securities in exchange for such Securities. Prior to any
such Liquidation Distribution, the Debenture Issuer will obtain any required
regulatory approval.
(b) 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
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Liquidation Distribution, then the amounts payable directly by the Trust on the
Securities shall be paid on a Pro Rata basis.
(c) Notwithstanding anything to the contrary in this Declaration,
each Holder of a Capital Security, by such holder's acceptance thereof, agrees
that upon any payment or distribution of assets to creditors of the Debenture
Issuer upon any liquidation, dissolution, winding up, reorganization, or in
connection with any insolvency, receivership or proceeding under any Bankruptcy
Law with respect to the Debenture Issuer, such Holder shall not have a claim for
deferred Distributions, to the extent that the aggregate amount thereof exceeds
25% of the original liquidation amount of such Security.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the Debenture
Issuer or pursuant to a Special Event as described below), the proceeds from
such repayment or payment shall be simultaneously applied to redeem Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed at a redemption price of $25 per
Security plus an amount equal to accrued and unpaid Distributions thereon at the
date of the redemption, payable in cash (the "Redemption Price"). Holders shall
be given not less than 30 nor more than 60 days' notice of such redemption.
Prior to any such redemption, the Debenture Issuer will obtain any required
regulatory approval.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata and the Capital Securities to
be redeemed will be as described in Section 4(f)(ii) below.
(c) Subject to obtaining any required regulatory approval, if, at
any time, a Tax Event, an Investment Company Event or a Regulatory Capital Event
(each as defined below, and each a "Special Event") shall occur and be
continuing, Citigroup shall have the right, upon not less than 30 nor more than
60 days' notice, to redeem the Debentures, in whole or in part, for cash within
90 days following the occurrence of such Special Event, and, following such
redemption, Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed shall 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 Citigroup or the Trust the opportunity to
eliminate, within such 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 will have no adverse effect on the Trust,
Citigroup or the holders of the Securities, then Citigroup or the Trust will
pursue such measure in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation
I-6
and the publication of any judicial decision or regulatory determination on or
after the date of the Prospectus), in either case after the date of the
Prospectus, there is more than an insubstantial risk that (i) the Trust would be
subject to United States federal income tax with respect to interest accrued or
received on the Debentures, (ii) the Trust would be subject to more than a de
minimis amount of other taxes, duties or other governmental charges, or (iii)
interest payable to the Trust on the Debentures would not be deductible, in
whole or in part, by the Debenture Issuer for United States federal income tax
purposes.
"Investment Company Event" means that the Regular Trustees shall
have received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment Company
Event Opinion") to the effect that, as a result of the occurrence of a change in
law or regulation or a written 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 a 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 the date of the Prospectus.
"Regulatory Capital Event" means a determination by Citigroup, based
on an opinion of counsel experienced in such matters (who may be an employee of
Citigroup or any of its affiliates), that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in
applicable laws or regulations or official interpretations thereof or policies
with respect thereto or (b) any official administrative pronouncement or
judicial decision interpreting or applying such laws or regulations, which
amendment, clarification, change, pronouncement or decision is announced or is
effective after the date of the Prospectus, there is more than an insubstantial
risk that the Capital Securities will no longer constitute Tier I Capital of
Citigroup or any bank holding company of which Citigroup is a subsidiary (or its
equivalent) for purposes of the capital adequacy guidelines or policies of the
Board of Governors of the Federal Reserve System or its successor as Citigroup's
primary federal banking regulator, provided, however that the distribution of
the Debentures in connection with the liquidation of the Trust shall not in and
of itself constitute a Regulatory Capital Event unless such liquidation shall
have occurred in connection with a Tax Event or an Investment Company Event.
On and from the date fixed by the Regular Trustees for any
distribution of the Debentures and dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) DTC or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of the Capital
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and (iii) any
certificates representing Securities, except for certificates representing
Capital Securities held by DTC or its nominee (or any successor Clearing Agency
or its nominee), will be deemed to represent beneficial interests in the
Debentures having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Securities until such certificates are presented to the Debenture Issuer or
its agent for transfer or reissue.
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(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Debentures are distributed to the Holders of the
Securities, pursuant to the terms of the Indenture, the Debenture Issuer will
use its best efforts to cause the Debentures to be listed on the New York Stock
Exchange or on such other exchange as the Capital Securities were listed
immediately prior to the distribution of the Debentures.
(f) Redemption or Distribution procedures will be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to the Institutional Trustee
and the Delaware Trustee and to each Holder of the Securities to be
redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(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 the
Holders of the Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of the 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 Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Capital Securities, it being understood that, in
respect of Capital Securities registered in the name of and held of record
by DTC or its nominee (or any successor Clearing Agency or its 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.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Capital Securities are in book-entry only
form, with respect to the Capital Securities, by 12:00 noon, New York City
time, on the redemption date, provided, that the Debenture Issuer has paid
to the Institutional Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures, the
Institutional Trustee will deposit irrevocably with DTC or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Capital Securities and
will give DTC (or any successor Clearing Agency) irrevocable instructions
and authority to pay the Redemption Price to the Holders of the Capital
Securities, and (B) with respect to Capital Securities issued in
definitive form and Common Securities, provided, that the Debenture Issuer
has paid the Institutional Trustee
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a sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Institutional Trustee will pay the
relevant Redemption Price to the Holders of such Securities by check
mailed to the address of the relevant Holder appearing on the books and
records of the Trust on the redemption date. If a Redemption/Distribution
Notice shall have been given and funds deposited as required, if
applicable, then immediately prior to the close of business on the date of
such deposit, or on the redemption date, as applicable, distributions will
cease to accrue on the Securities so called for redemption and all rights
of the Holders of such Securities so called for redemption will cease,
except the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption Price. Neither
the Regular Trustees nor the Trust shall be required to register or cause
to be registered the transfer of any Securities that have been so called
for redemption. If any date fixed for redemption of 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 any Securities is improperly
withheld or refused and not paid either by the Institutional Trustee or by
the Sponsor as guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to accrue from the original
redemption date to the actual 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 (A) in respect of the Capital
Securities, DTC or its nominee (or any successor Clearing Agency or its
nominee) if the Global Certificates have been issued or, if Definitive
Capital Security Certificates have been issued, to the Holder thereof and
(B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Debenture Issuer
or its affiliates may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market or by private
agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Capital Securities will
have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in aggregate liquidation amount of the Capital Securities,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or direct the exercise of 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 exercise any trust or power
I-9
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past Default (as defined in the Indenture) that is waivable under Section
5.6 of the Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all 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; provided, however, that, where
a consent or action under the Indenture would require the consent or act of each
holder of each Debenture affected thereby, such consent or action under the
Indenture shall not be effective until each Holder of Capital Securities shall
have consented to such action or provided such consent. The Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Capital Securities. Except with respect to directing the
time, method and place of conducting a proceeding for a remedy available to the
Institutional Trustee, the Institutional Trustee, as holder of the Debentures,
shall not take any of the actions described in clauses (i), (ii), (iii) or (iv)
above unless the Institutional Trustee has obtained an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes. If the
Institutional Trustee fails to enforce its rights under the Debentures, any
Holder of Capital Securities may directly institute a legal proceeding against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures without first instituting a legal proceeding against the
Institutional Trustee or any other Person or entity. If a Default under the
Declaration has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay interest or principal on the Debentures
on the date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a holder of Capital Securities may
also directly institute a proceeding for enforcement of payment to such holder
(a "Direct Action") of the principal of or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Capital
Securities of such holder on or after the respective due date specified in the
Debentures without first (i) directing the Institutional Trustee to enforce the
terms of the Debentures or (ii) instituting a legal proceeding directly against
the Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures. Except as provided in the preceding sentence, the Holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures. In connection with such Direct Action, Citigroup
will be subrogated to the rights of such Holder of Capital Securities under the
Declaration to the extent of any payment made by Citigroup to such holder of
Capital Securities in such Direct Action.
Any required approval or direction of Holders of Capital Securities
may be given at a separate meeting of Holders of Capital Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Capital 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 Capital 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.
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No vote or consent of the Holders of the Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or to distribute
the Debentures in accordance with this Declaration and the terms of the
Securities.
Notwithstanding that Holders of Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Sponsor or any Affiliate of the Sponsor
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.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c) and 7 as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with and subject to Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Default with respect to the Capital Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power conferred
upon the Institutional Trustee under the Declaration, including (i) directing
the time, method, 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) waiving any past Default
(as defined in the Indenture) that is waivable under Section 5.6 of the
Indenture, or (iii) exercising any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable, provided that,
where a consent or action under the Indenture would require the consent or act
of the Holders of greater than a majority in principal amount of Debentures
affected thereby (a "Super Majority"), the Institutional Trustee may only give
such consent or take such action at the written direction of the Holders of at
least the proportion in liquidation amount of the Common Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. Pursuant to this Section 6(c), the Institutional Trustee
shall not revoke any action previously authorized or approved by a vote of the
Holders of the Capital 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 not take any action in accordance with the
directions of the Holders of the Common Securities under this paragraph unless
the Institutional Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Common Securities may institute a legal proceeding directly against
any Person to enforce the Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.
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Any approval or direction 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 in 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 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 the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, 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 as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Capital Securities or only 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) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on 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 and 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, however, that where a consent under the Indenture would require
the consent of the holders of greater than a majority in aggregate principal
amount of the Debentures (a "Super Majority"), the Institutional Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding; provided, further, that the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Securities
under this Section 7(b) unless the Institutional Trustee has obtained an opinion
of tax counsel to the effect that for the purposes of United States federal
income tax the Trust will not be classified as other than a grantor trust on
account of such action.
I-12
8. Pro Rata.
A reference in these terms of the 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 a Default under
the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Capital
Securities pro rata according to the aggregate liquidation amount of Capital
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Capital Securities outstanding, and only after satisfaction of all
amounts owed to the Holders of the Capital 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.
9. Ranking.
The Capital Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where a Default (as
defined in the Indenture) occurs and is continuing under the Indenture in
respect of the Debentures held by the Institutional Trustee, the rights of
Holders of the Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights to payment of the Holders of the Capital Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Capital Securities to be listed on the New York Stock Exchange.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee, including the subordination provisions therein and to the provisions
of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration or the Capital
Securities Guarantee, and the Indenture to a Holder without charge on written
request to the Sponsor at its principal place of business.
I-13
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
THIS CAPITAL SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS CAPITAL
SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Certificate Number Number of Capital Securities
CUSIP NO. __________________
Certificate Evidencing Capital Securities
of
CITIGROUP CAPITAL XVI
% Capital Securities
(Liquidation Amount $25 per Capital Security)
CITIGROUP CAPITAL XVI, a statutory trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that ___________ (the
"Holder") is the registered owner of ________ (____) capital securities of the
Trust representing undivided beneficial interests in the assets of the Trust
designated the % Capital Securities (the "Capital Securities"). The Capital
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 designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities are set forth in, and this certificate and the Capital Securities
represented hereby are issued and shall in all respects be subject to, the
provisions of
A1-1
the Amended and Restated Declaration of Trust of the Trust dated as of , 20 ,
as the same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Capital Securities as set forth in Annex I
thereto. Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Holder is entitled to the benefits of the
Capital Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Capital Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Sponsor at its
principal place of business.
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 Indebtedness (as defined in the Indenture) and (ii) agreed to the
terms of the Capital Securities Guarantee, including that the Capital Securities
Guarantee is (A) subordinate and junior in right of payment to all other
liabilities of Citigroup, (B) pari passu with the most senior preferred or
preference stock now or hereafter issued by Citigroup and with any guarantee now
or hereafter issued by Citigroup with respect to preferred or preference stock
of Citigroup's affiliates and (C) senior to Citigroup's common stock.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Capital Securities
as evidence of indirect beneficial ownership in the Debentures.
A1-2
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of _______, ____.
_______________________________
Name:
Title: Regular Trustee
A1-3
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital 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 Capital 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 Capital Security
Certificate)
A1-4
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
CITIGROUP CAPITAL XVI
% Common Securities
(Liquidation Amount $25 per Common Security)
CITIGROUP CAPITAL XVI, a statutory trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Citigroup Inc., a
Delaware corporation (the "Holder"), is the registered owner of __________
(________) common securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the % Common Securities (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 thereof. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of , 20 , as the same may be amended from time to time
(the "Declaration"), including the designation of the terms of the Common
Securities as set forth in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration and the Indenture to a Holder without
charge upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
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 Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.
A2-1
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-2
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of _______, ____.
_________________________________
Name:
Title: Regular Trustee
A2-3
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers 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)
A2-4
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
EXHIBIT C
UNDERWRITING AGREEMENT
C-1