1
EXHIBIT 4.4
AMENDED AND RESTATED
DECLARATION OF TRUST
Of
UNION PACIFIC CAPITAL TRUST
Dated as of April 1, 1998
2
TABLE OF CONTENTS
Page
ARTICLE I
Interpretation and Definitions
SECTION 1.01. Definitions...................................... 2
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application................. 11
SECTION 2.02. Lists of Holders of Securities................... 12
SECTION 2.03. Reports by the Property Trustee.................. 12
SECTION 2.04. Periodic Reports to Property Trustee............. 13
SECTION 2.05. Evidence of Compliance with Conditions
Precedent............................... 13
SECTION 2.06. Events of Default; Waiver........................ 13
SECTION 2.07. Event of Default; Notice......................... 15
ARTICLE III
Organization
SECTION 3.01. Name............................................. 16
SECTION 3.02. Office........................................... 16
SECTION 3.03. Purpose.......................................... 16
SECTION 3.04. Authority........................................ 17
SECTION 3.05. Title to Property of the Trust................... 17
SECTION 3.06. Powers and Duties of the Administrative
Trustees................................ 17
SECTION 3.07. Prohibition of Actions by the Trust and
the Trustees............................ 21
3
Page
SECTION 3.08. Powers and Duties of the Property
Trustee..................................22
SECTION 3.09. Certain Duties and Responsibilities of
the Property Trustee.....................25
SECTION 3.10. Certain Rights of Property Trustee................27
SECTION 3.11. Delaware Trustee..................................29
SECTION 3.12. Execution of Documents............................30
SECTION 3.13. Not Responsible for Recitals or
Issuance of Securities...................30
SECTION 3.14. Duration of Trust.................................30
SECTION 3.15. Mergers...........................................30
ARTICLE IV
Sponsor
SECTION 4.01. Sponsor's Purchase of Common
Securities...............................32
SECTION 4.02. Responsibilities of the Sponsor...................32
SECTION 4.03. Guarantee of Payment of Trust
Obligations..............................33
ARTICLE V
Trustees
SECTION 5.01. Number of Trustees................................34
SECTION 5.02. Delaware Trustee..................................34
SECTION 5.03. Property Trustee; Eligibility.....................34
SECTION 5.04. Qualifications of Administrative
Trustees and Delaware Trustee
Generally................................35
SECTION 5.05. Initial Trustees..................................35
SECTION 5.06. Appointment, Removal and Resignation of
Trustees.................................36
2
4
Page
SECTION 5.07. Vacancies among Trustees..........................39
SECTION 5.08. Effect of Vacancies...............................39
SECTION 5.09. Meetings..........................................40
SECTION 5.10. Delegation of Power...............................40
SECTION 5.11. Merger, Conversion, Consolidation or
Succession to Business...................41
ARTICLE VI
Distributions
SECTION 6.01. Distributions.....................................41
ARTICLE VII
Issuance of Securities
SECTION 7.01. General Provisions Regarding
Securities...............................42
SECTION 7.02. Execution and Authentication......................42
SECTION 7.03. Form and Dating...................................43
SECTION 7.04. Registrar, Paying Agent and Conversion
Agent....................................47
SECTION 7.05. Paying Agent to Hold Money in Trust...............47
SECTION 7.06. Replacement Securities............................48
SECTION 7.07. Outstanding Preferred Securities..................48
SECTION 7.08. Preferred Securities in Treasury..................49
SECTION 7.09. Temporary Securities..............................49
SECTION 7.10. Cancellation......................................49
3
5
Page
ARTICLE VIII
Termination of Trust
SECTION 8.01. Termination of Trust..............................50
ARTICLE IX
Transfer and Exchange
SECTION 9.01. General...........................................51
SECTION 9.02. Transfer Procedures and Restrictions..............52
SECTION 9.03. Deemed Security Holders...........................59
SECTION 9.04. [Reserved]........................................59
SECTION 9.05. Notices to Clearing Agency........................59
SECTION 9.06. Appointment of Successor Clearing
Agency...................................59
ARTICLE X
Limitation of Liability of
Holders of Securities, Trustees or others
SECTION 10.01. Liability.........................................60
SECTION 10.02. Exculpation.......................................60
SECTION 10.03. Fiduciary Duty....................................61
SECTION 10.04. Indemnification...................................62
SECTION 10.05. Outside Businesses................................63
ARTICLE XI
Accounting
SECTION 11.01. Fiscal Year.......................................63
4
6
Page
SECTION 11.02. Certain Accounting Matters........................63
SECTION 11.03. Banking...........................................64
SECTION 11.04. Withholding.......................................64
ARTICLE XII
Amendments and Meetings
SECTION 12.01. Amendments........................................65
SECTION 12.02. Meetings of the Holders of Securities;
Action by Written Consent................66
ARTICLE XIII
Representations of Property Trustee
and Delaware Trustee
SECTION 13.01. Representations and Warranties of
Property Trustee.........................68
SECTION 13.02. Representations and Warranties of
Delaware Trustee.........................69
ARTICLE XIV
Registration Rights
SECTION 14.01. Registration Rights...............................70
ARTICLE XV
Miscellaneous
SECTION 15.01. Notices...........................................70
5
7
Page
SECTION 15.02. Governing Law.....................................72
SECTION 15.03. Intention of the Parties..........................72
SECTION 15.04. Headings..........................................72
SECTION 15.05. Successors and Assigns............................72
SECTION 15.06. Partial Enforceability............................73
SECTION 15.07. Counterparts......................................73
ANNEX I Terms of 6 1/4% Convertible Preferred
Securities and 6 1/4% Convertible Common
Securities
Exhibit A-1 Form of Preferred Security
Exhibit A-2 Form of Common Security
6
8
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310 (a)........................................... 5.03(a)
310 (c)........................................... Inapplicable
311 (c)........................................... Inapplicable
312 (a)........................................... 2.02(a)
312 (b)........................................... 2.02(b)
313 ......................................... 2.03
314 (a)........................................... 2.04
314 (b)........................................... Inapplicable
314 (c)........................................... 2.05
314 (d)........................................... Inapplicable
314 (f) ......................................... Inapplicable
315 (a)........................................... 3.09(a)
3.09(b)
315 (c)........................................... 3.09(a)
315 (d)........................................... 3.09(b)
316 (a)........................................... Annex I
316 (c)........................................... 3.06(e)
* This Cross-Reference Table does not constitute part of the
Declaration and shall not affect the interpretation of any of
its terms or provisions.
7
9
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
UNION PACIFIC CAPITAL TRUST
APRIL 1, 1998
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of April 1, 1998, by the undersigned trustees (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Union
Pacific Corporation, a Utah corporation, as trust sponsor (the "Sponsor"), and
by the holders, from time to time, of undivided beneficial interests in the
Trust (as defined below) issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Union Pacific Capital
Trust (the "Trust") under the Business Trust Act (as hereinafter defined)
pursuant to a Declaration of Trust dated as of March 17, 1998 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on March 17, 1998, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer (as herein after defined); and
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
10
3
ARTICLE I
Interpretation and Definitions
SECTION 1.01. Definitions. Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Declaration, and any capitalized term not defined in this Declaration shall have
the meaning assigned thereto in the Indenture;
(b) a term defined anywhere in this Declaration or the Indenture has
the same meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections, Annexes
and Exhibits are to Articles and Sections of and Annexes and Exhibits to this
Declaration unless otherwise specified;
(e) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless other wise defined in this Declaration or unless
the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Administrative Action" has the meaning set forth in the definition of
"Tax Event".
"Administrative Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or con trolled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person
11
4
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Appointment Event" means an event defined in the terms of the
Preferred Securities, as set forth in Annex I, which entitles the Holders of a
Majority in liquidation amount of the Preferred Securities to appoint a Special
Trustee.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Beneficiaries" has the meaning set forth in Section 4.03(a).
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Depositary as described in Section 9.04.
"Business Day" means any day other than a Saturday or a Sunday, a day
on which banking institutions in New York, New York and in London, England are
authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.
"Closing Date" means April 1, 1998.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation.
"Commission" means the Securities and Exchange Commission.
12
5
"Common Securities" has the meaning specified in Section 7.01(a).
"Common Securities Guarantee" means the guarantee agreement to be dated
as of April 1, 1998, of the Sponsor in respect of the Common Securities.
"Conversion Agent" has the meaning set forth in Section 7.04.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Event of Default" in respect of the Securities means an
Event of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Debentures.
"Debenture Issuer" means the Sponsor in its capacity as issuer of the
Debentures.
"Debenture Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Property Trustee, in the
form attached to the Indenture as Exhibit A.
"Delaware Trustee" has the meaning set forth in Section 5.02.
"Deferral Period" has the meaning set forth in the Indenture.
"Definitive Preferred Securities" means the Regulation S Definitive
Preferred Security, the IAI Definitive Preferred Security and any other
Preferred Securities in definitive form issued by the Trust.
"Depositary" means The Depository Trust Company, the initial clearing
agency, until a successor shall be appointed pursuant to Section 9.06, and
thereafter means such successor Depositary.
13
6
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"Event of Default" means:
(i) a Debenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days (subject to the deferral of any due date in the case of a Deferral
Period); or
(iii) default by the Trust in the payment of any Redemption Price of
any Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in the Declaration (other than a
covenant or warranty, a default in the performance of which or the breach of
which is addressed in clause (ii) or (iii) above), and continuation of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Issuer Trustee or Issuer
Trustees by the holders of at least 25% in aggregate liquidation amount of
the outstanding Preferred Securities, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" under the Declaration; or
(v) the failure of the Sponsor to appoint a successor Property Trustee
in the manner required by Section 5.06(c).
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Global Preferred Securities" means Rule 144A Global Preferred
Securities and/or Unrestricted Global Preferred Securities, as the context
requires.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
14
7
"IAI Definitive Preferred Security" has the meaning set forth in
Section 7.03(c).
"Indemnified Person" means (a) any Trustee; (b) any Affiliate of any
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of April 1, 1998, between the
Debenture Issuer and the Debenture Trustee, as it may be amended from time to
time.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.06(g).
"Like Amount" means (i) with respect to a redemption of Preferred
Securities, Preferred Securities having an aggregate liquidation amount equal to
that portion of the principal amount of Debentures to be contemporaneously
redeemed in accordance with the Indenture, allocated to the Common Securities
and to the Preferred Securities based upon the relative liquidation amounts of
such classes and the proceeds of which will be used to pay the applicable
Redemption Price of the Preferred Securities and (ii) with respect to a
distribution of Debentures to holders of Preferred Securities in connection with
a dissolution or liquidation of the Trust, Debentures having a principal amount
equal to the aggregate liquidation amount of the Securities of the Holder to
whom such Debentures are distributed.
"List of Holders" has the meaning set forth in Section 2.02(a).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, Holder(s) of out standing Securities voting together as a single class or,
as the context may require, Holders of outstanding Preferred Securities or
Holders of outstanding Common Securities
15
8
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Obligations" means any costs, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to Holders of any Securities or other
similar interests in the Trust the amounts due such Holders pursuant to the
terms of the Securities or such other similar interests, as the case may be.
"Offering Circular" means the confidential offering circular, dated as
of March 27, 1998, relating to the issuance by the Trust of Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate
has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each
officer in rendering the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's
opinion, is necessary to enable such officer to
express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been
complied with.
16
9
"Optional Closing Date" has the meaning assigned to such term in the
Purchase Agreement.
"Participants" has the meaning set forth in Section 7.03(b).
"Paying Agent" has the meaning specified in Section 7.04.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.01(a).
"Preferred Securities Guarantee" means the guarantee agreement to be
dated as of April 1, 1998, of the Sponsor in respect of the Preferred
Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Depositary, or on the books of a
Person maintaining an account with such Depositary (directly as a Participant or
as an indirect participant, in each case in accordance with the rules of such
Depositary).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.03.
"Property Trustee Account" has the meaning set forth in Section
3.08(c).
"Purchase Agreement" has the meaning set forth in Section 7.03.
"Quorum" means a majority of the Administrative Trustees or, if there
are only two Administrative Trustees, both of them.
"Redemption Price" has the meaning set forth in Annex I.
17
10
"Registrable Securities" has the meaning set forth in Section 14.01.
"Registrar" has the meaning set forth in Section 7.04.
"Registration Default" has the meaning set forth in Section 14.01.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated April 1, 1998, among the Sponsor, the Trust, and the Initial
Purchasers named in the Purchase Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Definitive Preferred Security" has the meaning set forth
in Section 7.03(c).
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer in
the Corporate Trust Department of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Restricted Preferred Securities" shall include the Regulation S
Definitive Preferred Securities, the IAI Definitive Preferred Securities and the
Rule 144A Global Preferred Securities.
"Restricted Securities Legend" has the meaning specified in Section
9.02(j).
"Rule 144A Global Preferred Security" has the meaning specified in
Section 7.03(a).
18
11
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor legislation.
"Securities Custodian" means the custodian with respect to the Rule
144A Global Preferred Security and any other Preferred Security in global form.
"Securities Guarantees" means the Preferred Securities Guarantee and
the Common Securities Guarantee.
"Shelf Registration Statement" has the meaning specified in Section
14.01.
"Special Trustee" means a trustee appointed by the Holders of a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.06(a)(ii)(B).
"Sponsor" means Union Pacific Corporation, a Utah corporation, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section 5.06.
"Successor Property Trustee" has the meaning set forth in Section 5.06.
"Super Majority" has the meaning set forth in Section 2.06(a)(ii).
"Tax Event" means the Property Trustee shall have received an opinion
of nationally recognized independent tax counsel to the Sponsor (reasonably
acceptable to the Trustees) experienced in such matters (a "Dissolution Tax
Opinion") to the effect that, as a result of (i) any amendment to or change
(including any announced prospective change (which shall not include a proposed
change), provided that a Tax Event shall not occur more than 90 days before the
effective date of any such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (ii) any judicial decision or official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement
19
12
of intent to adopt such procedures or regulations (an "Administrative Action")
or (iii) any amendment to or change in the administrative position or
interpretation of any Administrative Action or judicial decision that differs
from the theretofore generally accepted position, in each case, by any
legislative body, court, governmental agency or regulatory body, irrespective of
the manner in which such amendment or change is made known, which amendment or
change is effective or such Administrative Action or decision is announced, in
each case, on or after the date of original issuance of the Debentures or the
issue date of the Preferred Securities issued by the Trust, there is more than
an insubstantial risk that (a) if the Debentures are held by the Property
Trustee, (I) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States Federal income tax with respect to interest
accrued or received on the Debentures or subject to more than a de minimis
amount of other taxes, duties or other governmental charges as determined by
such counsel, or (II) any portion of interest payable by the Sponsor to the
Trust on the Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Sponsor in whole or in part for United States
Federal income tax purposes or (b) with respect to Debentures which are no
longer held by the Property Trustee, any portion of interest payable by the
Sponsor on the Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Sponsor in whole or in part for United States
Federal income tax purposes.
"10% in liquidation amount of the Securities" means, except as provided
in the terms of the Preferred Securities or by the Trust Indenture Act, Holders
of out standing Securities voting together as a single class or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
20
13
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Unrestricted Global Security" has the meaning set forth in Section
9.02(b).
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This Declaration is
subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration, which are incorporated by reference in and made part
of this Declaration and shall, to the extent applicable, be governed by such
provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.02. Lists of Holders of Securities. (a) Each of the Sponsor
and the Administrative Trustees on behalf of the Trust shall provide the
Property Trustee (i) within 14 days after each record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the
21
14
Holders of the Securities ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Administrative Trustees on behalf of the Trust
shall be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Property Trustee by the Sponsor and the Administrative Trustees on behalf of the
Trust, and (ii) at any other time, within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Property Trustee. The Property Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
its capacity as Paying Agent (if acting in such capacity), provided that the
Property Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Property Trustee. Within 60 days after May
15 of each year, commencing May 15, 1998, the Property Trustee shall provide to
the Holders of the Preferred Securities such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Property Trustee. Each of the Sponsor
and the Administrative Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information as required by Section
314 of the Trust Indenture Act (if any) and the compliance certificate required
by Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. Each of
the Sponsor and the Administrative Trustees on behalf of the Trust shall provide
to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to
22
15
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.06. Events of Default; Waiver. (a) The Holders of a Majority
in liquidation amount of Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default in
respect of the Preferred Securities and its consequences, provided that, if the
Event of Default:
(i) is caused by a Debenture Event of Default that is not waivable
under the Indenture, the Event of Default under the Declaration shall also
not be waivable;
(ii) is caused by a Debenture Event of Default that requires the
consent or vote of greater than a majority in principal amount of the
holders of the Debentures (a "Super Majority") to be waived under the
Indenture, the Event of Default under the Declaration may only be waived by
the vote of the Holders of at least the proportion in liquidation amount of
the Preferred Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding;
(iii) is the result of a default by the Trust in the payment of any
Distribution when it becomes due and payable, which default has continued
for 30 days (subject to the deferral of any due date in the case of a
Default Period), the Event of Default shall not be waivable; or
(iv) is the result of a default by the Trust in the payment of any
Redemption Price of any preferred Security when it becomes due and payable,
the Event of Default shall not be waivable.
The foregoing provisions of this Section 2.06(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
Upon such waiver, any such default shall cease to exist, and any Event
of Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but
23
16
no such waiver shall extend to any subsequent or other default or an Event of
Default with respect to the Preferred Securities or impair any right consequent
thereon. Any waiver by the Holders of the Preferred Securities of an Event of
Default with respect to the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of any such Event of
Default with respect to the Common Securities for all purposes of this
Declaration without any further act, vote, or consent of the Holders of the
Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the Event of Default is
caused by a Debenture Event of Default that:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided below in this Section 2.06(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.06(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Preferred Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until the effects of all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
24
17
Section 2.06(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B)
of the Trust Indenture Act and such Section 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.06(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Preferred Securities, constitutes
a waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.06(c) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.07. Event of Default; Notice. (a) The Property Trustee shall,
within thirty days after the occurrence of an Event of Default actually known to
the Trustee, (i) transmit by mail, first-class postage prepaid, to the Holders
of the Securities, and (ii) transmit by any means provided for in this
Declaration to the Administrative Trustees and the Sponsor, notices of all
defaults actually known to the Property Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 2.07(a) being hereby defined to be an Event of Default, not
including any periods of grace and irrespective of the giving of any notice);
provided that, except for a default in the payment of principal of (or premium,
if any) or interest on any of the Debentures or in the payment of any sinking
fund installment established for the Debentures, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
25
18
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.01(1) and 5.01(2) of the Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice.
ARTICLE III
Organization
SECTION 3.01. Name. The Trust is named "Union Pacific Capital Trust,"
as such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Securities. The Trust's activities
may be conducted under the name of the Trust or any other name deemed advisable
by the Administrative Trustees.
SECTION 3.02. Office. The address of the principal office of the Trust
is c/o Union Pacific Corporation, 1717 Main Street, Suite 5900, Dallas, Texas
75201-4605, Attention: Chief Financial Officer. On ten Business Days written
notice to the Holders of Securities, the Administrative Trustees may designate
another principal office.
SECTION 3.03. Purpose. The exclusive purposes and functions of the
Trust are (a) to issue and sell Securities and use the proceeds from such sale
to acquire the Debentures, and (b) except as otherwise limited herein, to engage
in only those other activities necessary or incidental thereto. The Trust shall
not borrow money, issue debt or reinvest proceeds derived from investments,
pledge any of its assets, or otherwise undertake (or permit to be undertaken)
any activity that would cause the Trust not to be classified for United States
Federal income tax purposes as a grantor trust.
SECTION 3.04. Authority. (a) Subject to the limitations provided in
this Declaration and to the specific duties of the Property Trustee, the
Administrative Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Administrative Trustees in
accordance with their powers
26
19
shall constitute the act of and serve to bind the Trust and an action taken by
the Property Trustee in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Administrative Trustees is called with respect to any matter over
which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(c) An Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.06.
SECTION 3.05. Title to Property of the Trust. Except as provided in
Section 3.08 with respect to the Debentures and the Property Trustee Account or
as otherwise provided in this Declaration, legal title to all assets of the
Trust shall be vested in the Trust. The Holders shall not have legal title to
any part of the assets of the Trust, but shall have an undivided beneficial
interest in the assets of the Trust.
SECTION 3.06. Powers and Duties of the Administrative Trustees. The
Administrative Trustees shall have, together (except in the case of paragraphs
(a), (b) and (c) of this Section 3.06) with any Special Trustee holding office
pursuant to Section 5.06, if any, the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
interests in the Trust other than the Securities, and the issuance of Securities
shall be limited
27
20
to simultaneous issuances of both Preferred Securities and Common Securities on
the Closing Date and any Optional Closing Date;
(b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:
(i) assist in the preparation of the Offering Circular and a
preliminary offering circular, in each case prepared by the Sponsor, in
relation to the offering and sale of Preferred Securities to qualified
institutional buyers in reliance on Rule 144A under the Securities Act, a
limited number of institutional "accredited investors", as such term is
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act and
outside the United States to non-U.S. persons in offshore transactions in
reliance on Regulation S under the Securities Act and to execute and file
with the Commission, at such time as determined by the Sponsor, a
registration statement filed on Form S-3 prepared by the Sponsor, including
any amendments thereto, in relation to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify or
register all or part of the Preferred Securities in any State or foreign
jurisdiction in which the Sponsor has determined to qualify or register such
Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor, to the
Private Offerings, Resale and Trading through Automated Linkages ("PORTAL")
Market and, at such time as determined by the Sponsor, to the New York Stock
Exchange or any other national stock exchange or the Nasdaq National Market
for listing or quotation of the Preferred Securities;
(iv) to execute and deliver letters, documents, or instruments with The
Depository Trust Company relating the Preferred Securities;
(v) execute and file with the Commission, at such time as determined by
the Sponsor, a registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor relating to the
28
21
registration of the Preferred Securities under Section 12 of the
Exchange Act; and
(vi) execute and enter into the Purchase Agreement, Registration Rights
Agreement and other related agreements providing for the sale of the
Preferred Securities and to provide any certificates or other documents in
connection with such agreements;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders or Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Tax Event; provided that the Administrative Trustees (and
Special Trustee, if any) shall consult with the Sponsor and the Property Trustee
before taking or refraining from taking any Ministerial Action in relation to a
Tax Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.08(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
29
22
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;
(k) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer payments
of interest on the Debentures by extending the interest payment period under the
Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Administrative Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.06, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
30
23
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes,
provided that such action does not adversely affect the interests of Holders;
and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on behalf of
the Trust.
The Administrative Trustees must exercise the powers set forth in this
Section 3.06 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.03.
Subject to this Section 3.06, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.08.
Any expenses incurred by the Administrative Trustee (or the Special
Trustee, if any) pursuant to this Section 3.06 shall be reimbursed by the
Debenture Issuer.
SECTION 3.07. Prohibition of Actions by the Trust and the Trustees. (a)
The Trust shall not, and the Trustees (including the Property Trustee) on behalf
of the Trust shall not, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
31
24
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in the Declaration or Annex I hereto, (A)
direct the time, method and place of exercising any trust or power conferred
upon the Debenture Trustee with respect to the Debentures, (B) waive any
past default that is waivable under Section 5.13 of the Indenture, (C)
exercise any right to rescind or annul any declaration that the principal of
all the Debentures shall be due and payable, or (D) consent to any
amendment, modification or termination of the Indenture or the Debentures
where such consent shall be required unless, in the case of each action
described in clause (A), (B), (C) or (D), the Trust shall have received an
opinion of counsel to the effect that such modification will not cause more
than an insubstantial risk that for United States federal income tax
purposes the Trust will not be classified as a grantor trust.
SECTION 3.08. Powers and Duties of the Property Trustee. (a) The legal
title to the Debentures shall be owned by and held of record in the name of the
Property Trustee in trust for the benefit of the Holders of the Securities. The
right, title and interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Property Trustee
in accordance with Section 5.06. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Debentures
have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
32
25
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Property Trustee
Account in accordance with Section 6.01. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance with this
Declaration.
(ii) engage in such ministerial activities as so directed and as shall
be necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice of distribution issued by the Administrative
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as so directed as shall be necessary or appropriate
to effect the distribution of the Debentures to Holders of Securities upon
the occurrence of certain special events (as may be defined in the terms of
the Securities) arising from a change in law or a change in legal
interpretation or other specified circumstances pursuant to the terms of the
Securities.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
the Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Declaration or the Trust Indenture Act; provided,
however, that if a Debenture Event of Default has occurred and is continuing and
such event is attributable to the failure of the Sponsor to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a holder of
Preferred Securities may institute a legal proceeding directly for enforcement
of payment to such Holder of the principal of or interest on
33
26
the Debentures having a principal amount equal to the aggregate liquidation
amount of the Preferred Securities of such Holder (a "Direct Action") on or
after the respective due date specified in the Securities. In connection with
such Direct Action, the rights of the Holders of the Common Securities will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Sponsor to such Holder of Preferred Securities in such
Direct Action. In addition, if the Property Trustee fails to enforce its rights
under the Debentures (other than rights arising from an Event of Default
described in the immediately preceding sentence) after any Holder of Preferred
Securities shall have made a written request to the Property Trustee to enforce
such rights, such Holder of Preferred Securities may, to the fullest extent
permitted by law, institute a Direct Action to enforce the Property Trustee or
any other Person. Except as provided in the preceding sentences, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 5.06.
(g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if an Event of Default occurs and is continuing, the Property Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Property Trustee will act as Paying Agent and Registrar in both
London and New York to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the
34
27
Property Trustee at any time and a successor Paying Agent or additional Paying
Agents may be appointed at any time by the Property Trustee.
(i) Subject to this Section 3.08, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.06.
The Property Trustee must exercise the powers set forth in this Section
3.08 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.03, and the Property Trustee shall not take any action that
is inconsistent with the purposes and functions of the Trust set out in Section
3.03.
SECTION 3.09. Certain Duties and Responsibilities of the Property
Trustee. (a) The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and no implied covenants shall be read into this Declaration against
the Property Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.06), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the curing
or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this Declaration and
the Property Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations shall
35
28
be read into this Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; but in the case of
any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee, the
Property Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property Trustee, unless
it shall be proved that the Property Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers;
(v) the Property Trustee's sole duty with respect to the custody, safe
keeping and physical preservation of the Debentures and the Property Trustee
Account shall be to deal with such property in a similar manner as the
Property Trustee deals with similar property for its own account, subject to
the protections and limitations on liability afforded to the Property
36
29
Trustee under this Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuine ness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the Sponsor.
Money held by the Property Trustee need not be segregated from other funds
held by it except in relation to the Property Trustee Account maintained by
the Property Trustee pursuant to Section 3.08(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Property Trustee be
liable for the default or misconduct of the Administrative Trustees or the
Sponsor.
SECTION 3.10. Certain Rights of Property Trustee. (a) Subject to the
provisions of Section 3.09:
(i) the Property Trustee may rely conclusively and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Administrative Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad
37
30
faith on its part, request and rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by the
Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its choice or
other experts and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion, such counsel may be counsel to
the Sponsor or any of its Affiliates, and may include any of its employees.
The Property Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall have provided to the
Property Trustee security satisfactory to the Property Trustee, against the
costs, expenses (including its attorneys' fees and expenses) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested in writing by the
Property Trustee, provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
security, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the
38
31
Property Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the signature of
the Property Trustee or its agents alone shall be sufficient and effective
to perform any such action and no third party shall be required to inquire
as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration, both of
which shall be conclusively evidenced by the Property Trustee's or its
agent's taking such action;
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the
Property Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed
by it to be
39
32
authorized or within the discretion or rights or powers conferred upon
it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 3.11. Delaware Trustee. Notwithstanding any other provision of
this Declaration other than Section 5.02, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Administrative Trustees or the Property
Trustee described in this Declaration. Except as set forth in Section 5.02, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
SECTION 3.12. Execution of Documents. Unless otherwise determined by
the Administrative Trustees, and except as otherwise required by the Business
Trust Act, any Administrative Trustee is authorized to execute on behalf of the
Trust any documents that the Administrative Trustees have the power and
authority to execute pursuant to Section 3.06; provided that, the registration
statement referred to in Section 3.06(b)(i), including any amendments thereto,
shall be signed by a majority of the Administrative Trustees.
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor, and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or the
Securities.
40
33
Section 3.14. Duration of Trust. The Trust, unless terminated pursuant
to the provisions of Article VIII hereof, shall exist until March 17, 2034.
SECTION 3.15. Mergers. (a) The Trust may not consolidate, amalgamate,
merge with or into, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any corporation or other
entity or person, except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the Administrative
Trustees and without the consent of the Holders of the Securities, the Delaware
Trustee or the Property Trustee, consolidate, amalgamate, merge with or into, or
be replaced by a trust organized as such under the laws of any State or the
District of Columbia; provided that:
(i) if the Trust is not the surviving entity, the successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") as long as the Successor Securities rank, with
respect to participation in the profits and distributions or in the
assets of the Successor Entity at least as high as the Preferred
Securities rank with respect to participation in the profits and
dividends or in the assets of the Trust;
(ii) the Debenture Issuer expressly acknowledges such Successor Entity
as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of issuance, on
any national securities exchange or with any other organization on which the
Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Preferred Securities
41
34
(including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the powers, preferences and other special rights of the
Holders of the Preferred Securities (including any Successor Securities) in
any material respect;
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or replacement,
the Sponsor has received an opinion of a nationally recognized independent
counsel (reasonably acceptable to the Property Trustee) to the Trust
experienced in such matters to the effect that:
(A) the Successor Entity will be treated as a grantor trust
for United States federal income tax purposes;
(B) following such merger, consolidation, amalgamation or
replacement, neither the Sponsor nor the Successor Entity will be
required to register as an Investment Company; and
(C) such merger, consolidation, amalgamation or replacement
will not adversely affect the limited liability of the Holders of the
Securities (including any Successor Securities); and
(viii) the Sponsor provides a guarantee to the Holders of the Successor
Securities with respect to the Successor Entity having substantially the
same terms as the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Common Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as
42
35
other than a grantor trust for United States federal income tax purposes.
ARTICLE IV
Sponsor
SECTION 4.01. Sponsor's Purchase of Common Securities. On the Closing
Date and any Optional Closing Date the Sponsor will purchase an amount of Common
Securities issued by the Trust such that the aggregate liquidation amount of
such Common Securities purchased by the Sponsor shall at such date equal 3% of
the total capital of the Trust.
SECTION 4.02. Responsibilities of the Sponsor. In connection with the
issue and sale of the Preferred Securities, the Sponsor shall have the exclusive
right and responsibility to engage in the following activities:
(a) to prepare the Offering Circular and to prepare for filing by the
Trust with the Commission the Shelf Registration Statement, including any
amendments thereto;
(b) to determine the States and foreign jurisdictions in which to take
appropriate action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and prepare
for execution and filing any documents to be executed and filed by the Trust, as
the Sponsor deems necessary or advisable in order to comply with the applicable
laws of any such States and foreign jurisdictions;
(c) to prepare for filing by the Trust an application to PORTAL and to
the New York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing or quotation of the Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12 of the Exchange Act, including any amendments
thereto; and
43
36
(e) to negotiate the terms of the Purchase Agreement, Registration
Rights Agreement and other related agreements providing for the sale of the
Preferred Securities.
SECTION 4.03. Guarantee of Payment of Trust Obligations. (a) Subject to
the terms and conditions of this Section 4.03, the Sponsor hereby irrevocably
and unconditionally guarantees to each Person to whom the Trust is now or
hereafter becomes indebted or liable (the "Beneficiaries") the full payment,
when and as due, of any and all Obligations to such Beneficiaries.
(b) The agreement of the Sponsor in Section 4.03(a) is intended to be
for the benefit of, and to be enforceable by, all such Beneficiaries, whether or
not such Beneficiaries have received notice hereof.
(c) The agreement of the Sponsor set forth in Section 4.03(a) shall
terminate and be of no further force and effect upon the later of (a) the date
on which full payment has been made of all amounts payable to all Holders of all
the Preferred Securities (whether upon redemption, liquidation, exchange or
otherwise) and (b) the date on which there are no Beneficiaries remaining;
provided, however, that such agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any Holder of Preferred
Securities or any Beneficiary must restore payment of any sums paid under the
Preferred Securities, under any Obligation, under the Preferred Securities
Guarantee or under this Agreement for any reason whatsoever. Such agreement is
continuing, irrevocable, unconditional and absolute.
ARTICLE V
Trustees
SECTION 5.01. Number of Trustees. The number of Trustees shall
initially be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities:
44
37
(i) the number of Trustees may be increased or decreased, except as
provided in Sections 5.01(b)(ii) and 5.06(a)(ii)(B) with respect to the
Special Trustee, by vote of the Holders of a Majority in liquidation amount
of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; and
(ii) the number of Trustees shall be increased automatically by one (1)
if an Appointment Event has occurred and is continuing and the Holders of a
Majority in liquidation amount of the Preferred Securities appoint a Special
Trustee in accordance with Section 5.06(a)(ii).
SECTION 5.02. Delaware Trustee. If required by the Business Trust Act,
one Trustee (the "Delaware Trustee") shall be an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Property Trustee has its principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Property Trustee shall also be the Delaware Trustee
and Section 3.11 shall have no application.
SECTION 5.03. Property Trustee; Eligibility. (a) There shall at all
times be one Trustee which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Commission
to act as an institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then for the purposes
of this Section 5.03(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
45
38
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.03(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.06(e).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.04. Qualifications of Administrative Trustees and Delaware
Trustee Generally. Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.05. Initial Trustees. The initial Administrative Trustees
shall be:
L. White Matthews, III
c/o Union Pacific Corporation
1717 Main Street
Suite 5900
Dallas, Texas 75201-4605
Gary M. Stuart
c/o Union Pacific Corporation
1717 Main Street
Suite 5900
Dallas, Texas 75201-4605
Joseph E. O'Connor, Jr.
c/o Union Pacific Corporation
1717 Main Street
Suite 5900
Dallas, Texas 75201-4605
46
39
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Trustee Administration
The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
SECTION 5.06. Appointment, Removal and Resignation of Trustees. (a)
Except as provided otherwise in this Section 5.06(b), Trustees may be appointed
or removed with out cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities:
(A) other than in respect to a Special Trustee, by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common Securities,
unless a Debenture Event of Default shall have occurred and be
continuing, in which event the Property Trustee and the Delaware
Trustee may only be removed by the Holders of a Majority in liquidation
amount of the Preferred Securities, voting as a class at a meeting of
the Holders of the Preferred Securities; and
(B) if an Appointment Event has occurred and is continuing,
one (1) additional trustee (the "Special Trustee"), who shall have the
same rights, powers and privileges as an Administrative Trustee, may be
appointed by vote of the Holders of a Majority in liquidation amount of
the Preferred Securities, voting as a class at a meeting of the Holders
of the Preferred Securities, and such Special Trustee may only be
removed (otherwise than by the operation of Section 5.06(e)), by vote
of the Holders of a
47
40
Majority in liquidation amount of the Preferred Securities voting as a
class at a meeting of the Holders of the Preferred Securities.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.06(a) until a successor Property Trustee meeting the
requirements of Section 5.03 (a "Successor Property Trustee") has been appointed
and has accepted such appointment by written instrument executed by such
Successor Property Trustee and delivered to the Administrative Trustees and the
Sponsor.
(c) The Sponsor shall remove the Property Trustee by written instrument
upon:
(i) the entry or a decree or order by a court having jurisdiction in
the premises adjudging the Property Trustee as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Property Trustee under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Property Trustee or of any
substantial part of its property or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or order unstayed and
in effect for a period of 60 consecutive days; or
(ii) the institution by the Property Trustee of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the institution
of bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Property Trustee or of any substantial
part of its property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to be adjudicated a
bankrupt, or the taking of corporate action by the Property Trustee in
furtherance of any such action; or
48
41
The Sponsor shall appoint a Successor Property Trustee within 60 days of such an
event.
(d) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 5.06(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Trustees and the Sponsor.
(e) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation,
provided that a Special Trustee shall only hold office while an Appointment
Event is continuing and shall cease to hold office immediately after the
Appointment Event pursuant to which the Special Trustee was appointed and all
other Appointment Events cease to be continuing. Any Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities;
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee; and
49
42
(iii) no such resignation of a Special Trustee shall be
effective until the 60th day following delivery of the instrument of
resignation of the Special Trustee to the Sponsor and the Trust or such
later date specified in such instrument during which period the Holders
of the Preferred Securities shall have the right to appoint a successor
Special Trustee as provided in this Section 5.06.
(f) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.06.
(g) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.06 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation or removal, the resigning Property Trustee or Delaware
Trustee, resigning or being removed as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee or
Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
(h) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.07. Vacancies among Trustees. If a Trustee ceases to
hold office for any reason and the number of Trustees is not reduced pursuant to
Section 5.01, or if the number of Trustees is increased pursuant to Section
5.01, a vacancy shall occur. A resolution certifying the existence of such
vacancy by a majority of the Administrative Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.06.
SECTION 5.08. Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee shall not operate to annul the
Trust.
50
43
Whenever a vacancy in the number of Administrative Trustees shall occur, until
such vacancy is filled by the appointment of a Administrative Trustee in
accordance with Section 5.06, the Administrative Trustees in office, regardless
of their number, shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Declaration.
SECTION 5.09. Meetings. Meetings of the Administrative
Trustees shall be held from time to time upon the call of any Administrative
Trustee. Regular meetings of the Administrative Trustees may be held at a time
and place fixed by resolution of the Administrative Trustees. Notice of any
meetings of the Administrative Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile or overnight courier) not less than
24 hours before such meeting. Notices shall contain a brief statement of the
time, place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of a Administrative Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Administrative
Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Administrative Trustees may be taken at a meeting by vote of a majority of
the Administrative Trustees present (whether in person or by telephone) and
eligible to vote with respect to such matter, provided that a Quorum is present,
or without a meeting by the unanimous written consent of the Administrative
Trustees.
In the event there is only one Administrative Trustee, any and
all action of such Administrative Trustee shall be evidenced by a written
consent of such Administrative Trustee. In the event a Special Trustee is
holding office pursuant to Section 5.06, such Special Trustee shall have the
same rights as an Administrative Trustee with respect to participation in a
meeting of the Administrative Trustees.
SECTION 5.10. Delegation of Power. (a) Any Administrative
Trustee may, by power of attorney consistent with applicable law, delegate to
any other natural person over the age of 21 his or her power for the purpose of
executing any documents contemplated in Section 3.06, including any registration
statement or amendment thereto
51
44
filed with the Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
SECTION 5.11. Merger, Conversion, Consolidation or Succession
to Business. Any Person into which the Property Trustee or the Delaware Trustee,
as the case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Property Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Property Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
ARTICLE VI
Distributions
SECTION 6.01. Distributions. Holders shall receive
Distributions (as defined herein) in accordance with the applicable terms of the
relevant Holder's Securities. Distributions shall be made on the Preferred
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms. If and to the extent that the Debenture Issuer
makes a payment of interest (including Compounded Interest (as defined in the
Indenture) and Additional Sums (as defined in the Indenture)) premium and
principal on the Debentures held by the Property Trustee (the amount of any such
payment being a "Payment Amount"), the Property Trustee shall and is directed,
to the extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders.
52
45
ARTICLE VII
Issuance of Securities
SECTION 7.01. General Provisions Regarding Securities. (a) The
Administrative Trustees shall on behalf of the Trust issue one class of
convertible preferred securities, designated as 6 1/4% Convertible Preferred
Securities, Term Income Deferrable Equity Securities (TIDES)(sm), representing
undivided beneficial interests in the assets of the Trust (the "Preferred
Securities"), having such terms as are set forth in Annex I and one class of
convertible common securities, liquidation amount $50, representing undivided
beneficial interests in the assets of the Trust (the "Common Securities"),
having such terms as are set forth in Annex I. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities. The Trust shall issue no
Securities in bearer form.
(b) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable, subject to Section 10.01 with respect to the
Common Securities.
(d) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
SECTION 7.02. Execution and Authentication. (a) The Securities
shall be signed on behalf of the Trust by one Administrative Trustee. In case
any Administrative Trustee of the Trust who shall have signed any of the
Securities shall cease to be such Administrative Trustee before the Securities
so signed shall be delivered by the Trust, such Securities nevertheless may be
delivered as though the person who signed such Securities had not ceased to be
such Administrative Trustee; and any Securities may be
53
46
signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Administrative Trustee.
(b) One Administrative Trustee shall sign the Preferred
Securities for the Trust by manual or facsimile signature. Unless otherwise
determined by the Trust, such signature shall, in the case of Common Securities,
be a manual signature.
A Preferred Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Preferred Securities for
original issue by executing the Property Trustee's certificate of authentication
contained in the form of Preferred Securities attached hereto as Exhibit A-1.
The aggregate number of Preferred Securities outstanding at any time shall not
exceed the number set forth in the terms in Annex I hereto except as provided in
Section 7.06.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Preferred Securities. An authenticating
agent may authenticate Preferred Securities whenever the Property Trustee may do
so. Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Company or an Affiliate.
SECTION 7.03. Form and Dating. The Preferred Securities and
the Property Trustee's certificate of authentication shall be substantially in
the form of Exhibit A-1 and the Common Securities shall be substantially in the
form of Exhibit A-2, each of which is hereby incorporated in and expressly made
a part of this Declaration. Certificates may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by their execution thereof. The
Securities may have letters, numbers, notations or other marks of identification
or designation
54
47
and such legends or endorsements required by law, stock exchange rule,
agreements to which the Trust is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Trust). The
Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby.
The Preferred Securities are being offered and sold by the
Trust pursuant to a Purchase Agreement relating to the Preferred Securities,
dated March 27, 1998, among the Trust, the Sponsor and the Purchasers named
therein (the "Purchase Agreement").
(a) Global Securities. Preferred Securities offered and sold
to Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A under the
Securities Act ("Rule 144A") as provided in the Purchase Agreement, shall be
issued in the form of one or more permanent global Securities in definitive,
fully registered form without distribution coupons with the appropriate global
legends and Restricted Securities Legend set forth in Exhibit A-1 hereto (each,
a "Rule 144A Global Preferred Security"), which shall be deposited on behalf of
the purchasers of the Preferred Securities represented thereby with the Property
Trustee, at its New York office, as custodian for the Depositary, and registered
in the name of the Depositary or a nominee of the Depositary, duly executed by
the Trust and authenticated by the Property Trustee as provided herein. The
number of Preferred Securities represented by the Rule 144A Global Preferred
Security may from time to time be increased or decreased by adjustments made on
the records of the Property Trustee and the Depositary or its nominee as
hereinafter provided.
(b) Book-Entry Provisions. This Section 7.03(b) shall apply
only to the Rule 144A Global Preferred Securities and such other Preferred
Securities in global form as may be authorized by the Trust to be deposited with
or on behalf of the Depositary.
55
48
The Trust shall execute and the Property Trustee shall, in
accordance with this Section 7.03, authenticate and deliver initially one or
more Rule 144A Global Preferred Securities that (a) shall be registered in the
name of Cede & Co. or other nominee of such Depositary and (b) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
written instructions or held by the Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary
("Participants") shall have no rights under this Declaration with respect to any
Rule 144A Global Preferred Security held on their behalf by the Depositary or by
the Property Trustee as the custodian of the Depositary or under such Rule 144A
Global Preferred Security, and the Depositary may be treated by the Trust, the
Property Trustee and any agent of the Trust or the Property Trustee as the
absolute owner of such Rule 144A Global Preferred Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Property Trustee or any agent of the Trust or the Property Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its
Participants, the operation of customary practices of such Depositary governing
the exercise of the rights of a holder of a beneficial interest in any Rule 144A
Global Preferred Security.
(c) Certificated Securities. Except as provided in Section
7.03(d), owners of beneficial interests in the Rule 144A Global Preferred
Security will not be entitled to receive physical delivery of certificated
Preferred Securities. Preferred Securities offered and sold in reliance on
Regulation S, as provided in the Purchase Agreement, shall be issued initially
in the form of individual certificates in definitive, fully registered form
without distribution coupons and shall bear the Restricted Securities Legend
set forth in Exhibit A-1 hereto (the "Regulation S Definitive Preferred
Securities"). Purchasers of Preferred Securities who are institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) and did not purchase Preferred Securities in reliance on Rule
144A under the Securities Act will receive Preferred Securities in the form of
individual certificates in definitive, fully registered form without
distribution coupons and with the Restricted Securities Legend set forth in
Exhibit A-1 hereto ("IAI Definitive Preferred Securities"); provided, however,
that upon transfer of such IAI
56
49
Definitive Preferred Securities to a QIB, such IAI Definitive Preferred
Securities will, unless the Rule 144A Global Preferred Security has previously
been exchanged for a certificated Preferred Security pursuant to Section
7.03(d), be exchanged for an interest in a Rule 144A Global Security pursuant to
the provisions of Section 9.02. IAI Definitive Preferred Securities will bear
the Restricted Securities Legend set forth on Exhibit A-1 unless removed in
accordance with Section 9.02. Regulation S Definitive Preferred Securities shall
be in denominations of U.S. $1,000 and integral multiples thereof. IAI
Definitive Preferred Securities shall be in minimum denominations of $100,000
and increments of $1,000 in excess thereof.
(d) A Global Preferred Security deposited with the Depositary
or with the Property Trustee as custodian for the Depositary pursuant to this
Section 7.03 shall be transferred to the beneficial owners thereof in the form
of certificated Preferred Securities only if such transfer complies with Section
9.02 and (i) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Preferred Security or if at any time
such Depositary ceases to be a "clearing agency" registered under the Exchange
Act, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Trust in its sole discretion determines that such
Global Preferred Security shall be so exchangeable, or (iii) an Event of Default
has occurred and is continuing.
(e) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.03 shall be surrendered by the Depositary to the
Property Trustee located in the Borough of Manhattan, City of New York, to be so
transferred, in whole or from time to time in part, without charge, and the
Property Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Preferred Security, an equal aggregate liquidation amount
of Preferred Securities of authorized denominations in the form of certificated
Preferred Securities. Any portion of a Global Preferred Security transferred
pursuant to this Section shall be registered in such names as the Depositary
shall direct. Any Preferred Security in the form of certificated Preferred
Securities delivered in exchange for an interest in the Rule 144A Global
Preferred Security shall, except as otherwise
57
50
provided by Section 9.01, bear the Restricted Securities Legend set forth in
Exhibit A hereto.
(f) Subject to the provisions of Section 7.03(e), the
registered holder of a Global Preferred Security may grant proxies and otherwise
authorize any person, including Participants and persons that may hold interests
through Participants, to take any action which a holder is entitled to take
under this Declaration or the Securities.
(g) In the event of the occurrence of any of the events
specified in Section 7.03(d), the Trust will promptly make available to the
Property Trustee a reasonable supply of certificated Securities in definitive,
fully registered form without distribution coupons.
SECTION 7.04. Registrar, Paying Agent and Conversion Agent.
The Trust shall maintain in the Borough of Manhattan, City of New York, State of
New York and in the city of London, England (i) an office or agency where
Preferred Securities may be presented for registration of transfer or for
exchange ("Registrar"), (ii) an office or agency where Preferred Securities may
be presented for payment ("Paying Agent") and (iii) an office or agency where
Securities may be presented for conversion ("Conversion Agent"). The Registrar
shall keep a register of the Preferred Securities and of their transfer and
exchange. The Trust may appoint the Registrar, the Paying Agent and the
Conversion Agent and may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any additional
conversion agent. The Trust may change any Paying Agent, Registrar, co-registrar
or Conversion Agent without prior notice to any Holder. The Trust shall notify
the Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as
Registrar, Paying Agent or Conversion Agent, the Property Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent, Registrar, or
Conversion Agent. The Trust shall act as Paying Agent, Registrar, co-registrar,
and Conversion Agent for the Common Securities.
58
51
The Trust initially appoints the Property Trustee as
Registrar, Paying Agent, and Conversion Agent for the Preferred Securities.
SECTION 7.05. Paying Agent to Hold Money in Trust. The Trust
shall require each Paying Agent other than the Property Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or
the Property Trustee all money held by the Paying Agent for the payment of
principal or distribution on the Securities, and will notify the Property
Trustee if there are insufficient funds. While any such insufficiency continues,
the Property Trustee may require a Paying Agent to pay all money held by it to
the Property Trustee. The Trust at any time may require a Paying Agent to pay
all money held by it to the Property Trustee and to account for any money
disbursed by it. Upon payment over to the Property Trustee, the Paying Agent (if
other than the Trust or an Affiliate of the Trust) shall have no further
liability for the money. If the Trust or the Sponsor or an Affiliate of the
Trust or the Sponsor acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent.
SECTION 7.06. Replacement Securities. If the holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken
or if such Security is mutilated and is surrendered to the Trust or in the case
of the Preferred Securities to the Property Trustee, the Trust shall issue and
the Property Trustee shall authenticate a replacement Security if the Property
Trustee's and the Trust's requirements, as the case may be, are met. If required
by the Property Trustee or the Trust, an indemnity bond must be sufficient in
the judgment of both to protect the Trustees, the Property Trustee, the Sponsor
or any authenticating agent from any loss which any of them may suffer if a
Security is replaced. The Company may charge for its expenses in replacing a
Security.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, or is about to be purchased by
the Sponsor pursuant to Article III hereof, the Sponsor in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.
Every replacement Security is an additional obligation of the
Trust.
59
52
SECTION 7.07. Outstanding Preferred Securities. The Preferred
Securities outstanding at any time are all the Preferred Securities
authenticated by the Property Trustee except for those canceled by it, those
delivered to it for cancellation, and those described in this Section as not
outstanding.
If a Preferred Security is replaced, paid or purchased
pursuant to Section 7.06 hereof, it ceases to be outstanding unless the Property
Trustee receives proof satisfactory to it that the replaced, paid or purchased
Preferred Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with
the terms of this Declaration, they cease to be outstanding and interest on them
ceases to accrue.
A Preferred Security does not cease to be outstanding because
one of the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.08. Preferred Securities in Treasury. In determining
whether the Holders of the required amount of Securities have concurred in any
direction, waiver or consent, Preferred Securities owned by the Trust, the
Sponsor or an Affiliate of the Sponsor, as the case may be, shall be disregarded
and deemed not to be outstanding, except that for the purposes of determining
whether the Property Trustee shall be fully protected in relying on any such
direction, waiver or consent, only Securities which the Property Trustee knows
are so owned shall be so disregarded.
SECTION 7.09. Temporary Securities. Until definitive
Securities are ready for delivery, the Trust may prepare and, in the case of the
Preferred Securities, the Property Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Trust considers
appropriate for temporary Securities. Without unreasonable delay, the Trust
shall prepare and deliver to the Property Trustee Preferred Securities in
certificated form (other than in the case of Preferred Securities in global
form) and thereupon any or all temporary Preferred Securities (other than any
such Preferred Securities in global form) may be surrendered in exchange
therefor, at the office of the Registrar, and the Property Trustee shall
authenticate and deliver an equal aggregate liquidation amount of definitive
Preferred Securities in certificated
60
53
form in exchange for temporary Preferred Securities (other than any such
Preferred Securities in global form).
SECTION 7.10. Cancellation. The Trust at any time may deliver
Preferred Securities to the Property Trustee for cancellation. The Registrar,
Paying Agent and Conversion Agent shall forward to the Property Trustee any
Preferred Securities surrendered to them for registration of transfer,
redemption, conversion, exchange or payment. The Property Trustee shall promptly
cancel all Preferred Securities, surrendered for registration of transfer,
redemption, conversion, exchange, payment, replacement or cancellation and shall
return such canceled Preferred Securities to the Administrative Trustees. The
Trust may not issue new Preferred Securities to replace Preferred Securities
that it has paid or that have been delivered to the Property Trustee for
cancellation or that any holder has converted.
ARTICLE VIII
Termination of Trust
SECTION 8.01. Termination of Trust. (a) The Trust shall
terminate upon the earliest to occur of the following:
(i) the bankruptcy of the Holder of the Common
Securities or the Sponsor;
(ii) the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities or the
Sponsor; the filing of a certificate of cancellation with respect to
the Trust or the revocation of the charter of the Holder of the Common
Securities or the Sponsor and the expiration of 90 days after the date
of revocation without a reinstatement thereof;
(iii) the distribution of a Like Amount of Debentures to
Holders of the Securities in accordance with the terms of the
Securities;
(iv) all of the Securities shall have been called for
redemption and the amounts necessary for redemption
61
54
thereof shall have been paid to the Holders in accordance with the
terms of the Securities;
(v) the expiration of the term of the Trust on
March 17, 2034;
(vi) the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(vii) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities;
(viii) upon the distribution of the Common Stock (as defined
in the Indenture) of the Sponsor to Holders of all outstanding
Securities upon conversion of all such Securities; or
(ix) before the issuance of any Securities, with the consent
of all the Administrative Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an
event referred to in Section 8.01(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.09 and Article X shall survive
the termination of the Trust.
ARTICLE IX
Transfer and Exchange
SECTION 9.01. General. (a) Where Preferred Securities are
presented to the Registrar or a co-registrar with a request to register a
transfer or to exchange them for an equal number of Preferred Securities
represented by different certificates, the Registrar shall register the transfer
or make the exchange if its requirements for such transactions are met. To
permit registrations of transfers and exchanges, the Trust shall issue and the
Property Trustee shall authenticate Preferred Securities at the Registrar's
request.
62
55
(b) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
(c) The Administrative Trustees shall provide for the
registration of Securities and of transfers of Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Securities, the Administrative Trustees shall cause one or
more new Securities to be issued in the name of the designated transferee or
transferees. Every Security surrendered for registration of transfer shall be
accompanied by a written instrument of transfer in form satisfactory to the
Administrative Trustees duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Security surrendered for registration of
transfer shall be cancelled in accordance with Section 7.10. A transferee of a
Security shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Security. By
acceptance of a Security, each transferee shall be deemed to have agreed to be
bound by this Declaration.
63
56
(d) The Trust shall not be required (i) to issue, register the
transfer of, or exchange, Preferred Securities during a period beginning at the
opening of business 15 days before the day of any selection of Preferred
Securities for redemption set forth in the terms of the Securities as set forth
in Annex I hereto and ending at the close of business on the day of selection,
or (ii) to register the transfer or exchange of any Preferred Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Preferred Security being redeemed in part.
(e) All Preferred Securities issued upon any transfer or
exchange pursuant to the terms of this Declaration shall evidence the same
security and shall be entitled to the same benefits under this Declaration as
the Preferred Securities surrendered upon such transfer or exchange.
SECTION 9.02. Transfer Procedures and Restrictions. (a)
General. Subject to Sections 9.02(b) and 9.02(j)(iii), if Preferred Securities
are issued upon the transfer, exchange or replacement of Preferred Securities
bearing the Restricted Securities Legend set forth in Exhibit A-1 hereto, or if
a request is made to remove such Restricted Securities Legend on Preferred
Securities, the Preferred Securities so issued shall bear the Restricted
Securities Legend, or the Restricted Securities Legend shall not be removed, as
the case may be, unless there is delivered to the Trust and the Property Trustee
such satisfactory evidence, which may include an opinion of counsel licensed to
practice law in the State of New York, as may be reasonably required by the
Company, that (i) neither the legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of Rule 144A, Rule 144 or Regulation S under the Securities Act or (ii) that
such Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory evidence, the Property
Trustee, at the written direction of the Trust, shall authenticate and deliver
Preferred Securities that do not bear the Restricted Securities Legend.
(b) Transfers After Effectiveness of Shelf Registration
Statement. After the effectiveness of a Shelf Registration Statement for any
Preferred Securities, all requirements pertaining to Restricted Securities
Legends on any Preferred Security included within such Shelf
64
57
Registration Statement will cease to apply, and beneficial interests in a
Preferred Security in global form without Restricted Securities Legends will be
available to transferees of such Preferred Securities, upon exchange of the
transferring holder's Regulation S Definitive Preferred Security or IAI
Definitive Preferred Security or directions to transfer such Holder's beneficial
interest in the Rule 144A Global Preferred Security, as the case may be. After
the effectiveness of the Shelf Registration Statement, the Trust shall issue and
the Property Trustee shall authenticate a Preferred Security in global form
without the Restricted Securities Legend (the "Unrestricted Global Preferred
Security") to deposit with the Depositary to evidence transfers of (i)
beneficial interests from the Rule 144A Global Preferred Security, (ii) IAI
Definitive Preferred Securities and (iii) Regulation S Definitive Preferred
Securities.
(c) [Reserved]
(d) Transfer and Exchange of Definitive Preferred
Securities. When Definitive Preferred Securities are presented to the
Registrar or co-Registrar
(x) to register the transfer of such Definitive
Preferred Securities; or
(y) to exchange such Definitive Preferred Securities for an
equal number of Definitive Preferred Securities of another
denomination.
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trust and
the Registrar or co-registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing; and
(ii) in the case of Definitive Preferred Securities that are
Restricted Preferred Securities, are being transferred or exchanged (x)
pursuant to an effective registration statement under the Securities
Act or
65
58
(y) pursuant to, and in compliance with, clause (A) or (B)
below:
(A) if such Restricted Preferred Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, such Holder shall
deliver a certification to that effect (in the form set forth
on the reverse of the Preferred Security); or
(B) if such Restricted Preferred Securities are being
transferred pursuant to an exemption from registration in
accordance with Rule 144A, Regulation S or Rule 144 under the
Securities Act such Holder shall deliver: (i) a certification
to that effect (in the form set forth on the reverse of the
Preferred Security) and (ii) if the Trust or Registrar so
requests, evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the Restricted
Securities Legend.
Definitive Preferred Securities that are transferred to QIBs
in accordance with Rule 144A under the Securities Act must take delivery of
their interests in the Preferred Securities in the form of a beneficial interest
in the Rule 144A Global Preferred Security in accordance with Section 9.02(e).
(e) Restrictions on Transfer of a Definitive Preferred
Security for a Beneficial Interest in a Global Preferred Security. A Definitive
Preferred Security may not be exchanged for a beneficial interest in a Global
Preferred Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with:
(i) if such Definitive Preferred Security is an IAI Definitive
Preferred Security or a Regulation S Definitive Preferred Security,
certification, in the form set forth on the reverse of the Preferred
Security, that such Definitive Preferred Security is being transferred
to a QIB in accordance with Rule 144A under the Securities Act; and
66
59
(ii) whether or not such Definitive Preferred Security is an
IAI Definitive Preferred Security or a Regulation S Definitive
Preferred Security, written instructions directing the Property Trustee
to make, or to direct the Depositary to make, an adjustment on its
books and records with respect to such Global Preferred Security to
reflect an increase in the number of the Preferred Securities
represented by the Global Preferred Security,
then the Property Trustee shall cancel such Definitive Preferred Security and
cause, or direct the Depositary to cause, the aggregate number of Preferred
Securities represented by the Global Preferred Security to be increased
accordingly. If no Global Preferred Securities are then outstanding, the Trust
shall issue and the Property Trustee shall authenticate, upon written order of
any Administrative Trustee, an appropriate number of Preferred Securities in
global form.
(f) Transfer and Exchange of Global Preferred Securities. The
transfer and exchange of Global Preferred Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor.
(g) Transfer of a Beneficial Interest in a Global Preferred
Security for a Definitive Preferred Security.
(i) Upon the transfer of a beneficial interest in a Rule 144A
Global Preferred Security pursuant to Regulation S, subject to Section
9.02(b) the interest being transferred in the Global Preferred Security
may not continue to be held in book-entry form through the Depositary,
will be exchanged for a Definitive Preferred Security only and will
require the delivery by the transferee of a transfer certificate in the
form set forth in Exhibit A-1.
(ii) Definitive Preferred Securities issued in exchange for a
beneficial interest in a Global Preferred Security pursuant to this
Section 9.02(g) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions
from its Participants or indirect participants or otherwise, shall
instruct the Property
67
60
Trustee. The Property Trustee shall deliver such Preferred Securities
to the persons in whose names such Preferred Securities are so
registered in accordance with the instructions of the Depositary.
(h) Restrictions on Transfer and Exchange of Global Preferred
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in Section 7.03), a Global Preferred Security may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.
(i) [Reserved].
(j) Legend.
(i) Except as permitted by the following paragraph (iii), each
Preferred Security certificate evidencing the Global Preferred
Securities and the Definitive Preferred Securities (and all Preferred
Securities issued in exchange therefor or substitution thereof) shall
bear a legend (together, in the case of Regulation S Definitive
Preferred Securities and IAI Definitive Preferred Securities, the
legend set forth in the following paragraph (ii), the "Restricted
Securities Legend") in substantially the following form:
"EACH OF THE TIDES (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND EACH OF THE TIDES
AND ANY CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES ISSUED UPON EXCHANGE
FOR THE TIDES REPRESENTED HEREBY AND ANY COMMON STOCK ISSUABLE UPON
CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF EACH OF THE TIDES IS HEREBY NOTIFIED THAT THE SELLER
OF EACH OF THE TIDES MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF EACH OF THE TIDES AGREES FOR THE BENEFIT OF THE
ISSUER AND THE COMPANY THAT (A) EACH OF
68
61
THE TIDES AND ANY CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES OR COMMON
STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED STATES IN A
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF EACH OF THE TIDES FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii) In addition to the legend set forth in paragraph (i)
above, Preferred Securities initially sold (a) to non-U.S. persons
pursuant to Regulation S or (b) to institutional "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act), shall bear a legend in substantially the following form:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH REGISTRAR AND TRANSFER AGENT MAY
REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIED WITH
THE FOREGOING RESTRICTIONS."
(iii) Upon any sale or transfer of a Restricted Preferred
Security (including any Restricted Preferred Security represented by a
Global Preferred Security) pursuant to Rule 144 under the Securities
Act or an effective registration statement under the Securities Act the
Registrar shall permit the holder thereof to exchange such Restricted
Preferred Security for an interest in the Unrestricted Global Security.
(k) Cancellation or Adjustment of Global Preferred Security.
At such time as all beneficial interests in a Global Preferred Security have
either been
69
62
exchanged for Definitive Preferred Securities to the extent permitted by the
Declaration or redeemed, repurchased or cancelled in accordance with the terms
of this Declaration, such Global Preferred Security shall be returned to the
Depositary for cancellation or retained and cancelled by the Property Trustee.
At any time prior to such cancellation, if any beneficial interest in a Global
Preferred Security is exchanged for Definitive Preferred Securities, Preferred
Securities represented by such Global Preferred Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if it
is then the Securities Custodian for such Global Preferred Security) with
respect to such Global Preferred Security, by the Property Trustee or the
Securities Custodian, to reflect such reduction.
(l) [Reserved]
(m) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Preferred Security, a
Participant in the Depositary or other Person with respect to the
accuracy of the records of the Depositary or its nominee or of any
Participant thereof, with respect to any ownership interest in the
Preferred Securities or with respect to the delivery to any
Participant, beneficial owner or other Person (other than the
Depositary) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such Preferred
Securities. All notices and communications to be given to the Holders
and all payments to be made to Holders under the Preferred Securities
shall be given or made only to or upon the order of the registered
Holders (which shall be the Depositary or its nominee in the case of a
Global Preferred Security). The rights of beneficial owners in any
Global Preferred Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the
Depositary. The Property Trustee may conclusively rely and shall be
fully protected in relying upon information furnished by the Depositary
or agent thereof with respect to its Participants and any beneficial
owners.
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire
70
63
as to compliance with any restrictions on transfer imposed under this
Declaration or under applicable law with respect to any transfer of any
interest in any Preferred Security (including any transfers between or
among Depositary Participants or beneficial owners in any Global
Preferred Security) other than to require delivery of such certificates
and other documentation or evidence as are expressly required by, and
to do so if and when expressly required by, the terms of this
Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
SECTION 9.03. Deemed Security Holders. The Trustees may treat
the Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust, the Property Trustee, the Registrar or a
co-registrar shall have actual or other notice thereof.
SECTION 9.04. [Reserved]
SECTION 9.05. Notices to Clearing Agency. Whenever a notice or
other communication to the Preferred Security Holders is required under this
Declaration, the Administrative Trustees shall, in the case of any Global
Preferred Security, give all such notices and communications specified herein to
be given to the Preferred Security Holders to the Depositary, and shall have no
notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.06. Appointment of Successor Clearing Agency. If
the Depository elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Administrative Trustees may, in their
sole discretion, appoint a successor Clearing Agency with respect to such
Preferred Securities.
71
64
ARTICLE X
Limitation of Liability of
Holders of Securities, Trustees or Others
SECTION 10.01. Liability. (a) Except as expressly set forth in
this Declaration, the Securities Guarantees and the terms of the Securities the
Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for
all of the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.02. Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the
72
65
Trust and upon such information, opinions, reports or statements presented to
the Trust by any Person as to matters the Indemnified Person reasonably believes
are within such other Person's professional or expert competence and who has
been selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders of Securities
might properly be paid.
SECTION 10.03. Fiduciary Duty. (a) To the extent that, at law
or in equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
an Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or
73
66
term so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.04. Indemnification. (a) To the fullest extent
permitted by applicable law, the Debenture Issuer shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage, liability,
tax, penalty, expense or claim of any kind or nature whatsoever incurred by such
Indemnified Person by reason of the creation, operation or termination of the
Trust or any act or omission performed or omitted by such Indemnified Person in
good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts or
omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees and expenses) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Debenture Issuer prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Debenture Issuer
of an
74
67
undertaking by or on behalf of the Indemnified Person to repay such amount
if it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 10.4(a). The indemnification shall survive
the termination of this Declaration.
SECTION 10.05. Outside Businesses. Any Covered Person, the
Sponsor, the Delaware Trustee and the Property Trustee may engage in or possess
an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. None of the Sponsor, any Covered Person, the Delaware Trustee, or the
Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
Accounting
SECTION 11.01. Fiscal Year. The fiscal year ("Fiscal Year")
of the Trust shall be the calendar year, or such other year as is required by
the Code.
SECTION 11.02. Certain Accounting Matters. (a) At all times
during the existence of the Trust, the Administrative Trustees shall keep, or
cause to be kept, full books of account, records and supporting documents, which
shall reflect in reasonable detail, each transaction
75
68
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year by a firm of independent certified public accountants selected by the
Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss;
(c) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each Holder as
is required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Administrative
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Administrative Trustees on behalf of the Trust with
any state or local taxing authority.
SECTION 11.03. Banking. The Trust shall maintain one or more
bank accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Property Trustee shall be made directly to the Property Trustee Account and no
other funds of the Trust shall be deposited in the Property Trustee Account. The
sole signatories for such accounts shall be designated by the Administrative
Trustees; provided, however, that the Property Trustee shall designate the
signatories for the Property Trustee Account.
76
69
SECTION 11.04. Withholding. The Trust and the Administrative
Trustees shall comply with all withholding requirements under United States
federal, state and local law. The Trust shall request, and the Holders shall
provide to the Trust, such forms or certificates as are necessary to establish
an exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Administrative Trustee shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed overwithholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XII
Amendments and Meetings
SECTION 12.01. Amendments. (a) This Declaration may be amended
from time to time by the Sponsor, the Property Trustee and the Administrative
Trustees, without the consent of the Holders of the Securities, (i) to cure any
ambiguity, correct or supplement any provision in the Declaration that may be
inconsistent with any other provision, or to make any other provisions with
respect to ministerial matters or questions arising under the Declaration, which
shall not be inconsistent with the other provisions of the Declaration, or (ii)
to modify, eliminate or add to any provisions of the Declaration to such extent
as shall be necessary to ensure that the Trust will not be taxable as a
corporation or will be classified for United States federal income tax purposes
as a grantor trust at all times that any Securities are outstanding or to ensure
that the Trust will not be required to register as an "investment company" under
the Investment Company Act; provided, however, that in the case of clause (i),
such action shall
77
70
not adversely affect in any material respect the interests of any Holder of
Securities, and any amendments of the Declaration shall become effective when
notice thereof is given to the Holders of the Securities.
(b) Except as provided in (c) below, this Declaration may be
amended by the Trustees and the Company with (i) the consent of Holders
representing not less than a Majority in liquidation amount of the outstanding
Preferred Securities, and (ii) receipt by the Trustees of an opinion of counsel
to the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment will not affect the Trust's status as
a grantor trust for United States federal income tax purposes or the Trust's
exemption from status as an "investment company" under the Investment Company
Act.
(c) Without the consent of each holder of Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities of a specified
date or (ii) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.
SECTION 12.02. Meetings of the Holders of Securities; Action
by Written Consent. (a) Meetings of the Holders of any class of Securities may
be called at any time by the Administrative Trustees (or as provided in the
terms of the Securities) to consider and act on any matter on which Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange on
which the Preferred Securities are listed or admitted for trading. The
Administrative Trustees shall call a meeting of the Holders of such class if
directed to do so by the Holders of at least 25% in liquidation amount of such
class of Securities. Such direction shall be given by delivering to the
Administrative Trustees one or more requests in a writing stating that the
signing Holders of Securities wish to call a meeting and indicating the general
or specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of Securities exercising the right to call a meeting and only those
Securities represented by the Certificates so specified shall be counted for
purposes of determining whether the required
78
71
percentage set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any stock exchange on
which the Preferred Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing
setting forth the action so taken is signed by the Holders of
Securities owning not less than the minimum aggregate liquidation
amount of Securities that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders of Securities
entitled to vote who have not consented in writing. The Administrative
Trustees may specify that any written ballot submitted to the Holders
for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Administrative
Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as otherwise provided herein,
all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders
79
72
of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Administrative Trustees or by such other Person that
the Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Preferred Securities are then listed
or trading, provide otherwise, the Administrative Trustees, in their
sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place
or purpose of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
Representations of Property Trustee and Delaware Trustee
SECTION 13.01. Representations and Warranties of Property
Trustee. The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, at the
Closing Date and at each Optional Closing Date, if any, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly
80
73
authorized by all necessary corporate action on the part of the Property
Trustee. The Declaration has been duly executed and delivered by the Property
Trustee, and constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration
by the Property Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Property Trustee.
(d) No consent, approval or authorization of, or registration
with or notice to, any New York or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.
SECTION 13.02. Representations and Warranties of Delaware
Trustee. The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, at the
Closing Date and at each Optional Closing Date, if any, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.
(b) The execution, delivery and performance by the Delaware
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. The Declaration has been duly
executed and delivered by the Delaware Trustee, and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting
81
74
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration
by the Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Delaware Trustee.
(d) No consent, approval or authorization of, or registration
with or notice to, any Delaware or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(e) The Delaware Trustee is an entity which has its principal
place of business in the State of Delaware.
(f) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration.
ARTICLE XIV
Registration Rights
SECTION 14.01. Registration Rights. The Holders of the
Preferred Securities, the Debentures, the Preferred Securities Guarantee and the
shares of Common Stock of the Sponsor issuable upon conversion of the Securities
(collectively, the "Registrable Securities") are entitled to the benefits of a
Registration Rights Agreement. Pursuant to the Registration Rights Agreement the
Sponsor and the Trust have agreed for the benefit of the Holders of the
Registrable Securities that (i) they will, at the Sponsor's sole expense, prior
to May 1, 1998, file a shelf registration statement (the "Shelf Registration
Statement") with the Commission with respect to resales of the Registrable
Securities, (ii) they will use their best efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act prior
to July 30, 1998, and (iii) they will use their best efforts to maintain such
Shelf Registration Statement continuously effective under the Securities Act
(subject to certain exceptions under the Registration Rights Agreement) until
the second anniversary of the effectiveness of the Shelf Registration Statement
or such other period as shall be required under Rule 144(k) of the Securities
Act or any
82
75
successor rule or regulation thereto or such earlier date as is provided in the
Registration Rights Agreement. If the Sponsor fails to comply with either of
clauses (ii) or (iii) above, subject to certain exceptions provided in the
Registration Rights Agreement, (a "Registration Default") then, at such time,
the rate of Distributions on the Securities will increase by 50 basis points
(.50%) per annum. Such increase will remain in effect from and including the
date on which any such Registration Default shall occur to but excluding the
date on which all Registration Defaults have been cured on which date the rate
of Distributions on the Securities will revert to the rate of Distributions
originally borne by the Securities.
ARTICLE XV
Miscellaneous
SECTION 15.01. Notices. All notices provided for in this
Declaration shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set
83
76
forth below (or such other address as the Trust may give notice of to the
Holders of the Securities):
c/o Union Pacific Corporation
1717 Main Street
Suite 5900
Dallas, Texas 75201-4605
Attention: Chief Financial Officer
(b) if given to the Property Trustee, at the mailing address
set forth below (or such other address as the Property Trustee may give notice
of to the Holders of the Securities):
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Department
(c) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as the Delaware Trustee may give notice
of to the Holders of the Securities):
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
c/o Union Pacific Corporation
1717 Main Street
Suite 5900
Dallas, Texas 75201-4605
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust or the Registrar, as applicable.
84
77
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 15.02. Governing Law. This Declaration and the rights
of the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws. Sections 3540 and
3561 of Title 12 of the Delaware Code shall not apply to the Trust.
SECTION 15.03. Intention of the Parties. It is the intention
of the parties hereto that the Trust be classified for United States federal
income tax purposes as a grantor trust. The provisions of this Declaration shall
be interpreted to further this intention of the parties.
SECTION 15.04. Headings. Headings contained in this
Declaration are inserted for convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.
SECTION 15.05. Successors and Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed.
85
SECTION 15.06. Partial Enforceability. If any provision of
this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.
SECTION 15.07. Counterparts. This Declaration may contain more
than one counterpart of the signature page and this Declaration may be executed
by the affixing of the signature of each of the Trustees to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
as Trustee
________________________________
as Trustee
________________________________
as Trustee
________________________________
86
THE BANK OF NEW YORK
(DELAWARE), as Delaware Trustee
By:_____________________________
Name:
Title:
THE BANK OF NEW YORK, as
Property Trustee
By:_____________________________
Name:
Title:
87
UNION PACIFIC CORPORATION,
as Sponsor
By:_____________________________
Name:
Title:
88
1
TERMS OF
6 1/4% CONVERTIBLE PREFERRED SECURITIES
Term Income Deferable Equity Securities (TIDES(sm))
6 1/4% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated Declaration of
Trust, dated as of April 1, 1998 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or the Indenture (as defined in the
Declaration) or, if not defined in the Declaration or Indenture, as defined in
the Offering Circular (as defined in the Declaration):
1. Designation and Number.
(a) "Preferred Securities." 30,000,000 Preferred Securities of the Trust
with an aggregate liquidation preference with respect to the assets
of the Trust of One billion five hundred million Dollars
($1,500,000,000), and a liquidation amount with respect to the
assets of the Trust of $50 per Preferred Security, are hereby
designated for the purposes of identification only as "6 1/4%
Convertible Preferred Securities, Term Income Deferrable Equity
Securities (TIDES(sm))" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be
substantially in the form attached hereto as Exhibit A-1, with such
changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the
rules of any stock exchange or other organization on which the
Preferred Securities are listed.
(b) "Common Securities." 927,835 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust
of Forty-six million, three hundred and ninety-one thousand and
seven hundred and fifty Dollars ($46,391,750) and a liquidation
amount with respect to the assets of the Trust of $50 per Common
Security,
89
2
are hereby designated for the purposes of identification only as "6
1/4% Convertible Common Securities" (the "Common Securities"). The
Common Security Certificates evidencing the Common Securities shall
be substantially in the form attached hereto as Exhibit A-2, with
such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of 6 1/4% (the "Coupon Rate") of the stated liquidation amount
of $50 per Security, such rate being the rate of interest payable on
the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by
applicable law), subject to adjustment in the event of a
Registration Default, as described in the Declaration. The term
"Distributions" as used herein includes such quarterly
distributions, additional distributions on quarterly distributions
not paid on the applicable Distribution Date, Special Distributions
and Additional Sums, as applicable. A Distribution is payable only
to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee
has funds available therefor. The amount of Distributions payable
for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for
which Distributions are computed, Distributions will be computed on
the basis of the actual number of days elapsed per 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue from
the date of their original issuance and will be payable quarterly in
arrears, on the following dates, which dates correspond to the
interest payment dates on the Debentures: January 1, April 1, July 1
and October 1 of each year, commencing on July 1, 1998, except as
other-
90
3
wise described below. The Sponsor has the right under the Indenture
to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each a "Deferral Period") and, as
a consequence of such deferral, Distributions will also be deferred.
Despite such deferral, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded quarterly during any such
Deferral Period. Prior to three Business Days before a Regular
Record Date fixed for a Payment Resumption Date (as defined in the
Indenture), the Sponsor may further extend such Deferral Period;
provided that such Deferral Period together with all such previous
and further extensions thereof may not exceed 20 consecutive
quarters or extend beyond the maturity (whether at the stated
maturity or by declaration of acceleration, call for redemption or
otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the Regular Record Date for
the relevant Payment Resumption Date. Upon the termination of any
Deferral Period and the payment of all amounts then due, the Sponsor
may commence a new Deferral Period, subject to the above
requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the
close of business on the relevant record dates. The relevant record
dates shall be on the 15th of the month next preceding the relevant
payment dates, except as otherwise described in this Annex I to the
Declaration. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of
Preferred Securities being held in book-entry form through The
Depository Trust Company (the "Depositary") will be made as
described under the heading "Description of TIDES -- Form,
Book-Entry Procedures and Transfer" in the Offering Circular. The
relevant record dates for the Common Securities shall be the same
record dates as for the Preferred Securities. Distributions payable
on any Securities
91
4
that are not punctually paid on any Distribution payment date, as a
result of the Sponsor having failed to make a payment under the
Debentures, will cease to be payable to the Person in whose name
such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in
whose name such Securities are registered on the special record date
or other specified date determined in accordance with the Indenture.
If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such
date will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such
delay) except that, with respect to any Redemption Date, if such
Business Day is in the next succeeding calendar year, such
Redemption Date shall be the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Stock pursuant to the terms
of the Securities as forth in this Annex I to the Declaration, no
payment, allowance or adjustment shall be made with respect to
accumulated and unpaid Distributions on such Securities, or be
required to be made; provided that Holders of Securities at the
close of business on any record date for the payment of
Distributions will be entitled to receive the Distributions payable
on such Securities on the corresponding payment date notwithstanding
the conversion of such Securities into Common Stock following such
record date.
(e) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) among the Holders
of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Trust shall be liquidated by the Trustees as
expeditiously
92
5
as the Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to the
Holders of the Securities a Like Amount of Debentures, unless such distribution
would not be practical, in which event such Holders will be entitled to receive
out of the assets of the Trust available for distribution to holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to, in the case of holders of Preferred Securities, the
aggregate liquidation amount thereof plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the
Preferred Securities shall be paid on a Pro Rata (as defined below) basis in
accordance with paragraph 9. The Holder of the Common Securities will be
entitled to receive distributions upon any such liquidation Pro Rata with the
holders of the Preferred Securities, except as provided in paragraph 10.
4. Redemption and Distribution.
(a) Upon the repayment or payment of the Debentures in whole or in part,
whether at maturity or upon redemption or otherwise (other than
following any distribution of the Debentures to the Holders), the
proceeds from such repayment or redemption shall be simultaneously
applied to redeem, on a Pro Rata basis, a Like Amount of Securities,
on the redemption date, in an amount per Security equal to the
applicable redemption price, which redemption price will be equal to
(i) the liquidation amount of each of the Securities plus any
accrued and unpaid Distributions thereon (A) in the case of the
repayment of the Debentures at stated maturity, or (B) in the case
of a redemption of the Debentures in certain limited circumstances
set forth in the Indenture upon the occurrence of a Tax Event or
(ii) in the case of an Optional Redemption on or after April 10,
2001, the Optional Redemption Price (as defined in the Indenture),
payable in cash (as applicable, the "Redemption Price"). Holders
will be given not less than 30 (or, in the case of a redemption
pursuant to subparagraph (d) below, 20) nor more
93
6
than 60 days' notice of such redemption. Upon the repayment of the
Debentures at maturity or upon any acceleration, earlier redemption
or otherwise, the proceeds from such repayment will be applied to
redeem the Securities, in whole, upon not less than 30 nor more than
60 days' notice.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as
described in Paragraph 4(f)(ii) below.
(c) The Sponsor, as the Holder of the outstanding Common Securities,
shall have the right at any time (including, without limitation,
upon the occurrence of a Tax Event or Investment Company Act Event)
to terminate the Trust and, after satisfaction of the creditors of
the Trust, cause a Like Amount of the Debentures to be distributed
to the holders of the Securities upon liquidation of the Trust,
provided that the Administrative Trustees shall have received a No
Recognition Opinion (as defined below) prior to the liquidation of
the Trust; and provided further that, following such distribution of
the Debentures, the Company shall use its best efforts to maintain a
rating of such Debentures by any nationally recognized rating agency
for so long as any such Debentures are outstanding.
(d) If, at any time, a Tax Event shall occur and be continuing the
Sponsor shall cause the Administrative Trustees to liquidate the
Trust and, after satisfaction of creditors of the Trust, cause
Debentures to be distributed to the Holders of the Securities in
liquidation of the Trust within 90 days following the occurrence of
such Tax Event (the "90 Day Period"); provided, however, that such
liquidation and distribution shall be conditioned on (i) the
Trustees' receipt of an opinion of a nationally recognized
independent tax counsel (reasonably acceptable to the Trustees)
experienced in such matters (a "No Recognition Opinion"), which
opinion may rely on published revenue rulings of the Internal
Revenue Service, to the effect that the Holders of the Securities
will not recognize any income, gain or loss for
94
7
United States federal income tax purposes as a result of such
liquidation and distribution of Debentures, and (ii) the Sponsor
being unable to avoid such Tax Event within the 90 Day Period by
taking some ministerial action or pursuing some other reasonable
measure that, in the sole judgment of the Sponsor, will have no
adverse effect on the Trust, the Sponsor or the Holders of the
Securities and will involve no material cost ("Ministerial Action").
If (i) the Sponsor has received an opinion (a
"Redemption Tax Opinion") of a nationally recognized independent tax
counsel (reasonably acceptable to the Trustees) experienced in such
matters that, as a result of a Tax Event, there is more than an
insubstantial risk that the Sponsor would be precluded from
deducting the interest on the Debentures for United States federal
income tax purposes, even after the Debentures were distributed to
the Holders of Securities upon liquidation of the Trust as described
in this paragraph 4(d), or (ii) the Trustees shall have been
informed by such tax counsel that it cannot deliver a No Recognition
Opinion, the Sponsor shall have the right, upon not less than 20 nor
more than 60 days' notice, and within 90 days following the
occurrence of such Tax Event, to redeem the Debentures in whole (but
not in part) for cash, for the principal amount plus accrued and
unpaid interest thereon and, following such redemption, all the
Securities will be redeemed by the Trust at the liquidation amount
of $50 per Security plus accrued and unpaid Distributions thereon;
provided, however, that, if at the time there is available to the
Sponsor or the Trust the opportunity to eliminate, within the 90 Day
Period, the Tax Event by taking some Ministerial Action, the Trust
or the Sponsor will pursue such Ministerial Action in lieu of
redemption.
In lieu of the foregoing options, the Company shall also
have the option of causing the Securities to remain outstanding and
pay Additional Sums on the Debentures.
"Tax Event" means that the Property Trustee shall have
received an opinion of a
95
8
nationally recognized independent tax counsel to the Sponsor
(reasonably acceptable to the Trustees) experienced in such matters
(a "Dissolution Tax Opinion") to the effect that, as a result of
(a) any amendment to, or change (including any announced prospective
change (which shall not include a proposed change), provided that a
Tax Event shall not occur more than 90 days before the effective
date of any such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or
taxing authority therefor or therein, (ii) any judicial decision or
official administrative pronouncement, ruling, regulatory procedure,
notice or announcement, including any notice or announcement of
intent to adopt such procedures or regulations (an "Administrative
Action") or (iii) any amendment to or change in the administrative
position or interpretation of any Administrative Action or judicial
decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental
agency or regulatory body, irrespective of the manner in which such
amendment or change is made known, which amendment or change is
effective or such Administrative Action or decision is announced, in
each case, on or after the date of original issuance of the
Debentures or the issue date of the Preferred Securities issued by
the Trust, there is more than an insubstantial risk that (a) if the
Debentures are held by the Property Trustee, (I) the Trust is, or
will be within 90 days of the date of such opinion, subject to
United States federal income tax with respect to interest accrued or
received on the Debentures or subject to more than a de minimis
amount of other taxes, duties or other governmental charges as
determined by such counsel, or (II) any portion of interest payable
by the Sponsor to the Trust on the Debentures is not, or within 90
days of the date of such opinion will not be, deductible by the
Sponsor in whole or in part for United States federal income tax
purposes or (b) with respect to Debentures which are no longer held
by the Property Trustee, any portion of interest payable by the
Sponsor on the Debentures is not, or within 90 days of the date of
such opinion will not be, deductible by the
96
9
Sponsor in whole or in part for United States federal income tax
purposes.
If an Investment Company Event (as hereinafter defined)
shall occur and be continuing, the Sponsor shall cause the Trustees
to liquidate the Trust and cause the Debentures to be distributed to
the Holders of the Securities in liquidation of the Trust within 90
days following the occurrence of such Investment Company Event.
"Investment Company Event" means the occurrence of a
change in law or regulation or a written change in interpretation or
application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act
Law"), to the effect that the Trust is or will be considered an
Investment Company which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes
effective on or after the date of the Offering Circular.
After the date fixed for any distribution of
Debentures: (i) the Securities will no longer be deemed to be
outstanding, (ii) the Depositary or its nominee (or any successor
Depositary or its nominee), as record Holder of Preferred Securities
represented by global certificates, will receive a registered global
certificate or certificates representing the Debentures to be
delivered upon such distribution and (iii) any certificates
representing Securities, except for certificates representing
Preferred Securities held by the Depositary or its nominee (or any
successor Depositary or its nominee), will be deemed to represent
Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of such Securities, with accrued
and unpaid interest equal to accrued and unpaid Distributions on
such Securities until such certificates are presented to the
Sponsor or its agent for transfer or reissuance.
(e) The Securities will not be redeemed unless all accrued and unpaid
Distributions have been paid on all Securities for all quarterly
Distribution
97
10
periods terminating on or before the date of redemption.
(f) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a
"Redemption/Distribution Notice") will be given by the Trust
by mail to each Holder of Securities to be redeemed or
exchanged not fewer than 30 (or 20, in the case of redemption
or distribution upon the occurrence of a Tax Event) nor more
than 60 days before the date fixed for redemption or exchange
thereof which, in the case of a redemption, will be the date
fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this paragraph
4(f)(i), a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed by first-class
mail, postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in
the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity
of the redemption or exchange proceedings with respect to any
other Holder.
(ii) In the event that fewer than all the outstanding Securities
are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Preferred Securities, it
being understood that, in respect of Preferred Securities
registered in the name of and held of record by the Depositary
(or any successor Depositary) or any nominee, the distribution
of the proceeds of such redemption will be made to each
Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by such
agency or nominee.
98
11
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be
issued if the Debentures are redeemed as set out in this
paragraph 4 (which notice will be irrevocable), then (A) with
respect to Preferred Securities held in book-entry form, by
12:00 noon, New York City time, on the redemption date, to the
extent funds are available, with respect to Preferred
Securities held in global form, the Property Trustee will
deposit irrevocably with the Depositary (or successor
Depositary) funds sufficient to pay the amount payable on
redemption with respect to such Preferred Securities and will
give the Depositary irrevocable instructions and authority to
pay the amount payable on redemption to the Holders of such
Preferred Securities, and (B) with respect to Preferred
Securities issued in certificated form and Common Securities,
to the extent funds are available, the Property Trustee will
irrevocably deposit with the Paying Agent funds sufficient to
pay the amount payable on redemption to the Holders of such
Securities and will give the Paying Agent irrevocable
instructions and authority to pay the amount payable on
redemption to the Holders thereof upon surrender of their
certificates. If a Redemption/Distribution Notice shall have
been given and funds deposited as required, then on the date
of such deposit, all rights of Holders of such Securities so
called for redemption will cease, except the right of the
Holders of such Securities to receive the redemption price,
but without interest on such redemption price, and such
Securities will cease to be outstanding. Neither the
Administrative Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any
Securities that have been so called for redemption. If any
date fixed for redemption of Securities is not a Business Day,
then payment of the amount payable on such date will be made
on the next succeeding day that is a Business Day (without any
interest or other payment in respect of any such delay) except
that, if
99
12
such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on
such date fixed for redemption. If payment of the redemption
price in respect of any Securities is improperly withheld or
refused and not paid either by the Trust or by the Sponsor as
guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to accrue at
the then applicable rate, from the original redemption date to
the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes
of calculating the amount payable upon redemption (other than
for purposes of calculating any premium).
(iv) Redemption/Distribution Notices shall be sent by the
Administrative Trustees on behalf of the Trust to (A) in the
case of Preferred Securities held in book-entry form, the
Depositary and, in the case of Securities held in certificated
form, the Holders of such certificates and (B) in respect of
the Common Securities, the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws),
the Sponsor or any of its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
5. Conversion Rights.
The Holders of Securities shall have the right at any time, at their
option, to cause the Conversion Agent to convert Securities, on behalf of
the converting Holders, into shares of Common Stock, par value $2.50 per
share, of the Sponsor (the "Common Stock") in the manner described herein
on and subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and
100
13
nonassessable shares of Common Stock pursuant to the Holder's
direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held by the Trust on the basis
of one Security per $50 principal amount of Debentures, and
immediately convert such amount of Debentures into fully paid and
nonassessable shares of Common Stock at an initial rate of 0.7257
shares of Common Stock per $50 principal amount of Debentures (which
is equivalent to a conversion price of $68.90 per share of Common
Stock, subject to certain adjustments set forth in the Indenture (as
so adjusted, "Conversion Price")).
(b) In order to convert Securities into Common Stock the Holder shall
submit to the Conversion Agent at the office referred to above an
irrevocable request to convert Securities on behalf of such Holder
(the "Conversion Request"), together, if the Securities are in
certificated form, with such certificates. The Conversion Request
shall (i) set forth the number of Securities to be converted and the
name or names, if other than the Holder, in which the shares of
Common Stock should be issued and (ii) direct the Conversion Agent
(a) to exchange such Securities for a portion of the Debentures held
by the Trust (at the rate of exchange specified in the preceding
paragraph) and (b) to immediately convert such Debentures on behalf
of such Holder, into Common Stock (at the conversion rate specified
in the preceding paragraph). The Conversion Agent shall notify the
Trust of the Holder's election to exchange Securities for a portion
of the Debentures held by the Trust and the Trust shall, upon
receipt of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debentures for exchange in
accordance with this Section. The Conversion Agent shall thereupon
notify the Sponsor of the Holder's election to convert such
Debentures into shares of Common Stock. Holders of Securities at the
close of business on a Distribution record date will be entitled to
receive the Distribution payable on such Securities on the
corresponding Distribution payment date notwithstanding the
conversion of such Securities following such record date but prior
to
101
14
such distribution payment date. Except as provided above, neither
the Trust nor the Sponsor will make, or be required to make, any
payment, allowance or adjustment upon any conversion on account of
any accumulated and unpaid Distributions accrued on the Securities,
whether or not in arrears, (including any Additional Amounts accrued
thereon) surrendered for conversion, or on account of any
accumulated and unpaid dividends on the shares of Common Stock
issued upon such conversion, except to the extent that such shares
are held of record on the record date for any such distributions.
Securities shall be deemed to have been converted immediately prior
to the close of business on the day on which a Notice of Conversion
relating to such Securities is received by the Trust in accordance
with the foregoing provision (the "Conversion Date"). The Person or
Persons entitled to receive the Common Stock issuable upon
conversion of the Debentures shall be treated for all purposes as
the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the Conversion Date, the Sponsor
shall issue and deliver at the office of the Conversion Agent a
certificate or certificates for the number of full shares of Common
Stock issuable upon such conversion, together with the cash payment,
if any, in lieu of any fraction of any share to the Person or
Persons entitled to receive the same, unless otherwise directed by
the Holder in the notice of conversion and the Conversion Agent
shall distribute such certificate or certificates to such Person or
Persons.
(c) Each Holder of a Security by his acceptance thereof appoints The
Bank of New York "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In
effecting the conversion and transactions described in this
Section, the Conversion Agent shall be acting as agent of the
Holders of Securities directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debentures held by the
Trust in connection with the conversion of such Securities in
accordance with this Section and (ii) to convert
102
15
all or a portion of the Debentures into Common Stock and thereupon
to deliver such shares of Common Stock in accordance with the
provisions of this Section and to deliver to the Trust a new
Debenture or Debentures for any resulting unconverted principal
amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be
paid in cash by the Sponsor to the Trust, which in turn will make
such payment to the Holder or Holders of Securities so converted.
(e) The Sponsor shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other
similar rights, such number of shares of Common Stock as shall from
time to time be issuable upon the conversion of all the Debentures
then outstanding. Notwithstanding the foregoing, the Sponsor shall
be entitled to deliver upon conversion of Debentures, shares of
Common Stock reacquired and held in the treasury of the Sponsor (in
lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of
all liens, charges, security interests or encumbrances. Any shares
of Common Stock issued upon conversion of the Debentures shall be
duly authorized, validly issued and fully paid and nonassessable.
The Trust shall deliver the shares of Common Stock received upon
conversion of the Debentures to the converting Holder free and clear
of all liens, charges, security interests and encumbrances, except
for United States withholding taxes. Each of the Sponsor and the
Trust shall prepare and shall use its best efforts to obtain and
keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all
applicable requirements as to registration or qualification of the
Common Stock (and all requirements to list the Common Stock issuable
upon conversion of Debentures that are at the time applicable), in
order to enable the Sponsor to lawfully issue Common Stock to the
Trust upon conversion of the
103
16
Debentures and the Trust to lawfully deliver the Common Stock to
each Holder upon conversion of the Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on
conversion of Debentures and the delivery of the shares of Common
Stock by the Trust upon conversion of the Securities. The Sponsor
shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which the
Securities so converted were registered, and no such issue or
delivery shall be made unless and until the person requesting such
issue has paid to the Trust the amount of any such tax, or has
established to the satisfaction of the Trust that such tax has been
paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the
Securities set forth in this Annex I to the Declaration or in the
Declaration itself or otherwise require the Property Trustee or the
Trust to pay any amounts on account of such withholdings.
6. Voting Rights - Preferred Securities.
(a) Except as provided under paragraphs 6(b) and 8, in the Business
Trust Act and as otherwise required by law, the Declaration and the
Indenture, the Holders of the Preferred Securities will have no
voting rights.
(b) In addition to the rights of the Holders of the Preferred Securities
with respect to the enforcement of payment of principal and interest
on the Debentures set forth herein, in the Declaration or in the
Indenture, if (i) a Debenture Event of Default occurs and is
continuing or (ii) the Company defaults under the Guarantee (each of
(i) and (ii) being an "Appointment Event"), then the Holders of the
Preferred Securities, acting as a single class, will be entitled by
the vote of a Majority in liquidation amount of the Preferred
Securities to appoint a
104
17
Special Trustee in accordance with Section 5.06(a)(ii)(B) of the
Declaration. Any Holder of Preferred Securities (other than the
Sponsor, or any entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Sponsor) will be entitled to nominate any person to be appointed as
Special Trustee. Not later than 30 days after such right to appoint
a Special Trustee arises, the Trustees will convene a meeting for
the purpose of appointing a Special Trustee. If the Trustees fail
to convene such meeting within such 30-day period, the Holders of
not less than 10% in aggregate liquidation amount of the Preferred
Securities will be entitled to convene such meeting in accordance
with Section 12.02 of the Declaration. The record date for such
meeting will be the close of business on the Business Day that is
one Business Day before the day on which notice of the meeting is
sent to the Holders. The provisions of the Declaration relating to
the convening and conduct of the meetings of the Holders will apply
with respect to any such meeting.
Any Special Trustee so appointed shall cease to be a Special Trustee
if the Appointment Event pursuant to which the Special Trustee was
appointed and all other Appointment Events cease to be continuing. A
Special Trustee may be removed without cause at any time by vote of
the Holders of a Majority in liquidation amount of the Preferred
Securities at a meeting of the Holders of the Preferred Securities
in accordance with Section 5.06(a)(ii)(B) of the Declaration. The
Holders of 10% in liquidation amount of the Preferred Securities
will be entitled to convene such a meeting in accordance with
Section 12.02 of the Declaration. The record date for such meeting
will be the close of business on the Business Day which is one
Business Day before the day on which the notice of meeting is sent
to Holders. Notwithstanding the appointment of a Special Trustee,
the Sponsor shall retain all rights under the Indenture, including
the right to defer payments of interest by extending the interest
payment period on the Debentures.
105
18
Subject to the requirements set forth in this paragraph, the Holders
of a majority in liquidation amount of the Preferred Securities,
voting separately as a class may, and the Trustees shall not,
without obtaining the prior approval of the Holders of a Majority in
aggregate liquidation amount of all outstanding Preferred Securities
(i) direct the time, method, and place of conducting any proceeding
for any remedy available to the Trustee under the Indenture, or
executing any trust or power conferred upon the Property Trustee
with respect to the Debentures, (ii) waive any past default and its
consequences that is waiveable under Section 5.13 of the Indenture
or otherwise, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due
and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent
shall be required, provided, however, that, where a consent under
the Indenture would require the consent or act of the Holders of
greater than a majority of the Holders in principal amount of
Debentures affected thereby (a "Super Majority"), the Property
Trustee may only give such consent or take such action at the
direction of the Holders of at least the proportion in liquidation
preference of the Preferred Securities which the relevant Super
Majority represents of the aggregate principal amount of the
Debentures outstanding. The Property Trustee shall not, and none of
the other Trustees shall in any event, revoke any action previously
authorized or approved by a vote of the Holders of the Preferred
Securities, except by a subsequent vote of the Holders of the
Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Property
Trustee or the Debenture Trustee as set forth above, the Property
Trustee shall not take any action in accordance with the directions
of the Holders of the Preferred Securities under this paragraph
unless the Property Trustee has obtained an opinion of tax counsel
to the effect that, as a result of such action, the Trust will not
fail to be classified as a grantor trust for United States federal
income tax purposes.
106
19
If a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of the Debenture Issuer to
pay interest or principal on the Debentures on the date such
interest or principal is otherwise payable (or in the case of
redemption on the redemption date), then a Holder of Preferred
Securities may directly institute a proceeding for enforcement of
payment to such Holder (a "Direct Action") of the principal of or
interest on the Debentures having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such
Holder on or after the respective due date specified in the
Debentures. Except as provided in the preceding sentence, the
Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the Holders of the
Debentures. In connection with any Direct Action, the Debenture
Issuer will be subrogated to the rights of such Holder of Preferred
Securities under the Declaration to the extent of any payment made
by the Debenture Issuer to such Holder of Preferred Securities in
such Direct Action. In addition, the Holders of at least 25% in
aggregate liquidation preference of Preferred Securities outstanding
shall have the right to institute suit on behalf of the Trust for
the enforcement of the right to receive payment of the principal of
and interest on the Debentures on or after the Stated Maturity (as
defined in the Indenture) of such Debentures or, in the case of
redemption, on the Redemption Date (as defined in the Indenture), in
the event the Debenture Trustee or the Property Trustee fails to do
so in accordance with the terms of the Indenture.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of
Securities in the Trust or pursuant to written consent. The
Administrative Trustees will cause a notice of any meeting at which
Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Preferred
Securities. Each such notice will include a statement setting forth
107
20
the following information (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of proxies
or consents.
No vote or consent of the Holders of the Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities
or to distribute the Debentures in accordance with the Declaration
and the terms of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled
to vote or consent under any of the circumstances described above,
any of the Preferred Securities that are owned by the Sponsor or any
Affiliate of the Sponsor shall not be entitled to vote or consent
and shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
7. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 7(b), (c) and 8, in the Business
Trust Act and as otherwise required by law and the Declaration, the
Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee, subject to the exclusive right of the Holders
of the Preferred Securities to appoint, remove or replace a Special
Trustee.
(c) Subject to Section 2.06 of the Declaration and only after the Event
of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of
the second to last sentence of this paragraph, the Holders of a
Majority in liquidation amount of the Common Securities, voting
separately as a class, may direct the time, method, and place of
conducting any proceeding for
108
21
any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method, place of
conducting any proceeding for any remedy available to the Debenture
Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default
and its consequences that is waiveable under Section 5.13 of the
Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due
and payable, provided that, where a consent or action under the
Indenture would require the consent or act of the Holders of greater
than a majority in principal amount of Debentures affected thereby
(a "Super Majority"), the Property Trustee may only give such
consent or take such action at the direction of the Holders of at
least the proportion in liquidation amount of the Common Securities
which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Pursuant to this
paragraph 7(c), the Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Preferred Securities, except by a subsequent vote of the Holders of
the Preferred Securities. Other than with respect to directing the
time, method and place of conducting any remedy available to the
Property Trustee or the Debenture Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the
directions of the Holders of the Common Securities under this
paragraph unless the Property Trustee has obtained an opinion of tax
counsel to the effect that, as a result of such action the Trust
will not fail to be classified as a grantor trust for United States
federal income tax purposes. If the Property Trustee fails to
enforce its rights, as holder of the Debentures, under the
Indenture, any Holder of Common Securities may, after a period of 30
days has elapsed from such Holder's written request to the Property
Trustee to enforce such rights, institute a legal proceeding
directly against the Sponsor, to enforce the Property Trustee's
rights, as holder of the Debentures, under the Indenture,
109
22
without first instituting any legal proceeding against the Property
Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened
for such purpose, at a meeting of all of the Holders of Securities
in the Trust or pursuant to written consent. The Administrative
Trustees will cause a notice of any meeting at which Holders of
Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Common Securities. Each such
notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting
on which such Holders are entitled to vote or of such matter upon
which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and
the terms of the Securities.
8. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.01 of the
Declaration, if any proposed amendment to the Declaration provides
for, or the Administrative Trustees otherwise propose to effect, (i)
any action that would adversely affect the powers, preferences or
rights of the Securities, whether by way of amendment to the
Declaration or otherwise, or (ii) the dissolution, winding-up or
termination of the Trust, other than as described in Section 8.01 of
the Declaration, then the Holders of outstanding Securities will be
entitled to vote on such amendment or proposal (but not on any other
amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a
Majority in liquidation amount of the Securities, voting together as
a single class,
110
23
provided, however, that, the rights of Holders of Preferred
Securities under Article V of the Declaration to appoint, remove or
replace a Special Trustee shall not be amended without the consent
of each Holder of Preferred Securities; and provided further that if
any amendment or proposal referred to in clause (i) above would
adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of at least a Majority in
liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee as the holder of
the Debentures is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the
Debentures, the Property Trustee shall request the direction of the
Holders of the Securities with respect to such amendment,
modification or termination and shall vote with respect to such
amendment, modification or termination as directed by at least the
same proportion in aggregate stated liquidation preference of the
Securities; provided, however, that the Property Trustee shall not
take any action in accordance with the directions of the Holders of
the Securities under this paragraph 8(b) unless the Property Trustee
has obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
9. Pro Rata.
A reference in these terms of the Securities to any payment,
Distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, on any Distribution Date or redemption date
an Event of Default under the Declaration has occurred and is continuing, in
which case no payment of any Distribution on, or amount payable upon redemption
of, any Common Security, and no
111
24
other payment on account of the redemption, liquidation or other acquisition of
Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all outstanding Preferred Securities for
all Distribution periods terminating on or prior thereto, or in the case of
payment of the amount payable upon redemption of the Preferred Securities, the
full amount of such amount in respect of all outstanding Preferred Securities
shall have been made or provided for, and all funds available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions on, or the amount payable upon redemption of Preferred Securities
then due and payable.
10. Ranking.
The Preferred Securities rank pari passu and payment thereon shall
be made Pro Rata with the Common Securities except that, where an Event of
Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.
11. Acceptance of Securities Guarantees and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture which
are incorporated by reference herein and which include, among other things,
provisions relating to certain rights of the Holders of the Preferred Securities
all as set forth therein.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
112
25
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
113
EXHIBIT A-1
FORM OF
PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include the following Restricted Securities Legend on all
Restricted Preferred Securities, including Rule 144A Global Preferred
Securities, Regulation S Definitive Preferred Securities and IAI Definitive
Preferred Securities unless otherwise determined by the Sponsor in accordance
with applicable law -- EACH OF THE TIDES (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND EACH OF THE TIDES AND ANY
CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES ISSUED UPON EXCHANGE FOR THE TIDES
REPRESENTED HEREBY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF EACH OF THE TIDES IS HEREBY
NOTIFIED THAT THE SELLER OF THE TIDES MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF EACH OF THE TIDES AGREES FOR THE BENEFIT OF THE ISSUER
AND THE COMPANY THAT (A) EACH OF THE TIDES AND ANY CONVERTIBLE JUNIOR
SUBORDINATED DEBENTURES OR COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (ii) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.]
[Include if Preferred Security is Regulation S Restricted Definitive
Preferred Security or an IAI Definitive Preferred Security -- IN CONNECTION WITH
ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE
TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]
[Include if Preferred Security is in global form and the Depository
Trust Company is the Depository -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INAS-
114
2
MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include if Preferred Security is in global form -- TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]
Certificate Number Number of Preferred Securities
[CUSIP NO. [ ]]
[ISIN NO. [ ]]
Preferred Securities
of
Union Pacific Capital Trust
6 1/4% Convertible Preferred Securities
Term Income Deferrable Equity Securities (TIDES)(SM)*
(liquidation amount $50 per Convertible Preferred Security)
Union Pacific Capital Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
________________________________________________________________________________
(the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 6 1/4% Convertible Preferred Securities, Term Income Deferrable
Equity Securities (TIDES)(sm)*(liquidation amount $50 per Convertible Preferred
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of April 1, 1998, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The
- --------
*The terms Term Income Deferrable Equity Securities (TIDES)(sm) and TIDES(sm)
are registered servicemarks of Credit Suisse First Boston Corporation.
115
3
Sponsor will provide a copy of the Declaration, the Preferred Securities
Guarantee and the Indenture to a Holder without charge upon written request to
the Trust at its principal place of business.
Reference is hereby made to select provisions of the Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the
Preferred Securities as evidence of indirect beneficial ownership in the
Debentures.
Unless the Property Trustee's Certificate of Authentication hereon
has been properly executed, these Preferred Securities shall not be entitled to
any benefit under the Declaration or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate this 1st
day of April, 1998.
Union Pacific Capital Trust
By:________________________
Name:
Title:
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated:___________,____
THE BANK OF NEW YORK,
as Property Trustee
By: ______________________
Authorized Signatory
116
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of 6 1/4% (the "Coupon Rate") of the stated liquidation amount of
$50 per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such quarterly distributions, additional
distributions on quarterly distributions not paid on the applicable Distribution
Date, Special Distributions and Additional Sums, as applicable. A Distribution
is payable only to the extent that payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Property Trustee
has funds available therefor. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period on the basis of a
360-day year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of their original
issuance and will be payable quarterly in arrears, on January 1, April 1, July 1
and October 1 of each year, commencing on July 1, 1998, to Holders of record at
the close of business on the 15th of the month next preceding the applicable
payment date, which payment dates shall correspond to the interest payment dates
(each an "Interest Payment Date") on the Debentures. The Debenture Issuer has
the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each a "Deferral Period") and, as a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Deferral Period. Prior to the termination of any such
Deferral Period, the Debenture Issuer may further extend such Deferral Period;
provided that such Deferral Period together with all such previous and further
deferrals thereof may not exceed 20 consecutive quarters or extend beyond the
maturity (whether at the stated maturity or by declaration of acceleration, call
for redemption or otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable on an Interest Payment Date elected by the
Company to Holders as they appear on the books and records of the Trust on the
record date fixed for such Interest Payment Date. Upon the termination of any
Deferral Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Deferral Period, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
The Preferred Securities shall be convertible into shares of Common
Stock, through (i) the exchange of Preferred Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.
117
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
Union Pacific Capital Trust
The undersigned owner of these Preferred Securities hereby
irrevocably exercises the option to convert these Preferred Securities, or the
portion below designated, into Common Stock of UNION PACIFIC CORPORATION (the
"Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (the "Declaration"), dated as of April 1, 1998, by L. White
Matthews, III, Gary M. Stuart and Joseph E. O'Connor, Jr. as Administrative
Trustees, The Bank of New York (Delaware), as Delaware Trustee, The Bank of New
York, as Property Trustee, Union Pacific Corporation, as Sponsor, and by the
Holders, from time to time, of individual beneficial interests in the Trust to
be issued pursuant to the Declaration. Pursuant to the aforementioned exercise
of the option to convert these Preferred Securities, the undersigned hereby
directs the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Preferred Securities for a portion of the Debentures (as that term
is defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into Common Stock (at the conversion rate specified in the terms
of the Preferred Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
118
2
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Declaration and the Preferred Securities, agrees to be
bound by the terms of the Registration Rights Agreement relating to the Common
Stock issuable upon conversion of the Preferred Securities.
Date: ____________, ____
in whole __ in part __
Number of Preferred Securities to be
converted: ___________________
If a name or names other than the
undersigned, please indicate in the spaces
below the name or names in which the shares
of Common Stock are to be issued, along with
the address or addresses of such person or
persons
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identifying
Number
__________________________________________________
__________________________________________________
__________________________________________________
Signature Guarantee:**____________________________
___________
** (Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
119
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Preferred Security on the books of the Trust. The
agent may substitute another to act for him or her.
Date:_______________________
Signature:__________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee:***
___________
*** (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer
Agents Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Registrar in addition
to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
120
2
---------------------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
PREFERRED SECURITIES
This certificate relates to _____________ Preferred Securities held in (check
applicable space) ____ book-entry or ____ definitive form by the undersigned.
(A) The undersigned (check one box below):
[ ] has requested the Property Trustee by written order to deliver in
exchange for its beneficial interest in the Rule 144A Global Preferred
Security held by the Depositary a Preferred Security or Preferred
Securities in definitive, registered form in such number equal to its
beneficial interest in such Rule 144A Global Preferred Security (or the
number thereof indicated above); or
[ ] has requested the Property Trustee by written order to exchange its
Preferred Security in definitive registered form for an interest in the
Rule 144A Global Preferred Security held by the Depositary in such number
equal to number of Preferred Securities in definitive registered form so
held; or
[ ] has requested the Property Trustee by written order to exchange or
register the transfer of a Preferred Security or Preferred Securities.
(B) The undersigned confirms that such Securities are being (check one box
below):
(1) [ ] acquired for the undersigned's own account, without transfer
(in satisfaction of Section 9.02(d)(ii)(A) of the
Declaration); or
(2) [ ] transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(3) [ ] transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(4) [ ] transferred pursuant to Rule 144 of the Securities Act of
1933; or
(5) [ ] transferred pursuant to an effective registration statement
under the Securities Act.
Unless one of the boxes in (B) above is checked, the Property Trustee will
refuse to register any of the Preferred Securities evidenced by this certificate
in the name of any person other than the registered Holder thereof; provided,
however, that if box (3) or (4) is checked, the Property Trustee may require,
prior to registering any such transfer of the Preferred Securities such legal
opinions, certifications and other information as the Trust has reasonably
requested to confirm that
121
3
such transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act of 1933,
such as the exemption provided by Rule 144 under such Act.
____________________________
Signature
Signature Guarantee:****
____________________________ ____________________________
Signature must be guaranteed Signature
________________________________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing these
Preferred Securities for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Trust as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:____________________ ____________________________________________
NOTICE: To be executed by an executive
officer
_______________
**** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
122
EXHIBIT A-2
FORM OF
COMMON SECURITY
[FORM OF FACE OF SECURITY]
[THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE REGISTRATION
STATEMENT.]
[OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF UNION PACIFIC CORPORATION.]
Certificate Number Number of Common Securities
Common Securities
of
Union Pacific Capital Trust
6 1/4% Convertible Common Securities
(liquidation amount $50 per Convertible Common Security)
Union Pacific Capital Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
________________________________________________________________________________
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 6 1/4% Convertible Common Securities (liquidation amount $50 per
Convertible Common Security) (the "Common Securities"). The Common Securities
are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of April 1,
1998, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
123
Reference is hereby made to select provisions of the Common
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States federal
income tax purposes the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this 1st
day of April, 1998.
Union Pacific Capital Trust
By:____________________________
Name:
Title:
124
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a
rate per annum of 6 1/4% (the "Coupon Rate") of the stated liquidation amount of
$50 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes quarterly distributions, additional
distributions on quarterly distributions not paid on the applicable Distribution
Date, Special Distributions and Additional Sums, as applicable. A Distribution
is payable only to the extent that payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Property Trustee
has funds available therefor. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period on the basis of a
360-day year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of their original
issuance and will be payable quarterly in arrears, on January 1, April 1, July 1
and October 1 of each year, commencing on July 1, 1998, to Holders of record one
(1) day prior to such payment dates, which payment dates shall correspond to the
interest payment dates (each, an "Interest Payment Date") on the Debentures. The
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debentures
for a period not exceeding 20 consecutive quarters (each a "Deferral Period")
and, as a consequence of such deferral, Distributions will also be deferred.
Despite such deferral, quarterly Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly during any such Deferral Period. Prior to the termination
of any such Deferral Period, the Debenture Issuer may further extend such
Deferral Period; provided that such Deferral Period together with all such
previous and further deferrals thereof may not exceed 20 consecutive quarters or
extend beyond the maturity (whether at the stated maturity or by declaration of
acceleration, call for redemption or otherwise) of the Debentures under the
Indenture. Payments of accrued Distributions will be payable on an Interest
Payment Date elected by the Company to Holders as they appear on the books and
records of the Trust on the record date fixed for such Interest Payment Date.
Upon the termination of any Deferral Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Deferral Period, subject to the
above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
The Common Securities shall be convertible into shares of Common
Stock, through (i) the exchange of Common Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.
125
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
Union Pacific Capital Trust
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of UNION PACIFIC CORPORATION (the "Common Stock")
in accordance with the terms of the Amended and Restated Declaration of Trust
(the "Declaration"), dated as of April 1, 1998, by L. White Mathews, III, Gary
M. Stuart and Joseph E. O'Connor, Jr., as Administrative Trustees, The Bank of
New York (Delaware), as Delaware Trustee, The Bank of New York, as Property
Trustee, Union Pacific Corporation, as Sponsor, and by the Holders, from time to
time, of individual beneficial interests in the Trust to be issued pursuant to
the Declaration. Pursuant to the aforementioned exercise of the option to
convert these Common Securities, the undersigned hereby directs the Conversion
Agent (as that term is defined in the Declaration) to (i) exchange such Common
Securities for a portion of the Debentures (as that term is defined in the
Declaration) held by the Trust (at the rate of exchange specified in the terms
of the Common Securities set forth as Annex I to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the Common Securities
set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
126
2
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Declaration and the Common Securities, agrees to be bound
by the terms of the Registration Rights Agreement relating to the Common Stock
issuable upon conversion of the Common Securities.
Date: ____________, ____
in whole __ in part __
Number of Common Securities to be
converted: _____________________
If a name or names other than the
undersigned, please indicate in the spaces
below the name or names in which the shares
of Common Stock are to be issued, along with
the address or addresses of such person or
persons
___________________________________________
___________________________________________
___________________________________________
___________________________________________
___________________________________________
___________________________________________
___________________________________________
Signature (for conversion only)
Please Print or Typewrite Name
and Address, Including Zip
Code, and Social Security or
Other Identifying Number
____________________________________________
____________________________________________
____________________________________________
Signature Guarantee:*_______________________
________________
* (Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
127
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
____________________________________ agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee**: _____________________________________________________
_______________
** (Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)