Exhibit 4.1
EXECUTION COPY
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THIRD SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER 21, 2006
BETWEEN
METLIFE, INC.,
AS ISSUER
AND
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
AS TRUSTEE
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS
Section 1.1 Definition of Terms................................................................... 1
ARTICLE 2 GENERAL TERMS AND CONDITIONS OF THE JUNIOR SUBORDINATED DEBENTURES
Section 2.1 Designation and Principal Amount...................................................... 15
Section 2.2 Final Maturity........................................................................ 15
Section 2.3 Form and Payment...................................................................... 15
Section 2.4 Interest.............................................................................. 16
ARTICLE 3 REDEMPTION OF THE JUNIOR SUBORDINATED DEBENTURES/SCHEDULED REDEMPTION
Section 3.1 Optional Redemption................................................................... 17
Section 3.2 Scheduled Redemption.................................................................. 18
Section 3.3 Redemption Procedure for Junior Subordinated Debentures............................... 20
Section 3.4 Payment of Securities Called for Redemption........................................... 21
Section 3.5 No Sinking Fund....................................................................... 21
ARTICLE 4 OPTIONAL DEFERRAL OF INTEREST AND TRIGGER EVENTS
Section 4.1 Optional Deferral of Interest......................................................... 21
Section 4.2 Notices of Deferral and Trigger Period................................................ 22
Section 4.3 Trigger Events........................................................................ 22
ARTICLE 5 EVENTS OF DEFAULT
Section 5.1 Events of Default..................................................................... 23
ARTICLE 6 COVENANTS
Section 6.1 Certain Restrictions During Optional Deferral Periods or Following a Trigger Event.... 25
Section 6.2 Obligation to Effect Certain Sales of Common Stock of the Company; Alternative Payment
Mechanism ............................................................................ 27
Section 6.3 Payment of Expenses................................................................... 29
Section 6.4 Payment Upon Resignation or Removal................................................... 29
ARTICLE 7 SUBORDINATION
Section 7.1 Agreement to Subordinate.............................................................. 30
Section 7.2 Liquidation; Dissolution; Bankruptcy.................................................. 30
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Section 7.3 Default on Senior Indebtedness........................................................ 31
Section 7.4 When Distribution Must Be Paid Over................................................... 31
Section 7.5 Subrogation........................................................................... 31
Section 7.6 Relative Rights....................................................................... 32
Section 7.7 Rights of the Trustee; Holders of Senior Indebtedness................................. 32
Section 7.8 Subordination May Not Be Impaired..................................................... 32
Section 7.9 Distribution.......................................................................... 32
Section 7.10 Authorization to Effect Subordination................................................. 33
ARTICLE 8 NOTICE
Section 8.1 Notice by the Company................................................................. 33
ARTICLE 9 FORM OF JUNIOR SUBORDINATED DEBENTURE
Section 9.1 Form of Junior Subordinated Debenture................................................. 33
ARTICLE 10 ORIGINAL ISSUE OF JUNIOR SUBORDINATED DEBENTURES
Section 10.1 Original Issue of Junior Subordinated Debentures...................................... 45
ARTICLE 11 LIMITATION ON CLAIMS
Section 11.1 Limitation on Claim for Deferred Interest Due to a Trigger Event in Bankruptcy........ 45
ARTICLE 12 Discharge, Defeasance and Covenant Defeasance
ARTICLE 13 MISCELLANEOUS
Section 13.1 Ratification of Base Indenture; Conflicts............................................. 46
Section 13.2 Junior Subordinated Debentures Unaffected by Other Supplemental Indentures............ 46
Section 13.3 Trustee Not Responsible for Recitals.................................................. 46
Section 13.4 Tax Treatment......................................................................... 46
Section 13.5 Governing Law......................................................................... 46
Section 13.6 Separability.......................................................................... 46
Section 13.7 Counterparts.......................................................................... 47
Section 13.8 Calculation Agent and Premium Calculation Agent....................................... 47
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THIRD SUPPLEMENTAL INDENTURE, dated as of December 21, 2006 (this
"Third Supplemental Indenture"), between MetLife, Inc., a Delaware corporation
(the "Company"), and The Bank of New York Trust Company, N.A., as trustee (the
"Trustee"), supplementing the Subordinated Indenture, dated as of June 21, 2005
(the "Base Indenture"), between the Company and The Bank of New York Trust
Company, N.A. (as successor in interest to J.P. Morgan Trust Company, National
Association), as trustee.
RECITALS
WHEREAS, the Company executed and delivered the Base Indenture to
the Trustee to provide for the future issuance of the Company's unsecured
subordinated debentures, notes or other evidence of indebtedness (the
"Securities"), to be issued from time to time in one or more series as might be
determined by the Company under the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture and this Third
Supplemental Indenture (together, the "Indenture"), the Company desires to
provide for the establishment of a new series of its Securities to be known as
its 6.40% Fixed-to-Floating Rate Junior Subordinated Debentures due 2066 (the
"Junior Subordinated Debentures"), the form and substance of such Junior
Subordinated Debentures and the terms, provisions and conditions thereof to be
set forth herein as provided in the Indenture;
WHEREAS, the Company has requested that the Trustee execute and
deliver this Third Supplemental Indenture; and
WHEREAS, all requirements necessary to make this Third Supplemental
Indenture a valid instrument in accordance with its terms, and to make the
Junior Subordinated Debentures, when executed by the Company and authenticated
and delivered by the Trustee, the valid obligations of the Company, have been
done and performed, and the execution and delivery of this Third Supplemental
Indenture have been duly authorized in all respects.
NOW, THEREFORE, in consideration of the purchase and acceptance of
the Junior Subordinated Debentures by the holders thereof, and for the purpose
of setting forth, as provided in the Indenture, the form and substance of the
Junior Subordinated Debentures and the terms, provisions and conditions thereof,
the Company covenants and agrees with the Trustee as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINITION OF TERMS.
Unless the context otherwise requires or unless otherwise set forth
herein:
(a) a term not defined herein that is defined in the Base Indenture,
as previously supplemented, has the same meaning when used in this Third
Supplemental Indenture;
(b) the definition of any term in this Third Supplemental Indenture
that is also defined in the Base Indenture, as previously supplemented, shall
for the purposes of this Third Supplemental Indenture supersede the definition
of such term in the Base Indenture, as previously supplemented;
(c) a term defined anywhere in this Third Supplemental Indenture has
the same meaning throughout;
(d) the definition of a term in this Third Supplemental Indenture is
not intended to have any effect on the meaning or definition of an identical
term that is defined in the Base Indenture, as previously supplemented, insofar
as the use or effect of such term in the Base Indenture, as previously defined,
is concerned;
(e) the singular includes the plural and vice versa;
(f) headings are for convenience of reference only and do not affect
interpretation; and
(g) the following terms have the meanings given to them in this
Section 1.1(g):
"Acceleration Date" has the meaning provided in Section 4.1 hereof.
"Adjusted Stockholders' Equity Amount" means, as of any quarter end
and subject to certain adjustments, the stockholders' equity of the Company as
reflected on the Company's consolidated GAAP balance sheet as of such quarter
end, minus accumulated other comprehensive income as reflected on such
consolidated balance sheet.
"Alternative Payment Mechanism" has the meaning provided in Section
6.2(a) hereof.
"Annual Statement" means, as to a U.S. Life Insurance Subsidiary,
the annual statement of such U.S. Life Insurance Subsidiary containing its
statutory balance sheet and income statement as required to be filed by it with
one or more state insurance commissioners or other state insurance regulatory
authorities.
"Base Indenture" has the meaning provided in the preamble hereto.
"Benchmark Quarter" means, with respect to any completed fiscal
quarter, the fiscal quarter that is 10 fiscal quarters prior to such completed
fiscal quarter.
"Business Day" means any day which is not (i) a Saturday, a Sunday
or a legal holiday, and (ii) a day on which banking institutions or trust
companies located in New York City are authorized or obligated by law to close,
and, on or after December 15, 2036, a day which is not a London Banking Day.
"Calculation Agent" means The Bank of New York Trust Company, N.A.,
or any other firm appointed by the Company, acting as Calculation Agent.
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"Commercially Reasonable Efforts" means commercially reasonable
efforts on the part of the Company to complete the offer and sale of shares of
the Company's Common Stock to third parties that are not Subsidiaries of the
Company in public offerings or private placements, provided that the Company
shall be deemed to have made such Commercially Reasonable Efforts during a
Market Disruption Event or for so long as the Company is prevented from selling
its Common Stock in accordance with the Alternative Payment Mechanism because it
does not have Shares Available for Issuance, regardless of whether the Company
makes any offers or sales during such Market Disruption Event. The Company will
not be considered to have made such Commercially Reasonable Efforts to effect a
sale of Common Stock if it determines to not pursue or complete such sale due to
pricing, dividend rate or dilution considerations.
"Common Stock" means shares of common stock of the Company,
including treasury shares and shares sold pursuant to the Company's dividend
reinvestment plans and employee benefit plans.
"Company" shall have the meaning set forth in the preamble hereto.
"Company Action Level" has the meaning specified in the definition
of the term Risk-Based Capital Ratio.
"Comparable Treasury Issue" means the U.S. Treasury security
selected by the Premium Calculation Agent as having a maturity comparable to the
term remaining from the early Redemption Date to December 15, 2031 (the
"Remaining Life") that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable term.
"Comparable Treasury Price" means, with respect to an early
Redemption Date (1) the average of five Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest reference treasury
dealer quotations, or (2) if the Premium Calculation Agent obtains fewer than
five such Reference Treasury Dealer Quotations, the average of all such
quotations.
"Compounded Interest" means additional interest on any accrued and
unpaid interest to the extent permitted by applicable law at the then applicable
interest rate on the Junior Subordinated Debentures.
"Covered Insurance Subsidiaries" means the Company's largest U.S.
Life Insurance Subsidiaries (in terms of general admitted assets) that
collectively account for 80% or more of the General Account Admitted Assets of
all of the Company's U.S. Life Insurance Subsidiaries.
"Current Market Price" with respect to the Common Stock on any date
means the closing sale price per share (or if no closing sale price is reported,
the average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on that date as reported
in composite transactions by the New York Stock Exchange or, if the Common Stock
is not then listed on the New York Stock Exchange, as reported by the principal
U.S. securities exchange on which the Common Stock is traded or quoted. If the
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Common Stock is not either listed or quoted on any U.S. securities exchange on
the relevant date, the Current Market Price will be the last quoted bid price
for the Common Stock in the over-the-counter market on the relevant date as
reported by the National Quotation Bureau or similar organization. If the Common
Stock is not so quoted, the Current Market Price will be the average of the
mid-point of the last bid and ask prices for the Common Stock on the relevant
date from each of at least three nationally recognized independent investment
banking firms selected by the Company for this purpose.
"Depositary," with respect to the Junior Subordinated Debentures,
means The Depository Trust Company or any successor clearing agency.
"Event of Default" has the meaning ascribed to such term in Section
5.1 hereof.
"Fifth Deferral Anniversary" has the meaning provided in Section
6.2(a) hereof.
"Final Maturity Date" has the meaning set forth in Section 2.2
hereof.
"Fixed Rate Period" has the meaning provided in Section 2.4 (a)
hereof.
"Floating Rate Period" has the meaning provided in Section 2.4 (b)
hereof.
"Foregone Interest" has the meaning provided in Section 11.1 hereof.
"GAAP" means, at any date or for any period, U.S. generally accepted
accounting principles as in effect on such date or for such period.
"General Account Admitted Assets" means, as to a U.S. Life Insurance
Subsidiary as of any year end, the total admitted assets of such U.S. Life
Insurance Subsidiary as reflected on the balance sheet included in its statutory
financial statements as of such year end minus the separate account assets
reflected on such balance sheet.
"Indenture" has the meaning set forth in the recitals hereto.
"Interest Payment Date" means, during the Fixed Rate Period, each of
June 15 and December 15, commencing June 15, 2007 and during the Floating Rate
Period, each of March 15, June 15, September 15 and December 15, commencing
December 15, 2036; provided that, if any such day is not a Business Day, then,
with respect to an Interest Payment Date during the Fixed Rate Period, the
Interest Payment Date shall be the immediately succeeding Business Day, and with
respect to an Interest Payment Date during the Floating Rate Period, the
Interest Payment Date shall be the immediately succeeding Business Day unless
such date falls in the next calendar month, in which case the Interest Payment
Date will be the immediately preceding Business Day, except that if any of the
Interest Payment Dates during the Floating Rate Period falls on a date fixed for
redemption or repayment and such day is not a Business Day, the interest payment
due on that date will be postponed to the next day that is a Business Day
without any interest or other payment in respect of any such delay in connection
with such redemption or repayment.
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"Interest Payment Period" means the period from and including an
Interest Payment Date to but not including the next succeeding Interest Payment
Date, except for the first Interest Payment Period which shall be the period
from and including the date of initial issuance of the Junior Subordinated
Debentures (subject to Section 2.1(b) hereof) to but not including June 15,
2007.
"Junior Subordinated Debentures" has the meaning set forth in the
recitals hereto.
"LIBOR Determination Date" means the second London Banking Day
immediately preceding the first day of the relevant Interest Payment Period.
"London Banking Day" means any day on which commercial banks are
open for general business (including dealings in deposits in U.S. dollars) in
London, England.
"Make-Whole Redemption Amount" means the sum, as calculated by the
Premium Calculation Agent, of the present values of the remaining scheduled
payments of principal (discounted from December 15, 2031) and interest that
would have been payable to and including December 15, 2031 (discounted from
their respective Interest Payment Dates) on the Junior Subordinated Debentures
to be redeemed (not including any portion of such payments of interest accrued
to the Redemption Date) to the Redemption Date on a semi-annual basis (assuming
a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 35
basis points; plus accrued and unpaid interest, together with any Compounded
Interest, on the principal amount of the Junior Subordinated Debentures being
redeemed to the Redemption Date.
"Market Disruption Event" means the occurrence or existence of any
of the following events or sets of circumstances:
(i) trading in securities generally on any national securities
exchange or over-the-counter market, on which the Common Stock
is then listed or traded (as of the date of this Third
Supplemental Indenture, the New York Stock Exchange), is
suspended or the settlement of such trading generally is
materially disrupted or minimum prices are established on any
such exchange or such market by the SEC, by such exchange or
by any other regulatory body or governmental authority having
jurisdiction, and the establishment of such minimum prices
materially disrupts or otherwise has a material adverse effect
on trading in, and the issuance and sale of, the Common Stock;
(ii) if the Company were required to obtain the consent or approval
of its stockholders, a regulatory body or governmental
authority to issue or sell Common Stock pursuant to the
Alternative Payment Mechanism or to issue or sell Qualifying
Capital Securities pursuant to the Replacement Capital
Obligation and, after using its commercially reasonable
efforts to obtain such consent or approval, it fails to obtain
that consent or approval;
(iii) a material disruption or banking moratorium occurs or has been
declared in commercial banking or securities settlement or
clearance services in the United States;
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(iv) there shall have occurred such a material adverse change in
general domestic or international economic, political or
financial conditions, including without limitation as a result
of terrorist activities, or the effect of international
conditions on the financial markets in the United States is
such, as to make it, in the Company's judgment, impracticable
to proceed with the issuance and sale of Common Stock pursuant
to the Alternative Payment Mechanism or the issuance and sale
of Qualifying Capital Securities pursuant to the Replacement
Capital Obligation;
(v) an event occurs and is continuing as a result of which the
offering document for the offer and sale of Common Stock
pursuant to the Alternative Payment Mechanism or the offer and
sale of Qualifying Capital Securities pursuant to the
Replacement Capital Obligation would, in the Company's
reasonable judgment, contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading and either (1) the disclosure of that event at such
time, in the Company's judgment, would have a material adverse
effect on its business, or (2) the disclosure relates to a
previously undisclosed proposed or pending material business
transaction, and the Company has a bona fide reason for
keeping the same confidential or its disclosure would impede
the Company's ability to consummate such transaction; provided
that no single suspension period contemplated by this clause
(v) may exceed 90 consecutive days and multiple suspension
periods contemplated by this clause (v) may not exceed an
aggregate of 180 days in any 360-day period; or
(vi) the Company reasonably believes that the offering document for
the offer and the sale of the Common Stock pursuant to the
Alternative Payment Mechanism or the offer and sale of
Qualifying Capital Securities pursuant to the Replacement
Capital Obligation would not be in compliance with a rule or
regulation of the SEC (for reasons other than those referred
to in clause (v)) and the Company is unable to comply with
such rule or regulation or such compliance is impracticable;
provided that no single suspension period contemplated by this
clause (vi) may exceed 90 consecutive days and multiple
suspension periods contemplated by this clause (vi) may not
exceed an aggregate of 180 days in any 360-day period.
"Maturity Date" means the Final Maturity Date and any earlier date
on which the Junior Subordinated Debentures become due and payable, whether
pursuant to a notice of redemption, acceleration or otherwise and on which the
principal shall be due and payable together with all accrued and unpaid interest
thereon, including Compounded Interest.
"Model Act" means the NAIC Risk-Based Capital (RBC) for Insurers
Model Act as included in the NAIC's Model Laws, Regulations and Guidelines as of
June 15, 2006 and as hereinafter amended, modified or supplemented.
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"MoneyLine Telerate Page" means the display on Moneyline Telerate,
Inc., or any successor service, on Telerate Page 3750 or any replacement page or
pages on that service.
"Most Recently Completed Quarter" means:
(i) as to an Interest Payment Date on March 31, the quarter ended
on the preceding December 31;
(ii) as to an Interest Payment Date on June 30, the quarter ended
on the preceding March 31;
(iii) as to an Interest Payment Date on September 30, the quarter
ended on the preceding June 30; and
(iv) as to an Interest Payment Date on December 31, the quarter
ended on the preceding September 30.
"NAIC" means the National Association of Insurance Commissioners.
"Notice Date" has the meaning provided in Section 3.2(d) hereof.
"NRSRO" means a nationally recognized statistical rating
organization within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Securities
Exchange Act of 1934, as amended.
"Optional Deferral" has the meaning provided in Section 4.1 hereof.
"Optional Deferral Period" has the meaning provided in Section 4.1
hereof.
"Optionally Deferred Interest" has the meaning provided in Section
4.1 hereof.
"Other Covenant Default" has the meaning provided in Section 5.1(b)
hereof.
"Other Covenant Default Notice" has the meaning provided in Section
5.1(c) hereof.
"Par Redemption Amount" means a cash redemption price of 100% of the
principal amount of the Junior Subordinated Debentures to be redeemed, plus
accrued and unpaid interest, together with any Compounded Interest, on such
Junior Subordinated Debentures to the date of redemption.
"Parity Debt Securities" has the meaning provided in Section 6.1(b)
hereof.
"Parity Guarantees" has the meaning provided in Section 6.1(c)
hereof.
"Parity Securities" has the meaning provided in Section 6.1(c)
hereof.
"Premium Calculation Agent" means The Bank of New York Trust
Company, N.A., or any other firm appointed by the Company or, if that firm is
unwilling or unable to select the Comparable Treasury Issue or calculate the
Make-Whole Redemption Amount or Special
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Event Make-Whole Redemption Amount, an investment banking institution of
national standing appointed by the Company.
"Primary Treasury Dealer" means a primary U.S. government securities
dealer in New York City.
"QCS Commercially Reasonable Efforts" means commercially reasonable
efforts on the part of the Company to complete the offer and sale of Qualifying
Capital Securities to third parties that are not Subsidiaries of the Company in
public offerings or private placements, provided that the Company will be deemed
to have made such QCS Commercially Reasonable Efforts during a Market Disruption
Event, regardless of whether the Company makes any offers or sales during such
Market Disruption Event. The Company will not be considered to have made such
QCS Commercially Reasonable Efforts to effect a sale of Qualifying Capital
Securities if it determines to not pursue or complete such sale due to pricing,
coupon, dividend rate or dilution considerations.
"QCS Proceeds Collection Period" means, with respect to any Required
Repayment Date that is the Scheduled Redemption Date, the period commencing 180
days, and with respect to any subsequent Required Repayment Date, the period
commencing 90 days, prior thereto and ending on the Notice Date with respect
thereto.
"Qualifying APM Securities" means: (i) Common Stock; and (ii)
Qualifying Warrants.
"Qualifying Capital Securities" has the meaning given to it in the
RCC.
"Qualifying Warrants" means net share settled warrants to purchase
Common Stock that the Company can sell at its sole discretion and that have an
exercise price greater than the Current Market Price of the Common Stock as of
their date of issuance, that the Company is not entitled to redeem for cash and
that the holders of which are not entitled to require the Company to repurchase
for cash in any circumstance.
"Rating Agency Event" means a change by any NRSRO that rates the
Junior Subordinated Debentures, in the equity rating criteria for securities
such as the Junior Subordinated Debentures as is in effect on the date of this
Third Supplemental Indenture, which change results in lower equity credit being
given to the Junior Subordinated Debentures than the equity credit that would
have been given to the Junior Subordinated Debentures in the absence of such
change.
"RBC" has the meaning provided herein in the definition of Risk
Based Capital Ratio.
"RCC" means the replacement capital covenant the Company has entered
into for the benefit of holders of Covered Debt (as defined therein) on December
21, 2006, as amended or supplemented from time to time, a copy of which shall be
delivered by the Company to the Trustee on or before the date hereof.
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"Reference Treasury Dealer" means (1) each of Goldman, Sachs & Co.,
J.P. Morgan Securities Inc. and Merrill Lynch & Co. and their successors,
provided, however, that if any of the foregoing shall cease to be a Primary
Treasury Dealer the Company will substitute therefor another Primary Treasury
Dealer, and (2) any other Primary Treasury Dealers selected by the Premium
Calculation Agent after consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any early Redemption Date, the average, as
determined by the Premium Calculation Agent, of the bid and ask prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Premium Calculation Agent at 5:00
p.m., New York City time, on the third Business Day preceding such Redemption
Date.
"Registered Security" means any Security in the form established
pursuant to Section 9.1 hereof which is registered as to principal and interest
in the Security Register.
"Relevant Period" has the meaning set forth in the definition of
Three-Month LIBOR.
"Remaining Life" has the meaning set forth in the definition of
Comparable Treasury Issue.
"Replacement Capital Obligation" means the Company's obligations
under Section 3.2.
"Required Repayment Date" has the meaning provided in Section 3.2
(d) hereof.
"Risk-Based Capital Ratio" means the ratio that insurance companies
are required to calculate and report to their regulators as of the end of each
year in accordance with prescribed procedures. The ratio measures the
relationship of the insurance companies' "total adjusted capital" calculated in
accordance with those prescribed procedures, relative to a standard that is
determined based on the magnitude of various risks present in the insurer's
operations. For all Covered Insurance Subsidiaries, calculated on a combined
basis, this ratio equals the sum of total adjusted capital amounts for Covered
Insurance Subsidiaries divided by the sum of Company Action Level amounts for
those same subsidiaries. The NAIC's model risk-based capital, or "RBC," law sets
forth the RBC levels, ranging from the Company Action Level to the mandatory
control level, at which certain corrective actions are required and at which a
state insurance regulator is authorized and expected to take regulatory action.
The highest RBC level is known as the "Company Action Level." If an insurance
company's Total Adjusted Capital is higher than the Company Action Level, no
corrective action is required to be taken. At progressively lower levels of
Total Adjusted Capital, an insurance company faces increasingly rigorous levels
of corrective action, including the submission of a comprehensive financial plan
to the insurance regulator in its state of domicile, a mandatory examination or
analysis of the insurer's business and operations by the regulator and the
issuance of appropriate corrective orders to address the insurance company's
financial problems, and, at the lowest levels, either voluntary or mandatory
action by the regulator to place the insurer under regulatory control. The
Company Action Level
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is twice the level (known as the "authorized control level") below which the
regulator is authorized (but not yet required) to place the insurance company
under regulatory control.
"Scheduled Redemption Date" has the meaning set forth in Section
3.2(a).
"SEC" means the U.S. Securities and Exchange Commission.
"Securities" has the meaning set forth in the recitals of this Third
Supplemental Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means principal of, and interest and premium,
if any, on, and any other amounts payable in respect of (i) all indebtedness of
the Company, whether outstanding on the date of the initial issuance of the
Junior Subordinated Debentures or thereafter created, incurred or assumed, which
is for money borrowed (including, without limitation, trust preferred securities
of statutory trusts and related subordinated debentures and guarantees of the
Company issued under the Base Indenture), or which is evidenced by a note or
similar instrument given in connection with the acquisition of any business,
properties or assets, including securities; (ii) all obligations of the Company
under leases required or permitted to be capitalized under GAAP; (iii) any
indebtedness referred to in clause (i) of other Persons for the payment of which
the Company is responsible or liable as guarantor or otherwise; and (iv)
amendments, modifications, renewals, extensions, deferrals and refundings of any
of the above types of indebtedness; provided, however, that Senior Indebtedness
shall not include: (1) indebtedness incurred for the purchase of goods or
materials or for services obtained in the ordinary course of business (i.e.,
trade accounts payable), which will rank equally in right of payment and upon
liquidation with the Junior Subordinated Debenture; (2) any indebtedness which
by its terms ranks equally with or subordinated to the Junior Subordinated
Debentures in right of payment or upon liquidation; (3) indebtedness owed by the
Company to its Subsidiaries, which also will rank equally in right of payment
and upon liquidation to the Junior Subordinated Debentures; and (4) any
liability for Federal, state, local or other taxes owed or owing by the Company
or its Subsidiaries. Senior Indebtedness will continue to be Senior Indebtedness
and entitled to the benefits of the subordination provisions of this Indenture
irrespective of any amendment, modification or waiver of any term of the Senior
Indebtedness or extension or renewal of the Senior Indebtedness.
"Shares Available for Issuance" means a number of shares of Common
Stock calculated in two steps, as follows:
(i) first, the Company will deduct from the number of its
authorized and unissued shares of Common Stock, the maximum
number of shares of Common Stock that can be issued under
existing options, warrants, convertible securities, any
equity-linked contracts and other agreements which require it
to issue a determinable number of shares of Common Stock; and
(ii) after the Company deducts the number of shares of Common Stock
provided for in clause (i) from the number of the Company's
authorized
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and unissued shares of Common Stock, the Company will allocate
on a pro rata basis or such other basis as it determines is
appropriate, the remaining authorized and unissued shares of
Common Stock to the Alternative Payment Mechanism and to any
other similar commitment that is of an indeterminate nature
and under which the Company is then required to issue shares
of Common Stock;
provided, that by acceptance of the Junior Subordinated Debentures, each holder
of Junior Subordinated Debentures expressly agrees that the Company may modify
the foregoing definition of "Shares Available for Issuance" and the related
provisions of this Third Supplemental Indenture without the consent of holders
of the Junior Subordinated Debentures, provided that (i) the Company has
determined, in good faith, that such modification is not materially adverse to
such holders, (ii) the rating agencies then rating the Junior Subordinated
Debentures confirm the then current ratings of the Junior Subordinated
Debentures and (iii) the number of Shares Available for Issuance after giving
effect to such modification will not fall below the then applicable threshold
set forth in Section 6.2(c) hereof.
For the avoidance of doubt, if the number of authorized shares of Common Stock
remaining after the two steps described above is not sufficient to satisfy the
Company's remaining commitments, the Company will have no obligation, other than
its obligation to use commercially reasonable efforts as provided for in Section
6.2(c), to seek shareholder consent to increase the number of authorized and
unissued shares of Common Stock.
"Special Event Make-Whole Redemption Amount" means the sum, as
calculated by the Premium Calculation Agent, of the present values of the
remaining scheduled payments of principal (discounted from December 15, 2031)
and interest that would have been payable to and including December 15, 2031
(discounted from their respective Interest Payment Dates) on the Junior
Subordinated Debentures to be redeemed (not including any portion of such
payments of interest accrued to the Redemption Date) to the Redemption Date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 50 basis points; plus accrued and unpaid interest,
together with any Compounded Interest, on the principal amount of the Junior
Subordinated Debentures being redeemed to the Redemption Date.
"Tax Event" means with respect to the Junior Subordinated Debentures
the receipt by the Company of an opinion of counsel, rendered by a law firm with
experience in such matters, to the effect that, as a result of (a) any amendment
to, or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, (b) any official administrative
pronouncement (including a private letter ruling, technical advice memorandum or
similar pronouncement) or judicial decision interpreting or applying such laws
or regulations, or (c) a threatened challenge asserted in connection with an
audit of the Company or any of the Company's subsidiaries, or a threatened
challenge asserted in writing against any other taxpayer that has raised capital
through the issuance of securities that are substantially similar to the Junior
Subordinated Debentures, which amendment or change is enacted or effective or
which pronouncement or decision is announced or which challenge becomes publicly
known on or after the date of initial issuance of the Junior Subordinated
Debentures, there is more than an insubstantial increase in the risk that
interest accruing or payable by the Company on the Junior
11
Subordinated Debentures is not or, at any time subsequent to the Company's
receipt of such opinion, will not be, wholly deductible by the Company for U.S.
Federal income tax purposes.
"Telerate Page 3750" means the display designated on page 3750 on
MoneyLine Telerate Page (or such other page as may replace the 3750 page on the
service or such other service as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates for
U.S. Dollar deposits).
"Third Supplemental Indenture" has the meaning provided in the
preamble hereto.
"Three-Month LIBOR" means, with respect to any Interest Payment
Period, the rate (expressed as a percentage per annum) for deposits in U.S.
dollars for a three-month period commencing on the first day of that Interest
Payment Period and ending on the next Interest Payment Date (the "Relevant
Period") that appears on MoneyLine Telerate Page 3750 as of 11:00 a.m. (London
time) on the LIBOR Determination Date for that Interest Payment Period. If such
rate does not appear on MoneyLine Telerate Page 3750, LIBOR will be determined
on the basis of the rates at which deposits in U.S. dollars for the Relevant
Period and in a principal amount of not less than $1,000,000 are offered to
prime banks in the London interbank market by four major banks in the London
interbank market selected by the Calculation Agent (after consultation with the
Company), at approximately 11:00 a.m., London time on the LIBOR Determination
Date for that Interest Payment Period. The Calculation Agent will request the
principal London office of each such bank to provide a quotation of its rate. If
at least two such quotations are provided, Three-Month LIBOR with respect to
that Interest Payment Period will be the arithmetic mean (rounded upward if
necessary to the nearest whole multiple of 0.00001%) of such quotations. If
fewer than two quotations are provided, Three-Month LIBOR with respect to that
Interest Payment Period will be the arithmetic mean (rounded upward if necessary
to the nearest whole multiple of 0.00001%) of the rates quoted by three major
banks in New York City selected by the Calculation Agent (after consultation
with the Company), at approximately 11:00 a.m., New York City time, on the first
day of that Interest Payment Period for loans in U.S. dollars to leading
European banks for the Relevant Period and in a principal amount of not less
than $1,000,000. However, if fewer than three banks selected by the Calculation
Agent to provide quotations are quoting as described above, Three-Month LIBOR
for that Interest Payment Period will be the same as LIBOR as determined for the
previous Interest Payment Period or, in the case of the Interest Payment Period
beginning on December 15, 2036, 4.195%. The establishment of Three-Month LIBOR
for each Interest Payment Period beginning on or after December 15, 2036 by the
Calculation Agent shall (in the absence of manifest error) be final and binding.
"Total Adjusted Capital" has the meaning specified in subsection M
of Section 1 (or the relevant successor section, if any) of the Model Act.
"Trailing Four Quarters Consolidated Net Income Amount" means, for
any fiscal quarter, the sum of the Company's consolidated GAAP net income for
the four fiscal quarters ending as of the last day of such fiscal quarter.
"Treasury Rate" means, with respect to any Redemption Date, the
yield, under the heading that represents the average for the immediately
preceding week, appearing in the most
12
recently published statistical release designated H.15(519) or any successor
publication that is published weekly by the Board of Governors of the Federal
Reserve System and that establishes yields on actively traded U.S. Treasury
securities adjusted to constant maturity under the caption Treasury Constant
Maturities, for the maturity corresponding to the Comparable Treasury Issue (if
no maturity is within three months before or after the Remaining Life), yields
for the two published maturities most closely corresponding to the Comparable
Treasury Issue will be determined and the Treasury Rate will be interpolated or
extrapolated from such yields on a straight line basis, rounding to the nearest
month); or if such release (or any successor release) is not published during
the week preceding the calculation date or does not contain such yields, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date. The Treasury Rate will be
calculated on the third Business Day preceding the Redemption Date.
"Trigger Event" will have occurred if one of the following
conditions exists as of the date which is 30 days prior to any Interest Payment
Date:
(i) the Covered Insurance Subsidiaries' Risk-Based Capital Ratio
is less than 175% of the Company Action Level for the Covered
Insurance Subsidiaries, in the case of each Covered Insurance
Subsidiary based on the most recent annual financial
statements for the year ended prior to such Interest Payment
Date for which such Covered Insurance Subsidiary has filed its
Annual Statement with the applicable state insurance
commissioners; or
(ii) (x) the Trailing Four Quarters Consolidated Net Income Amount,
for the period ending on the last day of the quarter that is
two quarters prior to the Most Recently Completed Quarter is
zero or a negative amount, and (y) the Adjusted Stockholders'
Equity Amount, as of the last day of the Most Recently
Completed Quarter and as of the end of the quarter that is two
quarters before the Most Recently Completed Quarter, has
declined by 10% or more as compared to the Adjusted
Stockholders' Equity Amount at the end of the Benchmark
Quarter;
provided, however, that
(A) if, because of a change in GAAP that results in a
cumulative effect of a change in an accounting principle
or a restatement, either (i) the Company's consolidated
net income is higher or lower than it would have been
absent such change, then, for purposes of making the
calculations described in clause (ii)(x) above,
commencing with the fiscal quarter for which such change
in GAAP becomes effective, such consolidated net income
will be calculated on a pro forma basis as if such
change had not occurred; or (ii) the Adjusted
Stockholders' Equity Amount as of a quarter end is
higher or lower than it would have been absent such
change, then, for purposes of making the calculations
described in clause (ii)(y) above, the
13
Adjusted Stockholders' Equity Amount will be calculated
on a pro forma basis as if such change had not occurred;
and
(B) if, after the end of the Benchmark Quarter for an
Interest Payment Date and before the end of the next
quarter, the Company issues a material amount of equity
securities to fund an acquisition of a business or
assets, with the consequence that the Adjusted
Stockholders' Equity Amount as of the end of subsequent
quarters is higher than otherwise would have been the
case, then for purposes of making the calculation
described in clause (ii)(y) above, commencing with the
quarter end after such issuance of a material amount of
equity securities, the Adjusted Stockholders' Equity
Amount will be calculated on a pro forma basis without
giving effect to the issuance of such material amount of
equity securities until the later of (x) the first
quarter end that is more than ten quarters after the end
of the Benchmark Quarter and (y) if a Trigger Event
occurs before the quarter end determined pursuant to
clause (x), the first quarter end as of which a Trigger
Period is no longer continuing. For purposes of this
clause, a "material amount of equity securities" means
equity securities that result in an increase in the
Adjusted Stockholders' Equity Amount equal to or
exceeding the greater of (i) 1.5% of the Company's
stockholders' equity as of the end of the relevant
Benchmark Quarter and (ii) $100 million, in each case
calculated without giving effect to this paragraph.
"Trigger Period" means a period commencing upon the occurrence of a
Trigger Event and continuing until the Company is able again to satisfy both
tests set forth in the definition of Trigger Event. In addition, in the case of
a Trigger Event described in clause (ii) of the definition of "Trigger Event,"
the Trigger Period will continue until the Company is able again to satisfy the
two tests in clauses (i) and (ii) of the definition of "Trigger Event" for an
Interest Payment Date and the Company's Adjusted Stockholders' Equity Amount has
increased, or has declined by less than 10%, in either case as compared to the
Adjusted Stockholders' Equity Amount at the end of the Benchmark Quarter for
each Interest Payment Date as to which a Trigger Event had occurred under clause
(ii) of the definition of "Trigger Event".
"Trustee" has the meaning set forth in the preamble hereto.
"U.S. Life Insurance Subsidiary" means any of the Company's
Subsidiaries that is organized under the laws of any state in the United States
and is licensed as a life insurance company in any state in the United States
but does not include any Subsidiary of a U.S. Life Insurance Subsidiary.
14
ARTICLE 2
GENERAL TERMS AND CONDITIONS OF THE JUNIOR SUBORDINATED
DEBENTURES
SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT.
(a) There is hereby authorized a series of Securities designated the 6.40%
Fixed-to-Floating Rate Junior Subordinated Debentures due 2066, limited in
aggregate principal amount to not more than $1,250,000,000 (subject to Section
2.1(b) hereof), which amount to be issued shall be as set forth in any written
order of the Company for the authentication and delivery of Junior Subordinated
Debentures pursuant to the Indenture.
(b) The Company may, from time to time, subject to compliance with any
other applicable provisions of this Third Supplemental Indenture but without the
consent of the holders of the Junior Subordinated Debentures, create and issue
pursuant to this Third Supplemental Indenture an unlimited principal amount of
additional Junior Subordinated Debentures (in excess of any amounts theretofore
issued) having the same terms and conditions as those of the other Outstanding
Junior Subordinated Debentures, except that any such additional Junior
Subordinated Debentures (i) must be issued on an Interest Payment Date and (ii)
may have a different issue date and issue price from other Outstanding Junior
Subordinated Debentures. Such additional Junior Subordinated Debentures shall
constitute part of the same series of Junior Subordinated Debentures hereunder,
unless any such adjustment pursuant to this Section 2.1(b) shall cause such
additional Junior Subordinated Debentures to constitute, as determined pursuant
to an Opinion of Counsel, a different class of securities than the original
series of Securities for U.S. federal income tax purposes.
SECTION 2.2 FINAL MATURITY.
The final maturity date shall be December 15, 2066 (the "Final Maturity
Date"). Notwithstanding the preceding sentence, in the event that the Final
Maturity Date is not a Business Day, then the Final Maturity Date will be the
next succeeding day which is a Business Day.
SECTION 2.3 FORM AND PAYMENT.
Except as provided in Section 2.4 hereof, the Junior Subordinated
Debentures shall be issued in fully registered certificated form without
interest coupons in denominations of $1,000 and integral multiples thereof,
bearing identical terms. The Depository Trust Company shall serve as the initial
Depositary for the Junior Subordinated Debentures. Principal and interest on the
Junior Subordinated Debentures issued in certificated form will be payable, the
transfer of such Junior Subordinated Debentures will be registrable and such
Junior Subordinated Debentures will be exchangeable for Junior Subordinated
Debentures bearing identical terms and provisions at the Corporate Trust Office
of the Trustee; provided, however, that payment of interest may be made at the
option of the Company (with the consent of the Trustee) by check mailed to the
holder of a Junior Subordinated Debenture at such address as shall appear in the
Security Register; provided further, that, notwithstanding the foregoing
provisions of this Section 2.3, for so long as the Depositary is the holder of
all of the Outstanding Junior
15
Subordinated Debentures, and provided that the Depositary has provided wire
transfer instructions to the Company or the Paying Agent in a timely manner
prior to each Interest Payment Date (which it may do by standing instructions)
designating an account of the Depositary or its nominee at a commercial bank in
the United States to which it wishes payments of interest on the Junior
Subordinated Debentures to be made, the Company shall pay interest on the Junior
Subordinated Debentures by wire transfer of federal (same day) funds to the
account of the Depositary or its nominee in accordance with such wire transfer
instructions.
SECTION 2.4 INTEREST.
(a) From the date of initial issuance to but excluding December 15, 2036
or earlier redemption, as applicable (the "Fixed Rate Period") the Junior
Subordinated Debentures will bear interest at an annual rate equal to 6.40%,
payable semi-annually in arrears on June 15 and December 15 of each year,
commencing on June 15, 2007.
(b) Solely in the event that the Junior Subordinated Debentures are not
repaid or otherwise redeemed on or before the Scheduled Redemption Date, from
and including December 15, 2036 to but excluding December 15, 2066 or earlier
Maturity Date (the "Floating Rate Period"), the Junior Subordinated Debentures
will bear interest at an annual rate equal to Three-Month LIBOR plus a margin
equal to 2.205%, payable quarterly in arrears on March 15, June 15, September 15
and December 15 of each year.
(c) Interest payments shall include accrued interest from and including
the later of the issue date and the last date in respect of which interest has
been paid or duly provided for to, but not including, the next succeeding
Interest Payment Date or the Maturity Date, as the case may be. The amount of
interest payable for any full Interest Payment Period during the Fixed Rate
Period shall be computed on the basis of a 360-day year of twelve 30-day months
and during the Floating Rate Period on the basis of a 360-day year and the
actual number of days elapsed, and the amount of interest payable for any period
shorter than a full Interest Payment Period for which interest is computed will
be computed on the basis of 30-day months and, for periods of less than a 30-day
month, the actual number of days elapsed per 30-day month.
(d) Otherwise than in connection with the maturity or early redemption of
the Junior Subordinated Debentures or the payment in whole or in part of
deferred or overdue interest on the Junior Subordinated Debentures, interest on
the Junior Subordinated Debentures may be paid only on an Interest Payment Date.
Notwithstanding the preceding sentence, in the event that any Interest Payment
Date is not a Business Day, then payment of interest payable on such Interest
Payment Date shall be made, (i) with respect to any Interest Payment Date during
the Fixed Rate Period, on the next succeeding day which is a Business Day
without any interest or other payment in respect of any such delay and (ii) with
respect to any Interest Payment Date during the Floating Rate Period, on the
next succeeding day which is a Business Day, unless such date falls in the next
calendar month, in which case on the immediately preceding day which is a
Business Day, except that if any of the Interest Payment Dates during the
Floating Rate Period falls on a date fixed for redemption or repayment, and such
day is not a Business Day, the interest payment due on that date will be
postponed to the next day that is a Business Day without any interest or other
payment in respect of any such delay in connection with such redemption or
repayment.
16
(e) To the extent permitted by applicable law, interest not paid when due
hereunder, including, without limitation, all Optionally Deferred Interest, will
accrue and compound on each Interest Payment Date at the then applicable
interest rate on the Junior Subordinated Debentures on each Interest Payment
Date until paid. References to the term "interest" in this Indenture shall
include such Compounded Interest.
(f) For so long as the Junior Subordinated Debentures are represented by
one or more Global Securities, interest in respect of each Junior Subordinated
Debenture will be payable, on each Interest Payment Date to the Person in whose
name the Junior Subordinated Debentures are registered at the close of business
on the Business Day next preceding the Interest Payment Date, which shall be the
record date for such Interest Payment Date. In the event the Junior Subordinated
Debentures at any time are not represented solely by one or more Global
Securities, the Company may select (with written notice thereof to be sent to
the Trustee) a different record date, which shall be at least one Business Day
before an Interest Payment Date. Any such interest installment not punctually
paid or duly provided for shall forthwith cease to be payable to the registered
holders of Junior Subordinated Debentures on such record date, and may be paid
to the Person in whose name the Junior Subordinated Debentures (or one or more
Predecessor Securities) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest after the Company has deposited with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such defaulted
interest, notice whereof shall be given to the registered holders of Junior
Subordinated Debentures not less than 10 days prior to such special record date,
or may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Junior Subordinated
Debentures may be listed, and upon such notice as may be required by such
exchange.
ARTICLE 3
REDEMPTION OF THE JUNIOR SUBORDINATED DEBENTURES/SCHEDULED
REDEMPTION
Article III of the Base Indenture shall be superseded in its entirety by
this Article 3 with respect to, and solely for the benefit of the holders of,
the Junior Subordinated Debentures, provided that this Article 3 shall not
become a part of the terms of any other series of Securities.
SECTION 3.1 OPTIONAL REDEMPTION.
(a) The Company shall have the right to redeem the Junior Subordinated
Debentures at its option:
(i) in whole or in part, at any time, on or after December 15, 2031, at a
cash redemption price equal to the Par Redemption Amount; provided that if the
Junior Subordinated Debentures are not redeemed in whole pursuant to this clause
(i), at least $50 million aggregate principal amount of the Junior Subordinated
Debentures (excluding any Junior Subordinated Debentures held by the Company or
any of its Affiliates) must remain outstanding after giving effect to such
redemption;
17
(ii) in whole or in part, at any time prior to December 15, 2031, in cases
not involving a Tax Event or Rating Agency Event, at a cash redemption price
equal to the greater of (x) the Par Redemption Amount and (y) the Make-Whole
Redemption Amount; provided that if the Junior Subordinated Debentures are not
redeemed in whole pursuant to this clause (ii), at least $50 million aggregate
principal amount of the Junior Subordinated Debentures (excluding any Junior
Subordinated Debentures held by the Company or any of its Affiliates) must
remain outstanding after giving effect to such redemption; and
(iii) in whole, but not in part, at any time prior to December 15, 2031,
within 180 days after the occurrence of a Tax Event or a Rating Agency Event, at
a cash redemption price equal to the greater of (x) the Par Redemption Amount
and (y) the Special Event Make-Whole Redemption Amount.
(b) With respect to any redemption of Junior Subordinated Debentures as a
result of a Tax Event or a Rating Agency Event, the date fixed for such
redemption will be within 180 days following the occurrence of such Tax Event or
Rating Agency Event, as applicable; provided, however, that if at that time the
Company is able to eliminate, within the 180-day period, the Tax Event or the
Rating Agency Event by taking some ministerial action (such as making an
election or filing a form) that has no adverse effect on the Company or the
holders of the Junior Subordinated Debentures, the Company shall pursue such
action in lieu of redemption. The Company will have no right or obligation to
redeem the Junior Subordinated Debentures while pursuing such measure.
SECTION 3.2 SCHEDULED REDEMPTION.
(a) Subject to the limitations contained in this Section 3.2, the Company
shall repay the principal amount of the Junior Subordinated Debentures, together
with accrued and unpaid interest, on December 15, 2036 (the "Scheduled
Redemption Date");
(b) The Company shall repay the Junior Subordinated Debentures on the
Scheduled Redemption Date only to the extent that the Company has raised
sufficient net proceeds during the applicable QCS Proceeds Collection Period
from the issuance of Qualifying Capital Securities;
(c) The Company will use QCS Commercially Reasonable Efforts, subject to
the Company's right to otherwise redeem the Junior Subordinated Debentures
pursuant to Section 3.1(a) hereof, to raise sufficient net proceeds during the
applicable QCS Proceeds Collection Period from the issuance of Qualifying
Capital Securities to permit repayment of the Junior Subordinated Debentures in
full on the Scheduled Redemption Date. If the Company has not raised sufficient
net proceeds during the applicable QCS Proceeds Collection Period to permit
repayment of all principal and accrued and unpaid interest, including any
Compounded Interest, on the Junior Subordinated Debentures on the Scheduled
Redemption Date, the Company shall continue to use QCS Commercially Reasonable
Efforts, subject to the Company's right to otherwise redeem the Junior
Subordinated Debentures pursuant to Section 3.1(a) hereof, to raise sufficient
net proceeds during the applicable QCS Proceeds Collection Period from the
issuance of Qualifying Capital Securities to permit repayment of the Junior
18
Subordinated Debentures on the next Interest Payment Date, and on each Interest
Payment Date thereafter, until the Junior Subordinated Debentures are paid in
full;
(d) The Company shall not be required to redeem the Junior Subordinated
Debentures on the Scheduled Redemption Date or any Interest Payment Date
following the Scheduled Redemption Date (and prior to the Final Maturity Date),
as the case may be (each a "Required Repayment Date"), to the extent it provides
written certification to the Trustee (which the Trustee will promptly forward
upon receipt to each holder of record of Junior Subordinated Debentures) not
less than 15 and no more than 30 days prior to such Required Repayment Date (the
"Notice Date") certifying that either:
(1) a Market Disruption Event was existing and continued during
the entire applicable QCS Proceeds Collection Period, or
(2) the Company was unable after using QCS Commercially Reasonable
Efforts to raise sufficient net proceeds during the applicable
QCS Proceeds Collection Period to permit repayment of the
Junior Subordinated Debentures in full on the applicable
Required Repayment Date;
(e) Net proceeds from the sale of Qualifying Capital Securities received
during the applicable QCS Proceeds Collection Period that the Company is
permitted to apply to the repayment of Junior Subordinated Debentures on or
after the Scheduled Redemption Date will be applied:
(1) first, to pay interest on the Junior Subordinated Debentures
that the Company is not paying from other sources (other than
interest required to be paid pursuant to the Alternative
Payment Mechanism) and,
(2) second, to repay the principal of Junior Subordinated
Debentures; provided that if the Company raises less than $5
million of net proceeds from the sale of Qualifying Capital
Securities during the applicable QCS Proceeds Collection
Period, it will not be required to repay any Junior
Subordinated Debentures on the Scheduled Redemption Date or
the applicable Required Payment Date, but will use those net
proceeds to repay the Junior Subordinated Debentures on the
next Required Payment Date as of which it has raised at least
$5 million of net proceeds;
(f) If, as of any Required Payment Date, the Company is obligated to use
QCS Commercially Reasonable Efforts to sell Qualifying Capital Securities and
apply the net proceeds to payments of principal of or interest on any
outstanding Parity Debt Securities in addition to the Junior Subordinated
Debentures, then on any date and for any period the amount of net proceeds
received by the Company from those sales and available for such payments shall
be applied to the Junior Subordinated
19
Debentures and such Parity Debt Securities having the same scheduled repayment
date or scheduled redemption date as the Junior Subordinated Debentures pro rata
in accordance with their respective outstanding principal amounts and none of
such net proceeds shall be applied to any other securities having a later
scheduled repayment date or scheduled redemption date until the principal of and
all accrued and unpaid interest on the Junior Subordinated Debentures has been
paid in full;
(g) The Company shall not, without written notice to the Trustee and the
consent of a majority in principal amount of the Junior Subordinated Debentures,
amend the RCC to impose additional restrictions on the type or amount of
Qualifying Capital Securities that the Company may include for purposes of
determining when repayment, redemption or repurchase of the Junior Subordinated
Debentures is permitted; and
(h) The Replacement Capital Obligation shall continue to apply until (i)
the Company has redeemed the Junior Subordinated Debentures in full in
accordance with the Replacement Capital Obligation, (ii) the Junior Subordinated
Debentures are otherwise paid in full on the Final Maturity Date, or (iii) upon
the occurrence of an Event of Default resulting in acceleration of the Junior
Subordinated Debentures.
SECTION 3.3 REDEMPTION PROCEDURE FOR JUNIOR SUBORDINATED DEBENTURES.
The Company shall mail, or cause the Trustee to mail, notice of every
redemption of Junior Subordinated Debentures by first class mail, postage
prepaid, addressed to the holders of record of the Junior Subordinated
Debentures to be redeemed at such holders' respective last addresses appearing
on the Security Register. Any redemption pursuant to this Article 3 shall be
made upon no less than 15 and no more than 30 days' notice before the date fixed
for redemption to the registered holders of the Junior Subordinated Debentures.
If the Junior Subordinated Debentures are to be redeemed in part pursuant to
Section 3.1 or 3.2 hereof, (a) the Company shall give the Trustee no less than
15 and no more than 30 days' notice in advance of the date fixed for redemption
and (b) the Junior Subordinated Debentures shall be redeemed pro rata or by lot
or by any other method utilized by the Trustee that the Trustee shall deem fair
and appropriate in its discretion. Any notice mailed as provided in this Section
3.3 shall be conclusively presumed to have been duly given, whether or not the
holder of the Junior Subordinated Debentures receives such notice, but failure
duly to give such notice by mail, or any defect in such notice or in the mailing
thereof, to any holder of the Junior Subordinated Debentures designated for
redemption shall not affect the validity of the proceedings for the redemption
of any other Junior Subordinated Debentures. Each such notice given to such a
holder shall state: (i) the Redemption Date; (ii) the redemption price; (iii)
that the Junior Subordinated Debentures are being redeemed pursuant to the
Indenture or the terms of the Junior Subordinated Debentures together with the
facts permitting such redemption; (iv) if less than all Outstanding Junior
Subordinated Debentures are to be redeemed, the identification (and, in the case
of partial redemption, the principal amounts) of the particular Junior
Subordinated Debentures to be redeemed; (v) the place or places where the Junior
Subordinated Debentures are to be redeemed; and (vi) that interest on the Junior
Subordinated Debentures to be redeemed will cease to accrue on the Redemption
Date. Notwithstanding the foregoing, if the Junior Subordinated Debentures are
issued in book-entry form through The Depository Trust Company or any other
similar facility, notice of redemption may be given to the holders of Junior
Subordinated Debentures at such time and in any manner permitted by such
facility. The redemption price shall be paid prior to 12:00 noon, New York City
time, on the date of such
20
redemption or at such earlier time on such date as the Company determines and
specifies in the notice of redemption. The Company shall deposit with the
Trustee or with a Paying Agent an amount of money sufficient to pay the
redemption price of such Junior Subordinated Debentures or any portion thereof
which are to be redeemed on Redemption Date.
SECTION 3.4 PAYMENT OF SECURITIES CALLED FOR REDEMPTION.
If any notice of redemption has been given as provided in Section 3.3
hereof, the Junior Subordinated Debentures or portion of the Junior Subordinated
Debentures with respect to which such notice has been given shall become due and
payable on the date and at the place or places stated in such notice at the
applicable redemption price. From and after such date, the Junior Subordinated
Debentures to be redeemed shall cease to bear interest. If any Junior
Subordinated Debentures called for redemption shall not be so paid upon
surrender thereof for redemption, the redemption price shall, until paid, bear
interest from the date set for redemption until the date redemption actually
occurs at the then applicable interest rate on the Junior Subordinated
Debentures. On presentation and surrender of certificates representing such
Junior Subordinated Debentures at a place of payment in said notice specified,
the said Junior Subordinated Debentures or the specified portions thereof shall
be paid and redeemed by the Company at the applicable redemption price. Upon
presentation of certificates representing Junior Subordinated Debentures to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and deliver to the holder thereof, at the expense of the Company, a
new certificate or certificates representing Junior Subordinated Debentures, of
authorized denominations, in aggregate principal amount equal to the unredeemed
portion of the Junior Subordinated Debentures represented by the certificate(s)
so presented and having the same original issue date, Final Maturity Date and
terms. If a Global Security is so surrendered, such new Junior Subordinated
Debentures will also be a new Global Security.
SECTION 3.5 NO SINKING FUND.
The Junior Subordinated Debentures shall not be entitled to the benefit of
any sinking fund.
ARTICLE 4
OPTIONAL DEFERRAL OF INTEREST AND TRIGGER EVENTS
SECTION 4.1 OPTIONAL DEFERRAL OF INTEREST.
So long as (i) no Event of Default has occurred and is continuing and (ii)
no Trigger Event has occurred and the related Trigger Period is continuing, the
Company may elect to defer one or more payments of interest on such Junior
Subordinated Debentures (an "Optional Deferral" and any such deferred interest,
"Optionally Deferred Interest") at any time during the term of the Junior
Subordinated Debentures, and from time to time, for up to ten years (which may
include a combination of semi-annual and quarterly Interest Payment Periods)
without giving rise to an Event of Default and acceleration under the terms of
the Indenture, provided, however, that (notwithstanding anything to the contrary
herein) the Company may not defer any payment of interest past the Maturity Date
and no Optional Deferral Period (as defined below) may end on a date other than
on an Interest Payment Date. During any Optional Deferral and for
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so long as any Optionally Deferred Interest remains outstanding (an "Optional
Deferral Period"), the Company may pay Optionally Deferred Interest that was
deferred through the Fifth Deferral Anniversary out of any source of funds.
Optionally Deferred Interest will continue to accrue and compound on each
Interest Payment Date, to the extent permitted by applicable law, at the then
applicable interest rate on the Junior Subordinated Debentures. If Optional
Deferral has continued beyond the Fifth Deferral Anniversary, then the
provisions of Section 6.2 hereof will apply, and the Company (except on the
Final Maturity Date or upon an acceleration of the Junior Subordinated
Debentures following an Event of Default (an "Acceleration Date") with respect
to the Junior Subordinated Debentures) must make Commercially Reasonable Efforts
to sell Common Stock (unless such interest has been (or is being) paid from the
proceeds of Qualifying Warrants) to satisfy its obligation to pay Optionally
Deferred Interest on the Junior Subordinated Debentures and may pay such
Optionally Deferred Interest only out of the net proceeds from the sale of
Qualifying APM Securities. Additionally, during any Optional Deferral Period,
the restrictions on payment by the Company of dividends and other distributions
on capital stock pursuant to Section 6.1 hereof will apply. Subject to the
proviso in the first sentence of this Section 4.1, there is no limit on the
number of Optional Deferral Periods that the Company may begin.
SECTION 4.2 NOTICES OF DEFERRAL AND TRIGGER PERIOD.
(a) The Company shall provide a written notice of any Optional Deferral to
the Trustee and the holders of the Junior Subordinated Debentures no more than
30 and no fewer than 15 days prior to the relevant Interest Payment Date.
Subject to Section 4.2(b) hereof, a notice of Optional Deferral, once given,
shall be irrevocable and the deferral of payments on the related Interest
Payment Date shall be considered an Optional Deferral, unless a Trigger Event
has occurred as of the 30th day prior to such Interest Payment Date.
(b) Not earlier than the 30th nor later than the 15th day prior to each
Interest Payment Date during a Trigger Period, the Company shall give written
notice of the continuance of such Trigger Period to the Trustee and holders of
the Junior Subordinated Debentures. Such notice shall, depending on which
condition is relied upon in determining that a Trigger Event has occurred, set
forth either (x) the Covered Insurance Subsidiaries' Risk-Based Capital Ratio or
(y) the Trailing Four Quarters Consolidated Net Income Amount and the Adjusted
Stockholders' Equity Amount, as applicable, and the extent to which these
amounts must increase in order for payments of interest from sources other than
the Alternative Payment Mechanism to resume.
SECTION 4.3 TRIGGER EVENTS.
(a) (i) If and to the extent that a Trigger Event has occurred and the
Trigger Period caused thereby is continuing as of the 30th day prior to an
Interest Payment Date, and regardless of any notice of Optional Deferral that
has been previously delivered, the Company may pay interest on the Junior
Subordinated Debentures (other than any interest that had accrued during an
Optional Deferral Period through the Fifth Deferral Anniversary thereof and
prior to the occurrence of a Trigger Event which may continue to be deferred to
the extent provided herein or be paid out of any source of funds) only to the
extent that such interest is paid through the Alternative Payment Mechanism. Any
interest that is accrued and unpaid during a Trigger
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Period will continue to accrue and compound on each Interest Payment Date, to
the extent permitted by applicable law, at the then applicable interest rate on
the Junior Subordinated Debentures.
(ii) If a Trigger Event occurs after commencement of an Optional
Deferral Period, the Optional Deferral Period shall be deemed suspended for as
long as the related Trigger Period is continuing. Once the Trigger Period is no
longer continuing, the Optional Deferral Period shall resume subject to the
limitations and consequences described herein, and any accrued time during the
Optional Deferral Period prior to such suspension shall be counted toward the
five year limitation set forth in Section 6.2 hereof.
(b) In the event that a Trigger Period is no longer continuing and at the
termination of the Trigger Period there is no unpaid interest from an Optional
Deferral Period that had continued beyond the Fifth Deferral Anniversary, the
Company may pay subsequent interest in cash from any source of funds. However,
any unpaid interest that accrued during the continuance of a Trigger Period or
an Optional Deferral Period that continued beyond the Fifth Deferral Anniversary
may only be satisfied in accordance with the provisions of the Alternative
Payment Mechanism, except that on the Final Maturity Date and on the
Acceleration Date of the Junior Subordinated Debentures, the Company may pay any
accrued and unpaid interest without regard to the source of funds. Any accrued
and unpaid interest will in all events be due and payable upon the Maturity Date
or redemption of the Junior Subordinated Debentures, except for Foregone
Interest (if any).
ARTICLE 5
EVENTS OF DEFAULT
SECTION 5.1 EVENTS OF DEFAULT.
(a) The term "Event of Default," in the Indenture shall mean with respect
to the Junior Subordinated Debentures only, the occurrence and continuation of
any one or more of the following events and shall not have any other meanings
ascribed to such term in the Base Indenture or any other indenture supplementing
the Indenture:
(i) default in the payment of the principal of, or premium, if any, on
the Junior Subordinated Debentures when due;
(ii) the failure to pay interest (including Compounded Interest) in full,
whether due to an Optional Deferral, during a Trigger Period or
otherwise, after the conclusion of a period of 10 consecutive years
following the commencement of any Optional Deferral Period or
Trigger Period or on the Final Maturity Date;
(iii) the entry by a court of competent jurisdiction of:
(1) a decree or order for relief in respect of the Company in an
involuntary proceeding under any applicable Bankruptcy Law and
such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days;
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(2) a decree or order adjudging the Company to be insolvent, or
approving a petition seeking reorganization, arrangement,
adjustment or composition of the Company and such decree or
order shall remain unstayed and in effect for a period of 60
consecutive days; or
(3) a final and non-appealable order appointing a Custodian of the
Company or of any substantial part of the property of the
Company or ordering the winding up or liquidation of the
affairs of the Company; or
(iv) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding; (B) consents to the
entry of an order for relief against it in an involuntary case or
proceeding; (C) files a petition or answer or consent seeking
reorganization or relief or consents to such filing or to the
appointment of or taking possession by a Custodian of it or for all
or substantially all of its property, and such Custodian is not
discharged within 60 days; (D) makes a general assignment for the
benefit of its creditors; or (E) admits in writing its inability to
pay its debts generally as they become due.
(b) For the avoidance of doubt, (i) Events of Default with respect to the
Junior Subordinated Debentures do not include failure to comply with or breach
of the Company's other covenants set forth in Article 6 hereof with respect to
the Junior Subordinated Debentures (each, an "Other Covenant Default"),
including the covenant to sell Common Stock pursuant to the Alternative Payment
Mechanism to meet certain interest payment obligations and (ii) the occurrence
and continuation of the events described in Section 5.1(a)(i) or (ii) shall
constitute an Event of Default, even if any such event has occurred and is
continuing because of the provisions of Section 7 hereof.
(c) Holders of Junior Subordinated Debentures may not themselves institute
a proceeding against the Company on account of an Other Covenant Default unless,
among other things, the Trustee fails to institute such a proceeding, subject to
the terms hereof. However, the holders of a majority in principal amount of
Junior Subordinated Debentures may direct the Trustee to bring such a proceeding
if an Other Covenant Default continues for a period of 90 days after delivery of
written notice to the Company from the Trustee or to the Company and the Trustee
from the holders of a majority in principal amount of the Junior Subordinated
Debentures (each, an "Other Covenant Default Notice"), subject to the terms
hereof. The Trustee shall not be required to take any action in case of an Other
Covenant Default (other than to give notice of such default to the holders of
the Junior Subordinated Debentures) unless so directed by the holders.
(d) Subject to the provisions of Section 5.1(c) hereof as to Other
Covenant Defaults, the provisions of Section 6.04 of the Base Indenture shall
apply with respect to limitations on suits, proceedings and remedies.
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(e) Within 90 days after an Event of Default, the Trustee shall give to
the holders of Junior Subordinated Debentures notice of all uncured and unwaived
defaults by the Company known to it; provided, however, that the failure of the
Trustee to give such notice shall not be deemed to be a breach by the Trustee
hereunder. However, except in the case of default in payment of interest, the
Trustee may withhold such notice if it determines that such withholding is in
the interest of such holders.
ARTICLE 6
COVENANTS
Article IV of the Base Indenture is hereby supplemented with respect to,
and solely for the benefit of the holders of the Junior Subordinated Debentures
by, the following additional covenants of the Company; provided that the Junior
Subordinated Debentures shall also benefit from the other covenants in Article
IV of the Base Indenture:
SECTION 6.1 CERTAIN RESTRICTIONS DURING OPTIONAL DEFERRAL PERIODS OR FOLLOWING A
TRIGGER EVENT.
On any date on which accrued interest through the most recent Interest
Payment Date has not been paid in full, whether because of an Optional Deferral
or a Trigger Event, the Company, subject to certain exceptions set forth below
will not, and will not permit any of its Subsidiaries to:
(a) declare or pay any dividends on, make any distribution with respect
to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any shares of its capital stock, other than:
(i) any purchase, redemption or other acquisition of shares of capital
stock of the Company in connection with (x) any employment contract,
employee or benefit plan or other similar arrangement, (y) a
dividend reinvestment or stockholder purchase plan, or (z) the
issuance of capital stock of the Company, or securities convertible
into or exercisable for such capital stock, as consideration in an
acquisition transaction entered into prior to the applicable
Optional Deferral or Trigger Event, as the case may be;
(ii) any exchange, redemption or conversion of any class or series of
capital stock of the Company, or the capital stock of one of the
Company's Subsidiaries, for any other class or series of capital
stock of the Company, or of any class or series of the Company's
indebtedness for any class or series of capital stock of the
Company;
(iii) any purchase of, or payment of cash in lieu of, fractional interests
in shares of capital stock of the Company pursuant to the conversion
or exchange provisions of such capital stock or the securities being
converted or exchanged;
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(iv) any declaration of a dividend in connection with any rights plan, or
the issuance of rights, stock or other property under any rights
plan, or the redemption or repurchase of rights pursuant thereto; or
(v) any dividend in the form of stock, warrants, options or other rights
where the dividend stock or stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which
the dividend is being paid or ranks equal with or junior to such
stock;
(b) make any payment of principal, premium, if any, or interest on, or
repay, repurchase or redeem, any debt securities issued by the Company that rank
equally with or junior to the Junior Subordinated Debentures, other than any
payment, repurchase or redemption in respect of debt securities that rank
equally with the Junior Subordinated Debentures ("Parity Debt Securities") made
ratably and in proportion to the respective amount of (1) accrued and unpaid
amounts on such Parity Debt Securities, on the one hand, and (2) accrued and
unpaid amounts on the Junior Subordinated Debentures, on the other hand; or
(c) make any guarantee payments with respect to Parity Debt Securities, if
such guarantee ranks equally with or junior to the Junior Subordinated
Debentures, other than any payment in respect of guarantees that rank equally
with the Junior Subordinated Debentures ("Parity Guarantees" and, together with
the Parity Debt Securities, the "Parity Securities") made ratably and in
proportion to the respective amount of (1) accrued and unpaid amounts on such
Parity Guarantees, on the one hand, and (2) accrued and unpaid amounts on the
Junior Subordinated Debentures, on the other hand; it being understood, for the
avoidance of doubt, that the Company shall be permitted to make any guarantee
payments pursuant to its
(1) Guarantee Agreement, dated as of June 21, 2005, with respect
to the 4.82% trust preferred securities issued by MetLife
Capital Trust II;
(2) Guarantee Agreement, dated as of June 21, 2005, with respect
to the 4.91% trust preferred securities issued by MetLife
Capital Trust III;
(3) Common Securities Guarantee Agreement, dated as of June 21,
2005, with respect to the common securities issued by MetLife
Capital Trust II; and
(4) Common Securities Guarantee Agreement, dated as of June 21,
2005, with respect to the common securities issued by MetLife
Capital Trust III.
The restrictions contained in this Section 6.1 shall not apply to:
(1) any payment of current interest in respect of Parity
Securities that is made pro rata to the amounts due on such
Parity Securities (including the Junior Subordinated
Debentures) and any payments of deferred interest on Parity
Securities that, if not made, would
26
cause the Company to breach the terms of the instrument
governing such Parity Securities; provided that such payments
are made in accordance with Section 6.2(f) to the extent it
applies;
(2) any payment of principal in respect of Parity Securities
having the same scheduled redemption date as the Junior
Subordinated Debentures, as required under a provision of such
Parity Securities that is substantially the same as the
provision of Section 3.2 hereof and that is made on a pro rata
basis among one or more series of Parity Securities having
such a provision and the Junior Subordinated Debentures; or
(3) any purchase or acquisition of the Company's Capital Stock by
any of the Company's separate accounts.
SECTION 6.2 OBLIGATION TO EFFECT CERTAIN SALES OF COMMON STOCK OF THE COMPANY;
ALTERNATIVE PAYMENT MECHANISM.
(a) Subject to certain conditions and exceptions described below:
(1) if the Company has optionally deferred payment of interest
otherwise due on the Junior Subordinated Debentures for a
period of more than five consecutive years (excluding any time
an Optional Deferral Period is suspended pursuant to Section
4.3 hereof)(the last day of such five-year period, the "Fifth
Deferral Anniversary"), or
(2) if a Trigger Event has occurred and the related Trigger Period
is continuing on an Interest Payment Date (regardless of
whether a notice of an Optional Deferral has been delivered),
then: (i) the Company may satisfy its obligation to pay interest on the Junior
Subordinated Debentures (A) in the case of an event described in clause (1)
above, on any subsequent Interest Payment Date and (B) in the case of an event
described in clause (2) above, on such Interest Payment Date (in each case,
other than any interest that has accrued during an Optional Deferral Period
prior to Fifth Deferral Anniversary thereof and prior to the occurrence of a
Trigger Event, which may continue to be deferred to the extent provided herein
or be paid out of any source of funds and except that on the Final Maturity Date
and on the Acceleration Date of the Junior Subordinated Debentures, the Company
may pay interest without regard to the source of funds), only to the extent of
net proceeds from the sale of Qualifying APM Securities received by the Company
during the 180 days prior to such Interest Payment Date (the "Alternative
Payment Mechanism"); and (ii) the Company must make Commercially Reasonable
Efforts to sell Common Stock, the sale of which will provide sufficient cash
proceeds to pay any amount due to the holders of the Junior Subordinated
Debentures in satisfaction of all accrued and unpaid interest, together with any
Compounded Interest, to the extent permitted by law (unless such interest has
been paid (or is being paid) from the sale of Qualifying Warrants). Such
obligation will continue until all unpaid interest has been paid in full or, if
such obligation has arisen only
27
because a Trigger Event has occurred and the related Trigger Period is
continuing, until such Trigger Period is no longer continuing. The Company's
obligation to make Commercially Reasonable Efforts to sell Common Stock to
satisfy its obligation to pay interest (x) does not apply to interest that has
accrued during an Optional Deferral Period through the Fifth Deferral
Anniversary, and (y) does not apply on the Final Maturity Date and on the
Acceleration Date of the Junior Subordinated Debentures. Any accrued and unpaid
interest will, in all events be due and payable on the Maturity Date, except for
Forgone Interest to the extent provided for in Article 11 hereof.
(b) The net proceeds received by the Company from the sale of Qualifying
APM Securities (i) during the 180 days prior to any Interest Payment Date on
which the Company is required to use the Alternative Payment Mechanism and (ii)
designated by the Company at or before the time of such sale as available to pay
interest on the Junior Subordinated Debentures will, at the time such proceeds
are delivered to the Trustee to satisfy the relevant interest payment, be deemed
to satisfy the Company's obligations to pay interest on the Junior Subordinated
Debentures pursuant to the Alternative Payment Mechanism.
(c) The Company shall use commercially reasonable efforts to seek
shareholder consent to increase the number of its authorized shares of Common
Stock if, at any date, its Shares Available for Issuance fall below the greater
of:
(x) 250 million shares (as adjusted for any stock split, stock
dividend, reclassification, recapitalization, split-up,
combination, exchange of shares or similar transaction since
the date of this Third Supplemental Indenture), and
(y) three times the number of shares that the Company would need
to issue to raise sufficient proceeds to pay (assuming a price
per share equal to the average trading price of its shares
over the 10-trading-day period preceding such date) then
outstanding deferred interest on the Junior Subordinated
Debentures (including Compounded Interest), plus twelve
additional months of interest (including Compounded Interest)
on the Junior Subordinated Debentures, up to a total of ten
years of interest (including Compounded Interest). For
purposes of determining the amounts accruing during a Floating
Rate Period, interest will be computed by reference to spot
Three-Month LIBOR on such calculation date plus a margin equal
to 2.205%.
An "Other Covenant Default" (as defined in Section 5.1(b) hereof) shall have
occurred (but no Event of Default shall have occurred) if the Company does not
use its commercially reasonable efforts to seek consent of its stockholders to
increase the number of its authorized shares if, at any date, its Shares
Available for Issuance fall below the number specified above.
(d) Following the Fifth Deferral Anniversary or the occurrence of a
Trigger Event, the Company shall apply the net proceeds received by it from
sales of shares of its Common Stock pursuant to this Section 6.2 to the payment
of interest on the Junior Subordinated
28
Debentures then Outstanding, with net proceeds to be paid promptly after receipt
until all interest amounts owing have been paid in full.
(e) In the event that net proceeds received by the Company from one or
more sales of shares of its Common Stock following such Fifth Deferral
Anniversary or the occurrence of a Trigger Event are not sufficient to satisfy
the full interest amount, such net proceeds will be paid to the holders of the
Junior Subordinated Debentures on a pro rata basis.
(f) Any interest payment made pursuant to the provisions of this Section
6.2 will first be allocated to payment of the interest due on the Interest
Payment Date for the then current Interest Payment Period. Any payment of
interest in excess of the amount of the interest due on that Interest Payment
Date will be applied first against any then existing accrued and unpaid interest
with respect to prior Interest Payment Periods for which interest must be paid
pursuant to the Alternative Payment Mechanism, in chronological order beginning
with the earliest Interest Payment Period for which interest has not been paid
in full and for which interest must be paid pursuant to the Alternative Payment
Mechanism, including Compounded Interest. If the Company has Outstanding at such
time any debt securities ranking pari passu with the Junior Subordinated
Debentures under the terms of which the Company is obligated to sell Common
Stock and apply the net proceeds to payment of deferred interest on such pari
passu securities and the Company at such time is required to apply such proceeds
to pay deferred interest on such pari passu securities, then on any date and for
any period the amount of net proceeds received by the Company from such sales
and available for payment of such deferred interest shall be applied to the
Junior Subordinated Debentures and such pari passu securities on a pro rata
basis, or on such other basis as any regulatory authority may direct (taking
into account the availability of proceeds of preferred shares or other
securities to settle deferred interest under any such other pari passu
securities). Notwithstanding the foregoing, a partial payment will be applied
(i) only to Optionally Deferred Interest to the extent that the source of such
partial payment is other than proceeds of Qualifying APM Securities, and (ii)
first to interest that is unpaid during a Trigger Period and second to
Optionally Deferred Interest, to the extent that the source of such partial
payment is the sale of Qualifying APM Securities.
(g) If the Company elects to satisfy its obligation to pay deferred
interest pursuant to the Alternative Payment Mechanism by issuing Qualifying
Warrants, it will only do so if the total number of shares of Common Stock
underlying such Qualifying Warrants applied to pay interest on the Junior
Subordinated Debentures pursuant to the Alternative Payment Mechanism, together
with the total number of shares of Common Stock underlying all prior issuances
of Qualifying Warrants so applied, does not exceed an amount equal to 15% of the
total number of the Company's issued and outstanding shares of Common Stock as
of the date of any proposed issuance.
SECTION 6.3 PAYMENT OF EXPENSES.
The Company, as issuer of the Junior Subordinated Debentures, shall pay or
caused to be paid all costs and expenses relating to the offering, sale and
issuance thereof, including compensation of the Trustee under the Indenture in
accordance with the provisions of Section 7.06 of the Base Indenture.
SECTION 6.4 PAYMENT UPON RESIGNATION OR REMOVAL.
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Upon termination of this Third Supplemental Indenture or the Base
Indenture or the removal or resignation of the Trustee, the Company shall pay to
the Trustee all amounts accrued to the date of such termination, removal or
resignation. ARTICLE 7 SUBORDINATION
Article XV of the Base Indenture shall be superseded in its entirety by
this Article 7 with respect to, and solely for the benefit of, the holders of
the Junior Subordinated Debentures; provided, that this Article 7 shall not
become a part of the terms of any other series of Securities.
SECTION 7.1 AGREEMENT TO SUBORDINATE.
The Company agrees, and each holder by accepting any Junior Subordinated
Debentures agrees, that the indebtedness evidenced by the Junior Subordinated
Debentures is subordinated in right of payment, to the extent and in the manner
provided in this Article 7, to the prior payment in full of all Senior
Indebtedness, and that the subordination is for the benefit of, and shall be
enforceable directly by, the holders of Senior Indebtedness, without any act or
notice of acceptance hereof or reliance hereon.
SECTION 7.2 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
In the event of:
(a) any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to the Company,
its creditors or its property;
(b) any proceeding for the liquidation, dissolution or other winding up of
the Company, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings;
(c) any general assignment by the Company for the benefit of creditors; or
(d) any other marshalling of the assets of the Company,
all Senior Indebtedness (including, without limitation, interest accruing after
the commencement of any such proceeding, assignment or marshalling of assets)
shall first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made by the Company on account of the
Junior Subordinated Debentures. In any such event, any payment or distribution,
whether in cash, securities or other property, which would otherwise (but for
the provisions of this Article 7) be payable or deliverable in respect of the
Junior Subordinated Debentures (including any such payment or distribution which
may be payable or deliverable by reason of the payment of any other indebtedness
of the Company being subordinated to the payment of the Securities) shall
generally be paid to the holders of Senior Indebtedness, or to their
representatives, in accordance with the priorities then existing among such
holders until all Senior Indebtedness shall have been paid in full. Payments on
the Junior Subordinated Debentures in the form of other securities of the
Company or those of any other
30
corporation provided for by a plan of reorganization or a readjustment, the
payment of which is subordinate, at least to the extent provided in the
subordination provisions of this Third Supplemental Indenture with respect to
the indebtedness evidenced by the Junior Subordinated Debentures, to the payment
of all Senior Indebtedness at the time outstanding and to any securities issued
in respect of such Senior Indebtedness under any such plan of reorganization or
readjustment, shall be paid or delivered directly to the holders of Senior
Indebtedness and then, if any amounts remain, to the holders of Junior
Subordinated Debentures. No present or future holder of any Senior Indebtedness
will be prejudiced in the right to enforce the subordination of the Junior
Subordinated Debentures by any act or failure to act on the part of the Company.
SECTION 7.3 DEFAULT ON SENIOR INDEBTEDNESS.
No direct or indirect payment, in cash, property or securities, by set-off
or otherwise, may be made or agreed to be made on account of the Junior
Subordinated Debentures including in respect of any repayment, redemption,
retirement, purchase or other acquisition of the Junior Subordinated Debentures,
if: (i) the Company defaults in the payment of any principal, or premium, if
any, or interest on any Senior Indebtedness, whether at maturity or at a date
fixed for prepayment or declaration or otherwise; or (ii) an event of default
occurs with respect to any Senior Indebtedness permitting the holders thereof to
accelerate the maturity and written notice of such event of default, requesting
that payments on the Junior Subordinated Debentures cease, is given to the
Company by any holder of Senior Indebtedness, unless and until such event of
default has been cured or waived or ceases to exist.
SECTION 7.4 WHEN DISTRIBUTION MUST BE PAID OVER.
Subject to Section 8.1 hereof, if a distribution is made to the Trustee or
any holder of Junior Subordinated Debentures at a time when a Responsible
Officer of the Trustee or such holder has actual knowledge that, because of this
Article 7 such distribution should not have been made to it, the Trustee or such
holder who receives the distribution shall hold it in trust for the benefit of,
and, upon written request, shall pay it over to, the holders of Senior
Indebtedness as their interests may appear, or their agents or representatives,
for application to the payment of all principal, premium, if any, and interest
then payable with respect to any Senior Indebtedness.
SECTION 7.5 SUBROGATION.
Senior Indebtedness shall not be deemed to have been paid in full unless
the holders thereof shall have received cash, securities or other property equal
to the amount of such Senior Indebtedness then Outstanding. After payment in
full of all Senior Indebtedness, holders of the Junior Subordinated Debentures
will be subrogated to the rights of any holders of Senior Indebtedness to
receive any further payments that are applicable to the Senior Indebtedness
until all the Junior Subordinated Debentures are paid in full. In matters
between holders of the Junior Subordinated Debentures and any other type of the
Company's creditors, any payments that would otherwise be paid to holders of
Senior Indebtedness and that are made to holders of the Junior Subordinated
Debentures because of this subrogation will be deemed a payment by the Company
on account of Senior Indebtedness and not on account of the Junior Subordinated
Debentures.
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SECTION 7.6 RELATIVE RIGHTS.
This Article 7 defines the relative rights of holders of the Junior
Subordinated Debentures and holders of Senior Indebtedness. Unless otherwise
specified in Article 11 hereof, nothing in this Indenture shall:
(a) impair, as between the Company and holders of Junior Subordinated
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay principal of and interest on the Junior Subordinated Debentures in
accordance with their terms;
(b) affect the relative rights of holders of Junior Subordinated
Debentures other than their rights in relation to holders of Senior
Indebtedness; or
(c) prevent the Trustee or any holder of Junior Subordinated Debentures
from exercising its available remedies upon a Default, an Other Covenant Default
or Event of Default, subject to the rights of holders and beneficial owners of
Senior Indebtedness to receive distributions and payments otherwise payable to
holders of Junior Subordinated Debentures.
SECTION 7.7 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 7, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and
the Trustee shall not be liable to any holder of such Senior Indebtedness
(except with respect to holders of any Senior Indebtedness for which the Trustee
is acting as trustee under the Base Indenture or otherwise) if it shall pay over
or deliver to holders of Junior Subordinated Debentures, the Company or any
other Person money or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article 7 or otherwise.
SECTION 7.8 SUBORDINATION MAY NOT BE IMPAIRED.
No present or future holder of any Senior Indebtedness shall be prejudiced
in the right to enforce subordination of the indebtedness constituting the
Securities by any act or failure to act on the part of the Company.
SECTION 7.9 DISTRIBUTION.
Upon any payment or distribution of assets of the Company referred to in
this Article 7, the Trustee and the holders of Junior Subordinated Debentures
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the holders
of Junior Subordinated Debentures for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 7.
32
SECTION 7.10 AUTHORIZATION TO EFFECT SUBORDINATION.
Each holder of Junior Subordinated Debentures by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 7, and appoints the Trustee his attorney-in-fact for any and all such
purposes.
ARTICLE 8
NOTICE
SECTION 8.1 NOTICE BY THE COMPANY.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Junior Subordinated
Debentures pursuant to the provisions of Article 7 hereof; provided that failure
to give such notice shall not affect the subordination of the Junior
Subordinated Debentures to the Senior Indebtedness as provided in Article 7
hereof. Notwithstanding any of the provisions of the Base Indenture and this
Third Supplemental Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Junior Subordinated Debentures
pursuant to the provisions of the Base Indenture; provided, however, that if the
Trustee shall not have received the notice provided for in this Article 8 at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of (or premium, if any) or interest on any Junior
Subordinated Debentures), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.
ARTICLE 9
FORM OF JUNIOR SUBORDINATED DEBENTURE
SECTION 9.1 FORM OF JUNIOR SUBORDINATED DEBENTURE.
The Junior Subordinated Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[If the Debenture is to be a Global Security, insert - THIS DEBENTURE IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE OF THE CLEARING
AGENCY. THIS DEBENTURE IS EXCHANGEABLE FOR DEBENTURES REGISTERED IN THE NAME OF
A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS DEBENTURE
(OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE BY THE CLEARING
33
AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE CLEARING
AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING AGENCY) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY DEBENTURE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY 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.]
34
METLIFE, INC.
Global Certificate initially representing
$_______ aggregate principal amount of
6.40% Fixed-to-Floating Rate Junior Subordinated Debentures due 2066
No. R-____
CUSIP No. __________
This global certificate (the "Global Certificate") is one of the Global
Certificates in respect of a duly authorized issue of 6.40% Fixed-to-Floating
Rate Junior Debentures due 2066 (the "Junior Subordinated Debentures") of
MetLife, Inc., a Delaware corporation (hereinafter called the "Company," which
term includes any successor corporation under the Indenture, as defined on the
reverse hereof). For value received, the Company hereby promises to pay to Cede
& Co., or its registered assigns, on December 15, 2066 (the "Final Maturity
Date") (or on the date of redemption by the Company prior to the Final Maturity
Date, as provided for in the Indenture) the amount of principal of the Junior
Subordinated Debentures represented by this Global Certificate from time to time
and to pay interest from time to time on the Junior Subordinated Debentures
represented by this Global Certificate from December 21, 2006 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for as specified on the reverse hereof and in the Indenture; provided, however,
that the amount of principal of, and all amounts and unpaid interest on, the
Junior Subordinated Debentures represented by this Global Certificate shall be
payable in full on December 15, 2036 or any subsequent Interest Payment Date to
the extent, and subject to the conditions, set forth on the reverse hereof and
in the Indenture. If any date fixed for redemption or repayment of the Junior
Subordinated Debentures represented by this Global Certificate is not a Business
Day, then payment of the principal amount of the redemption price or repayment
of the principal amount of the Junior Subordinated Debentures represented by
this Global Certificate shall be made on the next day that is a Business day,
without any interest or other payment as a result of such delay.
This Junior Subordinated Debenture shall not be entitled to any benefit
under the Indenture, be valid or become obligatory for any purpose, until the
Certificate of Authentication hereon shall have been executed by the Trustee.
All terms used in this Global Certificate that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The provisions of the Junior Subordinated Debentures are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
Dated: ___________, 2006
35
METLIFE, INC.
By:________________________________
Name:
Title:
36
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures referred to in the within mentioned
Indenture.
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Trustee
By:______________________________________
Authorized Officer
Dated: ___________, 2006
37
[REVERSE OF DEBENTURE]
This Global Certificate is one of the certificates representing a duly
authorized issue of Junior Subordinated Debentures due 2066 (the "Junior
Subordinated Debentures"), issued under a Subordinated Indenture, dated as of
June 21, 2005 (herein called the "Base Indenture"), between the Company and the
Bank of New York Trust Company, N.A. (as successor in interest to J.P. Morgan
Trust Company, National Association) (herein called the "Trustee," which term
includes any successor trustee under the Indenture), as supplemented by the
Third Supplemental Indenture, dated as of December 21, 2006 (the "Third
Supplemental Indenture" together with the Base Indenture, the "Indenture"), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Trustee, the Company and the holders of the Junior
Subordinated Debentures, and of the terms upon which the Junior Subordinated
Debentures are, and are to be, authenticated and delivered.
All terms used in this Junior Subordinated Debenture that are defined in
the Indenture shall have the meanings assigned to them in the Indenture.
Interest on the Junior Subordinated Debentures shall accrue (i) from the
date of initial issuance to but excluding December 15, 2036, or earlier
redemption, at an annual rate equal to 6.40%, payable semi-annually in arrears
on June 15 and December 15 of each year, commencing on June 15, 2007 and (ii)
solely in the event that the Junior Subordinated Debentures are not repaid or
otherwise redeemed on or before the scheduled Redemption Date (as defined below)
from and including December 15, 2036 to but excluding the Final Maturity Date or
earlier Maturity Date, at an annual rate equal to Three-Month LIBOR plus a
margin equal to 2.205%, payable quarterly in arrears on March 15, June 15,
September 15 and December 15 of each year.
Notwithstanding the provisions of Article III of the Base Indenture, the
Company shall have the right to redeem the Junior Subordinated Debentures, in
whole or in part, at any time on or after December 15, 2031, at a cash
redemption price equal to the Par Redemption Amount; provided that, if the
Junior Subordinated Debentures are not redeemed in whole, at least $50 million
aggregate principal amount of the Junior Subordinated Debentures (excluding any
Junior Subordinated Debentures held by the Company or any of its Affiliates),
must remain outstanding after giving effect to such redemption.
The Company shall have the right to redeem the Junior Subordinated
Debentures, in whole or in part, at any time prior to December 15, 2031, in
cases not involving a Tax Event or Rating Agency Event, at a cash redemption
price equal to the greater of (i) the Par Redemption Amount and (ii) the
Make-Whole Redemption Amount; provided that if the Junior Subordinated
Debentures are not redeemed in whole, at least $50 million aggregate principal
amount of the Junior Subordinated Debentures (excluding any Junior Subordinated
Debentures held by the Company or any of its Affiliates) must remain outstanding
after giving effect to such redemption.
At any time prior to December 15, 2031, the Company shall have the right to
redeem the Junior Subordinated Debentures in whole, but not in part, and only
following the
38
occurrence of a Tax Event or a Rating Agency Event, at a cash redemption price
equal to the greater of (i) the Par Redemption Amount and (ii) the Special Event
Make-Whole Redemption Amount. With respect to any redemption of Junior
Subordinated Debentures as a result of a Tax Event or Rating Agency Event, the
date fixed for such redemption will be within 180 days following the occurrence
of such Tax Event or a Rating Agency Event, as applicable; provided, however,
that if at that time the Company is able to eliminate, within the 180-day
period, the Tax Event or Rating Agency Event by taking some ministerial action
(such as making an election or filing a form) that has no adverse effect on the
Company or the holders of the Junior Subordinated Debentures, the Company shall
pursue such action in lieu of redemption. The Company will have no right or
obligation to redeem the Junior Subordinated Debentures while pursuing such
measure.
Any redemption shall be made upon not less than 15 days and no more than 30
days' notice before the date fixed for redemption to the registered holders of
the Junior Subordinated Debentures. If the Junior Subordinated Debentures are to
be redeemed in part, (a) the Company shall give the Trustee not less than 15
days and no more than 30 days notice in advance of the date fixed for redemption
and (b) the Junior Subordinated Debentures shall be redeemed pro rata or by lot
or by any other method utilized by the Trustee that the Trustee shall deem fair
and appropriate in its discretion. Any notice mailed as provided herein shall be
conclusively presumed to have been duly given, whether or not the holder of the
Junior Subordinated Debentures receives such notice, but failure duly to give
such notice by mail, or any defect in such notice or in the mailing thereof, to
any holder of the Junior Subordinated Debentures designated for redemption shall
not affect the validity of the proceedings for the redemption of any other
Junior Subordinated Debentures. Each such notice given to a holder shall state:
(i) the Redemption Date; (ii) the redemption price; (iii) that the Junior
Subordinated Debentures are being redeemed pursuant to the Indenture or the
terms of the Junior Subordinated Debentures together with the facts permitting
such redemption; (iv) if less than all Outstanding Junior Subordinated
Debentures are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Junior Subordinated
Debentures to be redeemed; (v) the place or places where the Junior Subordinated
Debentures are to be redeemed; and (vi) that interest on the Junior Subordinated
Debentures to be redeemed will cease to accrue on the Redemption Date.
Notwithstanding the foregoing, if the Junior Subordinated Debentures are issued
in book-entry form through The Depository Trust Company or any other similar
facility, notice of redemption may be given to the holders of Junior
Subordinated Debentures at such time and in any manner permitted by such
facility. The redemption price shall be paid prior to 12:00 noon, New York City
time, on the date of such redemption or at such earlier time on such date as the
Company determines and specifies in the notice of redemption. The Company shall
deposit with the Trustee or with a Paying Agent an amount of money sufficient to
pay the redemption price of such Junior Subordinated Debentures or any portion
thereof which are to be redeemed on Redemption Date.
Subject to the limitations contained in Section 3.2 of the Third
Supplemental Indenture, the Company has agreed to repay the principal amount of
the Junior Subordinated Debentures, together with accrued and unpaid interest,
on December 15, 2036 (the "Scheduled Redemption Date"). The Company has agreed
to repay the Junior Subordinated Debentures on the Scheduled Redemption Date
only to the extent that the Company has raised sufficient net proceeds during
the applicable QCS Proceeds Collection Period from the issuance of Qualifying
39
Capital Securities. The Company will use QCS Commercially Reasonable Efforts to
raise sufficient net proceeds during the applicable QCS Proceeds Collection
Period from the issuance of Qualifying Capital Securities to permit repayment of
the Junior Subordinated Debentures in full on the Scheduled Redemption Date. If
the Company has not raised sufficient net proceeds during the applicable QCS
Proceeds Collection Period to permit repayment of all principal and accrued and
unpaid interest, including any Compounded Interest, on the Junior Subordinated
Debentures on the Scheduled Redemption Date, the Company shall continue to use
QCS Commercially Reasonable Efforts to raise sufficient net proceeds during the
applicable QCS Proceeds Collection Period from the issuance of Qualifying
Capital Securities to permit repayment of the Junior Subordinated Debentures on
the next Interest Payment Date, and on each Interest Payment Date thereafter,
until the Junior Subordinated Debentures are paid in full.
If any notice of redemption has been given as provided herein, the Junior
Subordinated Debentures or portion of the Junior Subordinated Debentures with
respect to which such notice has been given shall become due and payable on the
date and at the place or places stated in such notice at the applicable
redemption price. From and after such date, the Junior Subordinated Debentures
to be redeemed shall cease to bear interest. If any Junior Subordinated
Debentures called for redemption shall not be so paid upon surrender thereof for
redemption, the redemption price shall, until paid, bear interest from the date
set for redemption until the date redemption actually occurs at the then
applicable interest rate on the Junior Subordinated Debentures. On presentation
and surrender of certificates representing such Junior Subordinated Debentures
at a place of payment specified, in said notice the said Junior Subordinated
Debentures or the specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price. Upon presentation of certificates
representing Junior Subordinated Debentures to be redeemed in part only, the
Company shall execute and the Trustee shall authenticate and deliver to the
holder thereof, at the expense of the Company, a new certificate or certificates
representing Junior Subordinated Debentures, of authorized denominations, in
aggregate principal amount equal to the unredeemed portion of the Junior
Subordinated Debentures represented by the certificate(s) so presented and
having the same original issue date, Final Maturity Date and terms. If a Global
Security is so surrendered, such new Junior Subordinated Debentures will also be
a new Global Security.
The Junior Subordinated Debentures shall not be entitled to the benefit of
any sinking fund.
If an Event of Default with respect to the Junior Subordinated Debentures
shall occur and be continuing, the principal of the Junior Subordinated
Debentures may be declared due and payable in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Base Indenture contains provisions for satisfaction, discharge and
defeasance at any time of the entire indebtedness of this Junior Subordinated
Debenture upon compliance by the Company with certain conditions set forth in
the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Junior Subordinated Debentures at the time Outstanding
(as defined in the Indenture) to execute
40
supplemental indentures for the purpose of, among other things, adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the holders of the Junior Subordinated Debentures; provided, however,
that, among other things, no such supplemental indenture shall (i) reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon without the consent of the holder of each Junior Subordinated
Debenture so affected, or (ii) reduce the aforesaid percentage of Junior
Subordinated Debentures, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of each Junior
Subordinated Debenture then Outstanding and affected thereby. The Indenture also
contains provisions permitting the holders of a majority in aggregate principal
amount of the Junior Subordinated Debentures at the time Outstanding affected
thereby, on behalf of all of the holders of the Junior Subordinated Debentures,
to waive a default or Event of Default with respect to the Junior Subordinated
Debentures, and its consequences, except a default or Event of Default in the
payment of the principal of or interest on any of the Junior Subordinated
Debentures or a default in respect of a provision that under Article IX of the
Base Indenture cannot be amended without the consent of each holder affected
thereby. Any such consent or waiver by the registered holder of this Junior
Subordinated Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Junior Subordinated Debenture and of any Junior Subordinated Debenture
issued in exchange for or in place hereof (whether by registration of transfer
or otherwise) irrespective of whether or not any notation of such consent or
waiver is made upon this Junior Subordinated Debenture.
So long as (i) no Event of Default has occurred and is continuing and (ii)
no Trigger Event has occurred and the related Trigger Period is continuing, the
Company may elect to defer one or more payments of interest on such Junior
Subordinated Debentures (an "Optional Deferral" and any such deferred interest,
"Optionally Deferred Interest") at any time during the Term of the Junior
Subordinated Debentures, and from time to time, for up to ten years (which may
include a combination of semi-annual and quarterly Interest Payment Periods)
without giving rise to an Event of Default and acceleration under the terms of
the Indenture, provided, however, that (notwithstanding anything to the contrary
herein) the Company may not defer any payment of interest past the Maturity Date
and no Optional Deferral Period (as defined below) may end on a date other than
on an Interest Payment Date. During any Optional Deferral and for so long as any
Optionally Deferred Interest remains outstanding (an "Optional Deferral
Period"), the Company may pay Optionally Deferred Interest that was deferred
through the Fifth Deferral Anniversary out of any source of funds. Optionally
Deferred Interest will continue to accrue and compound on each Interest Payment
Date, to the extent permitted by applicable law, at the then applicable interest
rate on the Junior Subordinated Debentures. If Optional Deferral has continued
beyond the Fifth Deferral Anniversary, then the provisions of Section 6.2 of the
Third Supplemental Indenture will apply, and the Company must (except on the
Final Maturity Date or upon an acceleration of the Junior Subordinated
Debentures following an Event of Default (an "Acceleration Date") with respect
to the Junior Subordinated Debentures) make Commercially Reasonable Efforts to
sell Common Stock (unless such interest has been (or is being) paid from the
proceeds of Qualifying Warrants) to satisfy its obligation to pay Optionally
Deferred Interest on the Junior Subordinated Debentures and may pay such
Optionally Deferred Interest only out of the net proceeds from the sale of
Qualifying APM Securities. Additionally, during any Optional Deferral Period,
the restrictions on payment by the Company of dividends and other
41
distributions on capital stock pursuant to Section 6.1 of the Third Supplemental
Indenture will apply. Subject to the proviso in the first sentence of this
paragraph, there is no limit on the number of Optional Deferral Periods that the
Company may begin.
The Company shall provide a notice of any Optional Deferral to the Trustee
and the holders of the Junior Subordinated Debentures no more than 30 and no
fewer than 15 days prior to the relevant Interest Payment Date. Subject to
Section 4.2(b) of the Third Supplemental Indenture, a notice of Optional
Deferral, once given, shall be irrevocable and the deferral of payments on the
related Interest Payment Date shall be considered an Optional Deferral, unless a
Trigger Event has occurred as of the 30th day prior to such Interest Payment
Date.
If and to the extent that a Trigger Event has occurred and a Trigger Period
caused thereby is continuing as of the 30th day prior to an Interest Payment
Date, and regardless of any notice of Optional Deferral that has been previously
delivered (except on the Final Maturity Date or Acceleration Date with respect
to the Junior Subordinated Debentures) (i) the Company may pay interest on the
Junior Subordinated Debentures (other than any interest that had accrued during
an Optional Deferral Period through the Fifth Deferral Anniversary thereof and
prior to the occurrence of a Trigger Event which may continue to be deferred to
the extent provided herein or be paid out of any source of funds) only to the
extent that such interest is paid through the Alternative Payment Mechanism and
(ii) the Company must make Commercial Reasonable Efforts to sell Common Stock,
the sale of which will provide sufficient cash proceeds to pay any amounts due
to the holders of the Junior Subordinated Debentures in satisfaction of all
accrued and unpaid interest, together with any Compounded Interest, to the
extent permitted by law (unless such interest has been (or is being) paid from
the proceeds of Qualifying Warrants). Any interest that is accrued and unpaid
during a Trigger Period will continue to accrue and compound on each Interest
Payment Date, to the extent permitted by applicable law, at the then applicable
interest rate on the Junior Subordinated Debentures.
Not earlier than the 15th nor later than the 30th day prior to each
Interest Payment Date during a Trigger Period, the Company shall give written
notice of the continuance of such Trigger Period to the Trustee and holders of
the Junior Subordinated Debentures. Such notice shall, depending on which
condition is relied upon in determining that a Trigger Event has occurred, set
forth either (x) the Covered Insurance Subsidiaries' Risk-Based Capital Ratio or
(y) the Trailing Four Quarters Consolidated Net Income Amount and the Adjusted
Stockholders' Equity Amount, as applicable, and the extent to which these
amounts must increase in order for payments of interest from sources other than
the Alternative Payment Mechanism to resume.
In the event that a Trigger Period is no longer continuing and at the
termination of the Trigger Period there is no unpaid interest from an Optional
Deferral Period that had continued beyond the Fifth Deferral Anniversary, the
Company may pay subsequent interest in cash from any source of funds. However,
any unpaid interest, that accrued during the continuance of a Trigger Period or
an Optional Deferral Period that continued beyond the Fifth Deferral Anniversary
may only be satisfied in accordance with the provisions of the Alternative
Payment Mechanism, except that on the Final Maturity Date and the Acceleration
Date of the Junior Subordinated Debentures, the Company may pay any accrued and
unpaid interest without regard to the source of funds. Any accrued and unpaid
interest will in all events be due and
42
payable upon the Maturity Date, except for Foregone Interest to the extent
provided for in Article 11 of the Third Supplemental Indenture.
Each holder of a Junior Subordinated Debenture, by such holder's acceptance
thereof, agrees that upon any payment or distribution of assets to creditors of
the Company upon any bankruptcy, insolvency or receivership proceeding with
respect to the Company, and prior to the Maturity Date or redemption of such
Junior Subordinated Debentures, such holder shall not have a claim for, and thus
no right to receive, interest that is unpaid due to certain consequences of a
Trigger Event (including Compounded Interest) and has not been settled through
the application of the Alternative Payment Mechanism, to the extent that the
aggregate amount thereof (including Compounded Interest) exceeds 25% of the then
Outstanding principal amount of such Junior Subordinated Debenture in respect of
which such interest was deferred. For the avoidance of doubt, this limitation on
claims for unpaid interest does not apply to Optionally Deferred Interest, and
holders will have a full claim for, and right to receive, such Optionally
Deferred Interest.
Except as provided in the immediately preceding paragraph and Article 11 of
the Third Supplemental Indenture, no reference herein to the Indenture and no
provision of this Junior Subordinated Debenture or of the Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of (and premium, if any) and interest on this Junior
Subordinated Debenture at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Base Indenture and subject to certain limitations
therein set forth, the transfer of Junior Subordinated Debentures is registrable
in the Security Register, upon surrender of Junior Subordinated Debentures for
registration of transfer at the office or agency of the Company maintained under
Section 4.02 of the Base Indenture duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Securities
Registrar duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Junior Subordinated Debentures of this
series, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees. No service charge
shall be made for any such registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
Prior to due presentment of Junior Subordinated Debentures for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name Junior Subordinated Debentures are
registered as the owner hereof for all purposes, whether or not Junior
Subordinated Debentures are overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary.
The Junior Subordinated Debentures are issuable only in registered form
without coupons in denominations of $1,000 and integral multiples thereof. This
Global Certificate is exchangeable for Junior Subordinated Debentures in
definitive form only under certain limited circumstances set forth in the Base
Indenture. As provided in the Base Indenture and subject to certain limitations
therein set forth, Junior Subordinated Debentures are exchangeable for a like
43
aggregate principal amount of Junior Subordinated Debentures of a different
authorized denomination, as requested by the holder surrendering the same.
No recourse shall be had for the payment of the principal of or the
interest on Junior Subordinated Debentures, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Company agrees, and by acquiring an interest in a Junior Subordinated
Debenture each beneficial owner of a Junior Subordinated Debenture agrees, to
treat the Junior Subordinated Debentures as indebtedness for U.S. federal income
tax purposes.
THE INDENTURE AND THE JUNIOR SUBORDINATED DEBENTURES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
44
ARTICLE 10
ORIGINAL ISSUE OF JUNIOR SUBORDINATED DEBENTURES
SECTION 10.1 ORIGINAL ISSUE OF JUNIOR SUBORDINATED DEBENTURES.
(a) Junior Subordinated Debentures in the aggregate principal amount not to
exceed $1,250,000,000, except as provided in Section 2.1(b) hereof, may, upon
execution of this Third Supplemental Indenture, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Junior Subordinated Debentures to or upon the
written order of the Company, signed by its Chief Executive Officer, its
President, or any Vice President (or more senior officer) and its Treasurer or
an Assistant Treasurer, without any further action by the Company.
(b) The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of the year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE 11
LIMITATION ON CLAIMS
SECTION 11.1 LIMITATION ON CLAIM FOR DEFERRED INTEREST DUE TO A TRIGGER EVENT IN
BANKRUPTCY.
Each holder of a Junior Subordinated Debenture, by such holder's acceptance
thereof, agrees that upon any payment or distribution of assets to creditors of
the Company upon any bankruptcy, insolvency or receivership proceeding with
respect to the Company, and prior to the Maturity Date or redemption of such
Junior Subordinated Debentures, such holder shall not have a claim for, and thus
no right to receive, interest that is unpaid due to certain consequences of a
Trigger Event (including Compounded Interest) and has not been settled through
the application of the Alternative Payment Mechanism, to the extent that the
aggregate amount thereof (including Compounded Interest) exceeds 25% of the then
Outstanding principal amount of such Junior Subordinated Debenture in respect of
which such interest was deferred. Amounts to which the holders of the Junior
Subordinated Debentures would have been entitled to receive hereunder, but for
the operation of this Section 11.1, are referred to as "Foregone Interest." For
the avoidance of doubt, this limitation on claims for unpaid interest does not
apply to Optionally Deferred Interest, and holders will have a full claim for,
and right to receive, such Optionally Deferred Interest.
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ARTICLE 12
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The provisions of Article XIII of the Base Indenture shall apply to the
Junior Subordinated Debentures.
ARTICLE 13
MISCELLANEOUS
SECTION 13.1 RATIFICATION OF BASE INDENTURE; CONFLICTS.
The Base Indenture, as supplemented by this Third Supplemental
Indenture, is in all respects ratified and confirmed, and this Third
Supplemental Indenture shall be deemed part of the Base Indenture in the manner
and to the extent herein and therein provided. To the extent permitted by
applicable law and the Base Indenture, in the event of any conflict between this
Third Supplemental Indenture and the Base Indenture or the provisions set forth
in the certificates of Junior Subordinated Debentures, as the case may be, this
Third Supplemental Indenture shall control.
SECTION 13.2 JUNIOR SUBORDINATED DEBENTURES UNAFFECTED BY OTHER SUPPLEMENTAL
INDENTURES.
None of the Company's supplemental indentures to the Base Indenture entered
into prior to the date hereof applies to the Junior Subordinated Debentures. To
the extent the terms of the Base Indenture are amended by any of such other
supplemental indenture, no such amendment shall relate or apply to the Junior
Subordinated Debentures. To the extent the terms of the Base Indenture are
amended as provided herein, no such amendment shall in any way affect the terms
of any such other supplemental indenture or any other series of Securities. This
Third Supplemental Indenture shall relate and apply solely to the Junior
Subordinated Debentures.
SECTION 13.2 TRUSTEE NOT RESPONSIBLE FOR RECITALS.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
SECTION 13.4 TAX TREATMENT.
The Company agrees, and by acquiring an interest in a Junior Subordinated
Debenture each beneficial owner of a Junior Subordinated Debenture agrees, to
treat the Junior Subordinated Debentures as indebtedness for U.S. federal income
tax purposes.
SECTION 13.5 GOVERNING LAW.
This Third Supplemental Indenture and the Junior Subordinated Debentures
will be governed by, and construed in accordance with, the internal laws of the
State of New York.
SECTION 13.6 SEPARABILITY.
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In case any one or more of the provisions contained in this Third
Supplemental Indenture or in the Junior Subordinated Debentures shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Third Supplemental Indenture or of the Junior Subordinated Debentures,
but this Third Supplemental Indenture and the Junior Subordinated Debentures
shall be construed as if such invalid or illegal or unenforceable provision had
never been contained herein or therein.
SECTION 13.7 COUNTERPARTS.
This Third Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
SECTION 13.8 CALCULATION AGENT AND PREMIUM CALCULATION AGENT
Whether or not expressly provided herein or in the Base Indenture, every
provision of this Third Supplemental Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee, the
Calculation Agent and the Premium Calculation Agent shall be subject to Article
VII of the Base Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental
Indenture to be duly executed by their respective officers thereunto duly
authorized, on the date or dates indicated in the acknowledgments and as of the
day and year first above written.
METLIFE, INC, as
Issuer
By: /s/ Anthony J. Williamson
-------------------------------
Name: Anthony J. Williamson
Title: Senior Vice President and
Treasurer
[SEAL]
Attested:
By: /s/ Gwenn L. Carr
---------------------
Name: Gwenn L. Carr
Title: Senior Vice President and Secretary
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Trustee
By:/s/ Lawrence M. Kusch
----------------------------------
Name: Lawrence M. Kusch
Title: Assistant Vice President
48