AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 13, 1999
REGISTRATION NO. 333-78447
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CENDANT CORPORATION DELAWARE 06-0918165
CENDANT CAPITAL II DELAWARE 22-3565321
CENDANT CAPITAL III DELAWARE 22-3565321
CENDANT CAPITAL IV DELAWARE 30-90790
CENDANT CAPITAL V DELAWARE 30-91188
(exact name of the (State or other Jurisdiction of (I.R.S. Employer
registrants as specified Incorporation or Organization) Identification No.)
in their respective
charters)
9 WEST 57TH STREET
NEW YORK, NY 10019
(212) 413-1800, Fax: (212) 413-1922
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
JAMES E. BUCKMAN, ESQ.
VICE CHAIRMAN
AND GENERAL COUNSEL
CENDANT CORPORATION
9 WEST 57TH STREET
NEW YORK, NY 10019
(212) 413-1800, Fax: (212) 413-1923
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
COPIES TO:
VINCENT J. PISANO, ESQ. ERIC J. BOCK, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP VICE PRESIDENT-LEGAL
919 THIRD AVENUE CENDANT CORPORATION
NEW YORK, NY 10022 9 WEST 57TH STREET
(212) 735-3000 NEW YORK, NY 10019
FAX: (212) 735-2000 (212) 413-1800
FAX: (212) 413-1922
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement
as determined by market conditions.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of 1933, as
amended please check the following box and list the Securities Act
Registration Statement Number of the earlier Effective Registration
Statement for the same offering. [ ]
If this Form is a Post-Effective Amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, as amended, check the following
box and list the Securities Act Registration Statement Number of the
earlier Effective Registration Statement for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to
Rule 434, please check the following box.
[ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF SECURITIES AMOUNT TO BE PROPOSED PROPOSED AMOUNT OF
TO BE REGISTERED REGISTERED MAXIMUM MAXIMUM REGISTRATION
OFFERING PRICE AGGREGATE FEE
PER OFFERING PRICE(1)
SECURITY(1)
Debentures(2)
Common Stock, $.01 par value(3)
Additional Income PRIDES(4)
New Income PRIDES(4)
Additional Growth PRIDES(5)
New Growth PRIDES(5)
Trust Preferred Securities of Cendant
Capital II(6)
Guarantees and Backup Under-
takings of Cendant Corporation
in connection with Preferred
Securities of Cendant Capital
II(7)
Total 100%(9) $ (3)(4) $343,338(8)
- ------------------------
(1) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(o).
(2) Subject to note (8) below, there are being registered hereunder an
indeterminate principal amount of Debentures which will be issued
and sold by the Company to the Trusts, which may later be
distributed to the holders of Trust Preferred Securities upon a
dissolution of any Trust and a distribution of the assets thereof.
(3) Subject to note (8) below, there are being registered hereunder an
indeterminate number of shares of Common Stock as shall be issuable
upon settlement of the Purchase Contracts that are components of
the additional Income PRIDES, new Income PRIDES, additional Growth
PRIDES and new Growth PRIDES registered hereunder.
(4) Subject to note (8) below, there are being registered hereunder an
indeterminate number of additional Income PRIDES and new Income
PRIDES.
(5) Subject to note (8) below, there are being registered hereunder an
indeterminate number of additional Growth PRIDES and new Growth
PRIDES.
(6) Subject to note (8) below, there are being registered hereunder an
indeterminate amount of Trust Preferred Securities.
(7) Includes the rights of holders of the Trust Preferred Securities
under the Guarantees and back-up undertakings, consisting of
obligations by the Company to provide certain indemnities in
respect of, and pay and be responsible for certain expenses, costs,
liabilities, and debts of, the Trusts, as set forth in the
applicable Amended and Restated Declaration of Trust, the
applicable Indenture and the applicable Supplemental Indenture
thereto and as further described in the Registration Statement. No
separate consideration will be received for the Guarantees or any
back-up undertakings.
(8) Previously paid.
(9) The registration fee is based on the consideration to be paid for
the new FELINE PRIDES and the additional FELINE PRIDES. The
consideration per additional FELINE PRIDES, for purposes of
calculating the registration fee, is equal to the theoretical value
of the current FELINE PRIDES, which as of the close of business on
May 10, 1999, was $29.65. The consideration per new FELINE PRIDES
is equal to the market price of $31.25 of the current FELINE PRIDES
plus $17.57. The market price of a current FELINE PRIDES has been
estimated solely for the purpose of calculating registration fees
pursuant to Rule 457(c) based on the average high and low of the
registrants' Income PRIDES on May 10, 1999 as reported on the
composite tape of the NYSE.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
[FlAG]
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
PROSPECTUS
- ----------
NEW FELINE PRIDESSM
4,000,000 ADDITIONAL FELINE PRIDESSM
CENDANT CORPORATION
TRUST ORIGINATED PREFERRED SECURITIES (TOPRS(SM))
CENDANT CAPITAL II
CENDANT CAPITAL III
CENDANT CAPITAL IV
CENDANT CAPITAL V
(LIQUIDATION AMOUNT $50 PER TRUST PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED TO
THE EXTENT PROVIDED IN THIS PROSPECTUS BY
CENDANT CORPORATION
This is an offering of new FELINE PRIDESSM and 4,000,000 additional
FELINE PRIDES by Cendant Corporation. The new FELINE PRIDES consist of
units referred to as new Income PRIDES and new Growth PRIDES. The
additional FELINE PRIDES consist of units referred to as additional Income
PRIDES and additional Growth PRIDES.
This offering is made under a stipulation of settlement agreement
we have entered, the material terms of which are described in this
prospectus. The additional FELINE PRIDES may be used to exercise rights
issued in connection with the settlement.
References made in this prospectus to FELINE PRIDES refer to new
FELINE PRIDES and additional FELINE PRIDES. References made in this
prospectus to Income PRIDES refer to new Income PRIDES and additional
Income PRIDES. References made in this prospectus to Growth PRIDES refer to
new Growth PRIDES and additional Growth PRIDES.
INVESTING IN THE SECURITIES INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 12.
The additional Income PRIDES and the additional Growth PRIDES will
be listed on the NYSE under the symbols "CDPrI" and "CDPrG," respectively,
the same symbols as for the current Income PRIDES and the current Growth
PRIDES. We have applied to list the new Income PRIDES and the new Growth
PRIDES on the NYSE under the symbols "CDPrX" and "CDPrY" respectively,
subject to official notice of issuance and satisfaction of the NYSE minimum
distribution requirements.
The new Income PRIDES and the new Growth PRIDES will be issued by
us only upon exercise of rights, described in this prospectus, that have
been issued in accordance with the settlement agreement. The offering price
of the additional FELINE PRIDES will be determined in accordance with a
formula described in this prospectus and will be included in a prospectus
supplement when it is determined. Any person who receives this prospectus
may provide to Merrill Lynch & Co., as information agent, at , an
indication of his or her interest in purchasing additional FELINE PRIDES.
The additional FELINE PRIDES may be sold directly by us, through
agents that we designate from time to time, or through underwriters or
dealers, although, as required by the settlement, they are being offered
initially to persons who received rights as part of the initial
distribution of rights and to other rights holders and will be offered to
others only if available. Any additional FELINE PRIDES purchased by holders
of rights must be immediately converted into new FELINE PRIDES. If any
agents or underwriters are involved in the sales of additional FELINE
PRIDES, the names of the agents or underwriters and any applicable fees,
commissions or discounts will be set forth in a prospectus supplement.
Neither the SEC, nor any state securities commission, has approved
or disapproved of these securities or passed upon the accuracy or adequacy
of this prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is , 1999.
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SM Service Mark of Merrill Lynch & Co., Inc.
TABLE OF CONTENTS
Page
THE OFFERING - Q&A...........................................................1
RISK FACTORS................................................................12
THE COMPANY.................................................................20
THE TRUSTS..................................................................23
PRICE RANGE OF COMMON STOCK AND DIVIDENDS...................................24
ACCOUNTING TREATMENT........................................................25
USE OF PROCEEDS.............................................................25
EXECUTION OF THE LITIGATION SETTLEMENT......................................26
DESCRIPTION OF THE FELINE PRIDES............................................31
DESCRIPTION OF THE PURCHASE CONTRACTS.......................................38
PROVISIONS OF THE CONTRACT PURCHASE
AGREEMENT AND THE PLEDGE AGREEMENT........................................49
DESCRIPTION OF THE TRUST PREFERRED SECURITIES...............................52
DESCRIPTION OF THE GUARANTEE................................................65
DESCRIPTION OF THE DEBENTURES...............................................68
EFFECT OF OBLIGATIONS UNDER THE
DEBENTURES AND THE GUARANTEE..............................................76
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.....................................77
PLAN OF DISTRIBUTION........................................................85
LEGAL OPINIONS..............................................................85
EXPERTS.....................................................................86
FORWARD-LOOKING STATEMENTS..................................................86
WHERE YOU CAN FIND MORE INFORMATION.........................................87
THE OFFERING - Q&A
WHAT ARE FELINE PRIDES?
FELINE PRIDES consist of Income PRIDES and Growth PRIDES.
Income PRIDES contain two components:
(1) A purchase contract under which the investor agrees to purchase shares
of our common stock, $0.01 par value per share, on February 16, 2001.
The purchase contract also includes unsecured contract adjustment
payments of 1.05% of $50 per year paid quarterly.
(2) A trust preferred security under which the investor will be paid 6.45%
of $50 per year through and including February 15, 2001 and at the
reset rate after that date, but which will be pledged to us to secure
the investor obligations under the purchase contract. On February 16,
2001 the investor will have two options:
o Pay cash to settle the purchase contract for $50 and release the
pledged trust preferred securities, whose rate will have been reset at
that time, or
o Pay cash to settle the purchase contract by allowing the trust
preferred securities to be sold on its behalf in a remarketing process.
Growth PRIDES contain two components:
(1) A purchase contract under which the investor agrees to purchase shares
of our common stock, $0.01 par value per share, on February 16, 2001.
The purchase contract also includes unsecured contract adjustment
payments of 1.3% of $50 per year paid quarterly.
(2) A zero-coupon treasury security which is a 1/20th undivided beneficial
interest in a zero-coupon U.S. treasury security (CUSIP No. 912833 CD
0) with a principal amount at maturity equal to $1,000 and maturing on
February 15, 2001. The zero-coupon treasury security will be pledged to
us to secure the investor's obligations under the purchase contract.
WHAT ARE CURRENT FELINE PRIDES?
The current FELINE PRIDES were issued under a prospectus and prospectus
supplement, dated February 23, 1998, and February 24, 1998, respectively.
The current FELINE PRIDES have been trading on the NYSE since February 25,
1998. Current FELINE PRIDES consist of current Income PRIDES, NYSE symbol
"CDPrI," and current Growth PRIDES, NYSE symbol "CDPrG."
WHAT IS THE DIFFERENCE BETWEEN CURRENT FELINE PRIDES AND ADDITIONAL FELINE
PRIDES AND NEW FELINE PRIDES?
The additional FELINE PRIDES have the same terms as the current FELINE
PRIDES. Holders of rights will be given priority in purchasing additional
PRIDES, which we have agreed will be sold by us no later than 1999. Since
the additional FELINE PRIDES will be offered at a price determined by a
formula, which is expected to be below the market price of the securities
today, we expect that all of them will be purchased by holders of rights and
used to exercise the rights.
Each new FELINE PRIDES, which will be issued only upon the exercise of
rights, will have the same terms as each current FELINE PRIDES except with
respect to the settlement rate and anti-dilution provisions for each
purchase contract. The settlement rate for each purchase contract relating
to a new FELINE PRIDES will be shares of Cendant Common Stock, while
the settlement rate for the current FELINE PRIDES is between 1.0395 and
1.3514 shares of Cendant Common Stock, depending on the average of our
closing stock prices on each of the 20 consecutive trading days ending on
the third trading day preceding February 16, 2001. The anti-dilution
provisions of each purchase contract relating to a new FELINE PRIDES will
be identical to those attaching to the current FELINE PRIDES, except in the
event that prior to , 1999, we issue or agree to issue more than one
million shares of common stock or any other security conferring the right
to our common stock, other than for cash at fair value or as consideration
for an acquisition of a business or business assets, and that agreement
causes a decline in the market value for the common stock, in which case,
the settlement rate for the new FELINE PRIDES may be subject to greater
adjustment.
WHAT ARE THE RIGHTS?
Under the settlement, we will issue up to rights. The stated value of
each right will be approximately $11.71. The rights will be distributed,
initially, to class members who held current FELINE PRIDES at the close of
business on April 15, 1998, in exchange for the release of any claims
arising from the purchase of FELINE PRIDES on or before April 15, 1998. You
may use the rights to exchange current FELINE PRIDES or additional FELINE
PRIDES for new FELINE PRIDES. If you exchange three rights together with
two current Income PRIDES or two additional Income PRIDES, you will receive
two new Income PRIDES. If you exchange three rights together with two
current Growth PRIDES or two additional Growth PRIDES, you will receive two
new Growth PRIDES.
WILL THE RIGHTS BE LISTED ON AN EXCHANGE?
We have applied to list the rights on the NYSE under the symbol
subject to official notice of issuance and satisfaction of the NYSE minimum
distribution requirements and, if listed, the rights will trade on the NYSE
until February 14, 2001.
WILL THE RIGHTS BE DTC ELIGIBLE?
The rights will be issued only in physical certificated form until the
date that we announce that the rights are DTC eligible.
HOW DO I EXERCISE THE RIGHTS?
In order to exercise the rights, no later than February 14, 2001, you
must deliver the rights to Bank One Trust Company, N.A., as rights agent,
with the notice of exercise on the reverse side filled in completely,
together with the appropriate number of current FELINE PRIDES or additional
FELINE PRIDES being used to exercise the rights. Since the FELINE PRIDES
are book entry only, they must be delivered to the Rights Agent by February
14, 2001. The address of the Rights Agent is 1 Bank One Plaza, Suite
IL1-0126, Chicago, IL 60670-0126. If the new FELINE PRIDES are to be issued
to a person other than the person in whose name the current FELINE PRIDES
are held, the person exercising rights must also submit to the rights agent
payment of any applicable transfer taxes.
We will issue two new Income PRIDES to any person who, prior to the close
of business on February 14, 2001, delivers to us three rights together with
two current Income PRIDES, or two additional Income PRIDES. We will issue
two new Growth PRIDES to any person who, prior to the close of business on
February 14, 2001, delivers to us three rights together with two current
Growth PRIDES, or two additional Growth PRIDES.
AM I ENTITLED TO EXCHANGE CURRENT FELINE PRIDES OR ADDITIONAL FELINE PRIDES
FOR NEW FELINE PRIDES?
Any person holding three rights and two current FELINE PRIDES or two
additional FELINE PRIDES is entitled to exchange for two new FELINE PRIDES.
The rights will originally be issued only to persons who owned FELINE
PRIDES at the close of business on April 15, 1998 who do not exclude
themselves from the settlement and who file a timely proof of claim.
However, the rights will be freely tradeable on the NYSE until February 14,
2001, enabling any person to purchase them and execute the exchange.
WHAT PAYMENTS AM I ENTITLED TO AS A HOLDER OF INCOME PRIDES?
Holders of Income PRIDES will be entitled to receive total cash
distributions at a rate of 7.50% of $50 per year, payable quarterly in
arrears. These cash distributions will consist of cumulative cash
distributions on the related trust preferred securities or on the treasury
portfolio, as applicable, payable at the rate of 6.45% of $50 per year
through and including February 15, 2001, and contract adjustment payments
payable by us at the rate of 1.05% of $50 per year, subject, in the case of
both the distributions on the trust preferred securities and of the
contract adjustment payments, to our right to defer the payment of these
amounts.
WHAT PAYMENTS AM I ENTITLED TO AS A HOLDER OF GROWTH PRIDES?
Holders of Growth PRIDES will be entitled to receive quarterly cash
distributions of contract adjustment payments payable by us at the rate of
1.3% of $50 per year, subject to our rights of deferral. In addition,
original issue discount ("OID") will accrue on each related treasury
security.
WHAT CONTRACT ADJUSTMENT PAYMENTS AM I ENTITLED TO?
Contract adjustment payments will be fixed at a rate per year of 1.05% of
$50 per purchase contract in the case of Income PRIDES, and 1.3% of $50 per
purchase contract in the case of Growth PRIDES.
DO WE HAVE THE OPTION TO DEFER CURRENT PAYMENTS?
We have the right at any time, and from time to time, limited to a period
not extending beyond the maturity date of our debentures, due February 16,
2003 and initially bearing interest at 6.45% per year, to defer the
interest payments due on the debentures (each, an "extension period"). As a
consequence of the deferral, the corresponding quarterly distributions to
holders of trust preferred securities and Income PRIDES would be deferred.
During any period of deferral, these distributions would continue to
accrue, compounded quarterly, at the rate of 6.45% per year through and
including February 15, 2001, and at the reset rate thereafter. We also have
the right to defer the payment of contract adjustment payments on the
related purchase contracts until no later than February 16, 2001. However,
any deferred contract adjustment payments would continue to accrue at the
rate of 7.5% per year until paid, compounded quarterly.
WHAT ARE THE PAYMENT DATES FOR THE SECURITIES?
The current payments described above in respect of the Income PRIDES and
Growth PRIDES will be payable quarterly in arrears on February 16, May 16,
August 16 and November 16 of each year (each, a "payment date"), commencing
to holders of record on the business day preceding the payment dates. With
respect to contract adjustment payments, the payments will be payable
through and including the earlier of February 16, 2001 or the most recent
quarterly date on or before any early settlement of the related purchase
contracts. In the case of trust preferred securities that are components of
Income PRIDES, the payments will be payable through and including the most
recent quarterly date on or before the earlier of February 16, 2001 and the
date the liquidation amounts of the trust preferred securities together
with all accumulated and unpaid distributions are paid in full. All of
these payments are subject to the deferral provisions described below.
WHAT IS THE SETTLEMENT RATE?
The settlement rate is the number of newly issued shares of common stock
we are obligated to sell and you are obligated to buy upon settlement of a
purchase contract on February 16, 2001.
The settlement rate for each purchase contract related to additional
FELINE PRIDES, subject to adjustment under certain circumstances, will be
identical to the settlement rate for each purchase contract related to the
current FELINE PRIDES. The settlement rate will be as follows:
(a) If the applicable market value is equal to or greater than $48.10,
the settlement rate will be 1.0395 shares of our common stock per
purchase contract.
(b) If the applicable market value is less than $48.10 but greater than
$37, the settlement rate will be equal to $50 divided by the
applicable market value.
(c) If the applicable market value is less than or equal to $37, the
settlement rate, which is equal to $50 divided by $37, will be
1.3514 shares of our common stock per purchase contract.
Unlike the settlement rate for the additional FELINE PRIDES and current
FELINE PRIDES, which depends on the applicable market value, the settlement
rate of the new FELINE PRIDES is . At the settlement date of each purchase
contract relating to a new FELINE PRIDES, we will issue a holder of new
FELINE PRIDES shares of common stock per each purchase contract relating to
a new FELINE PRIDES, regardless of the market price of the shares.
WHAT IS REMARKETING?
The trust preferred securities of Income PRIDES holders who have failed
to notify Bank One Trust Company, N.A., as agent of the holders of the
FELINE PRIDES in its capacity as the purchase contract agent, on or prior
to the fifth business day before February 16, 2001 of their intention to
pay cash to satisfy their obligations under the related purchase contracts
will be remarketed on the third business day immediately preceding February
16, 2001.
The remarketing agent will use its reasonable efforts to remarket those
trust preferred securities (bearing the reset rate) on that date for
settlement on February 16, 2001. The remarketing agent will use its best
efforts to obtain a price of approximately 100.5% of the aggregate stated
liquidation amount of those trust preferred securities, plus any related
accrued and unpaid distributions, including deferred distributions.
The portion of the proceeds from the remarketing equal to the total
stated liquidation amount of those trust preferred securities will be
automatically applied to satisfy in full those Income PRIDES holders'
obligations to purchase our common stock under the related purchase
contracts. The remarketing agent will deduct as a remarketing fee an amount
not exceeding 25 basis points (.25%) of the aggregate stated liquidation
amount of the remarketed trust preferred securities from any amount of
those proceeds in excess of the aggregate stated liquidation amount of the
remarketed trust preferred securities plus any accrued and unpaid
distributions, including any deferred distributions. The remarketing agent
will remit the remaining portion of the proceeds, if any, for the benefit
of that holder.
WHAT HAPPENS IF THE REMARKETING AGENT DOES NOT SELL THE TRUST PREFERRED
SECURITIES?
We will exercise our rights as a secured party to dispose of the trust
preferred securities in accordance with applicable law and to satisfy in
full, from the proceeds of that disposition, your obligation to purchase
common stock under the related purchase contracts if
o the remarketing agent cannot remarket the related trust preferred
securities, other than to us, of your Income PRIDES at a price not less
than 100% of the total stated liquidation amount of those trust preferred
securities plus accrued and unpaid distributions, including deferred
distributions, if any, or
o if the remarketing has not occurred because a condition precedent to the
remarketing has not been fulfilled.
IF I AM NOT A PARTY TO A PURCHASE CONTRACT, MAY I STILL PARTICIPATE IN A
REMARKETING OF MY TRUST PREFERRED SECURITIES?
Holders of trust preferred securities that are not components of Income
PRIDES may elect, in the manner described below, to have their trust
preferred securities remarketed by the remarketing agent.
BESIDES PARTICIPATING IN A REMARKETING, HOW ELSE WILL MY OBLIGATIONS UNDER
THE PURCHASE CONTRACTS BE SATISFIED?
o through the early delivery of cash to the purchase contract agent in the
manner described below ("early settlement")
o in the case of Income PRIDES, by settling the related purchase contracts
with separate cash on the third business day prior to February 16, 2001
with prior notification to the purchase contract agent
o upon the termination of purchase contracts.
WHAT ARE THE TRUST PREFERRED SECURITIES?
The trust preferred securities represent undivided beneficial ownership
interests in the assets of the trust.
WHAT DISTRIBUTIONS WILL I RECEIVE ON THE TRUST PREFERRED SECURITIES?
Distributions on the trust preferred securities that are components of
Income PRIDES will constitute a portion of the distributions on the Income
PRIDES. Distributions will be payable initially at the annual rate of 6.45%
of the liquidation amount of $50 per trust preferred security to, but
excluding, February 16, 2001. If any trust preferred securities remain
outstanding on and after February 16, 2001, the distributions on these
trust preferred securities will be at the reset rate from February 16, 2001
to, but excluding, February 16, 2003.
WHEN WILL I RECEIVE DISTRIBUTIONS ON THE TRUST PREFERRED SECURITIES?
Distributions will be payable quarterly in arrears on each February 16,
May 16, August 16 and November 16, commencing , to holders of record on the
business day preceding each date.
WHAT IS THE RESET RATE?
The reset rate is the interest rate on the debentures, and therefore the
distribution rate on the trust preferred securities, following February 16,
2001. Merrill Lynch, Pierce, Fenner & Smith Incorporated in its capacity as
the reset agent will determine the reset rate that the trust preferred
securities should bear in order for a trust preferred security to have an
approximate market value of 100.5% of $50 on the third business day
immediately preceding February 16, 2001, except that we may limit the reset
rate to be no higher than the rate on the two-year benchmark treasury plus
200 basis points (2%).
WHEN WILL THE INTEREST RATE ON THE DEBENTURES BE RESET?
Unless a tax event redemption has occurred, the interest rate on the
debentures will be reset on the third business day immediately preceding
February 16, 2001. The debentures, and, thus, the trust securities, which
include the trust preferred securities and the common securities
representing undivided beneficial interests in the assets of the trust, are
redeemable at our option, in whole but not in part, upon the occurrence and
continuation of a tax event under the circumstances described to constitute
a tax event.
WHAT ARE THE DEBENTURES?
The debentures will be our senior unsecured obligations and will rank on
a parity with all of our senior unsecured obligations.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES RELATED TO THE INCOME PRIDES,
GROWTH PRIDES AND TRUST PREFERRED SECURITIES?
The purchase of additional FELINE PRIDES and automatic exchange of those
additional FELINE PRIDES and rights for new FELINE PRIDES should be treated
as a purchase of new FELINE PRIDES in exchange for cash and rights.
Investors, if any, that purchase additional FELINE PRIDES and continue to
hold the additional FELINE PRIDES may be considered to have received
consideration to assume the obligations under the related purchase contract
and to have paid that amount, in addition to the purchase price, for the
related trust preferred securities or treasury securities, but those
investors should consult their tax advisors concerning the tax consequences
associated with the acquisition of the additional FELINE PRIDES. The
exchange of current FELINE PRIDES or additional FELINE PRIDES and rights
for new FELINE PRIDES (other than the required delivery of additional
FELINE PRIDES and rights immediately following the purchase of additional
FELINE PRIDES pursuant to this offering) should be treated as a taxable
exchange of both the rights and the purchase contracts related to those
current FELINE PRIDES or additional FELINE PRIDES.
The debentures may be issued with OID, in which case a beneficial owner
of Income PRIDES or trust preferred securities will be required to include
gross income its proportionate share of such OID on a constant yield to
maturity basis. In addition, a beneficial owner of Income PRIDES and trust
preferred securities will include in gross income its proportionate share
of the stated interest on the debentures when that interest income is paid
or accrued in accordance with the beneficial owner's regular method of tax
accounting. We intend to report the contract adjustment payments as income
to holders of FELINE PRIDES, but holders should consult their tax advisors
concerning the possibility that the contract adjustment payments may be
treated as loans, purchase price adjustments, rebates or option premiums
rather than being includible in income on a current basis. A beneficial
owner of Growth PRIDES will be required to include in gross income any OID
with respect to the treasury securities as it accrues on a constant yield
to maturity basis. If a tax event redemption has occurred, a beneficial
owner of Income PRIDES will be required to include in gross income its
allocable share of OID on the treasury portfolio as it accrues on a
constant yield to maturity basis.
HOW DO I BUY ADDITIONAL PRIDES?
Any person who receives this prospectus may provide to Merrill Lynch &
Co., as information agent, at , an indication of his or her interest in
purchasing additional FELINE PRIDES. Indications of interest do not
constitute a commitment to purchase any securities. No later than , 1999,
we will instruct Merrill Lynch, as calculation agent, to determine the
offering price of the additional PRIDES in accordance with the formula
described in this prospectus. If this formula were used with the closing
price of the common stock as of , 1999, the offering price for the
additional Income PRIDES would be $ and the offering price for the
additional Growth PRIDES would be $ , while the closing prices of the
Income PRIDES and the Growth PRIDES on the New York Stock Exchange on that
date were $ and $ , respectively.
After the offering price is determined, we will issue a press release and
file a prospectus supplement and will contact those persons who have given
indications of interest. In filling orders, we will give priority to
persons as follows :
(1) Holders of rights who received them as part of the original distribution.
(2) Any other holder of rights.
(3) The public.
In order to purchase additional PRIDES, holders of rights must submit
their rights for exercise and their preferential allocation will be limited
to the number of Income PRIDES or Growth PRIDES necessary to exercise all
such rights. In addition, in making allocations, we may make adjustments so
as to satisfy the NYSE listing criteria for the listing of the new FELINE
PRIDES.
We will allow persons belonging to the first two groups to purchase up to
two additional FELINE PRIDES for each right held by that person. However,
the purchase of the additional FELINE PRIDES by persons belonging to the
first two groups is subject to their consenting to immediately exchanging
the additional FELINE PRIDES and rights for new FELINE PRIDES. Allocation
will be limited to the number of Income PRIDES or Growth PRIDES necessary
to exercise all these Rights. If we sell all the additional FELINE PRIDES
to one group, we will not sell any additional FELINE PRIDES to a group of a
lesser priority. If the first two groups oversubscribe we will issue the
additional FELINE PRIDES proportionately among the subscribers. In
addition, in making allocations, we may make adjustments so as to attempt
to satisfy the NYSE listing criteria for the listing of the new FELINE
PRIDES, including the requirement that there be at least 400 holders
having, in the aggregate, one million or more new FELINE PRIDES with a
market value of at least four million U.S. dollars.
We will not sell any additional FELINE PRIDES to the public unless
members of the first two groups as a whole acquire at least $100,000,000
face amount of additional FELINE PRIDES.
We will not sell you any additional Growth PRIDES unless (1) you received
rights as part of the original distribution and you were a beneficial owner
of Growth PRIDES on April 15, 1998, or (2) we otherwise elect to issue
additional Growth PRIDES.
EXPLANATORY DIAGRAMS
The following diagrams demonstrate some of the key features of the
purchase contracts, the new Income PRIDES, the additional Income PRIDES,
the new Growth PRIDES, the additional Growth PRIDES, the 6.45% trust
preferred securities, the transformation of Income PRIDES into Growth
PRIDES and trust preferred securities and the transformation of rights and
current FELINE PRIDES or additional FELINE PRIDES into new FELINE PRIDES.
FELINE PRIDES PURCHASE CONTRACT
o Income PRIDES and Growth PRIDES both include a purchase contract under
which the investor agrees to purchase shares of our common stock, $0.01
par value per share, on February 16, 2001. In addition, the purchase
contracts include unsecured contract adjustment payments shown in the
diagrams on the following pages.
[GRAPHIC OMITTED]
- -------------------
(1) For each of the percentage categories shown, the percentage of shares
to be delivered at maturity to an investor in additional Income PRIDES
or additional Growth PRIDES is determined by dividing the related
number of shares to be delivered, as indicated in the footnote for each
category, by an amount equal to $50 divided by $37.
(2) The number of shares to be delivered will be calculated by dividing $50
by $37.
(3) The number of shares to be delivered will be calculated by dividing $50
by the applicable market value.(6)
(4) The number of shares to be delivered will be calculated by dividing $50
by $48.10.
(5) The reported sales price of the common stock listed on the NYSE for
February 24, 1998.
(6) The applicable market value means the average of the closing price per
share of common stock on each of the twenty consecutive trading days
ending on the third trading day immediately preceding February 16,
2001.
[GRAPHIC OMITTED]
INCOME PRIDES
o Income PRIDES consist of two components as described below:
[GRAPHIC OMITTED]
o The investor owns the trust preferred security but will pledge it
to us to secure its obligations under the purchase contract.
GROWTH PRIDES
o Growth PRIDES consist of two components as described below:
[GRAPHIC OMITTED]
o The investor owns the zero-coupon treasury security but will pledge
it to us to secure its obligations under the purchase contract. A
"treasury security" is defined as a 1/20th undivided beneficial
interest in a zero- coupon U.S. treasury security (CUSIP No. 912833
CD 0) with a principal amount at maturity equal to $1,000 and
maturing on February 15, 2001.
TRUST PREFERRED SECURITIES
o Trust preferred securities have the terms described below:
[GRAPHIC OMITTED]
o The holder of trust preferred securities that are components of
Income PRIDES has an option on February 16, 2001 to either:
o Pay cash to settle the purchase contract for $50 and release
the pledged trust preferred securities whose rates have been
reset on February 16, 2001, or
o Pay cash to settle the purchase contracts by allowing the
trust preferred securities to be included in the remarketing
process.
o The holder of trust preferred securities that are separate and not
components of Income PRIDES has the option on February 16, 2001 to
either:
o Continue to hold the trust preferred securities whose rate
has been reset on February 16, 2001, or
o Deliver the trust preferred securities to the Chase
Manhattan Bank, in its capacity as our custodial agent, to
be included in the remarketing process.
TRANSFORMING INCOME PRIDES INTO GROWTH PRIDES AND TRUST PREFERRED SECURITIES
o To create a Growth PRIDES, the investor separates an Income PRIDES
into its components-the purchase contract and the trust preferred
security-and then combines the purchase contract with a specific
zero-coupon treasury security that matures concurrently with the
maturity of the purchase contract.
o The investor owns the zero-coupon treasury security but will pledge
it to us to secure its obligations under the purchase contract.
o The zero-coupon treasury security together with the purchase
contract constitute a Growth PRIDES. The trust preferred
securities, which are no longer a component of the Income PRIDES,
are tradeable as
separate securities.
[GRAPHIC OMITTED]
o The investor can also transform Growth PRIDES and trust
preferred securities into Income PRIDES.
o The transformation of Income PRIDES into Growth PRIDES and
trust preferred securities, and the transformation of Growth
PRIDES and trust preferred securities into Income PRIDES,
require minimum amounts of securities.
o An investor who tenders three rights together with two
current Income PRIDES or two additional Income PRIDES will
receive in exchange two new Income PRIDES. An investor who
tenders three rights together with two current Growth PRIDES
or two additional Growth PRIDES will receive in exchange two
new Growth PRIDES.
[GRAPHIC OMITTED]
RISK FACTORS
Your investment in the FELINE PRIDES will involve risks. You should
carefully consider the following discussion of risks as well as other
information contained in this prospectus.
DISCOVERY OF ACCOUNTING IRREGULARITIES AND RELATED LITIGATION AND GOVERNMENT
INVESTIGATIONS
We were created in December 1997, through the merger of HFS
Incorporated into CUC International with CUC surviving and changing its
name to Cendant Corporation. On April 15, 1998, we announced that in the
course of transferring responsibility for our accounting functions from
Cendant personnel associated with CUC prior to the merger to Cendant
personnel associated with HFS before the merger and preparing for the
reporting of first quarter 1998 financial results, we discovered accounting
irregularities in some of the CUC business units. As a result, we, together
with our counsel and assisted by auditors, immediately began an intensive
investigation.
As a result of the findings of the investigations, we restated our
previously reported financial results for 1997, 1996 and 1995 and the six
months ended June 30, 1998 and 1997.
Since the April 15, 1998 announcement of the discovery of accounting
irregularities in the former CUC business units, and prior to October 13,
1999, 70 lawsuits claiming to be class actions, two lawsuits claiming to be
brought derivatively on our behalf and several individual lawsuits and
arbitration proceedings have been filed against us and, among others, our
predecessor, HFS, and several current and former officers and directors of
Cendant and HFS. These lawsuits assert, among other things, various claims
under the federal securities laws including claims under sections 11, 12
and 15 of the Securities Act of 1933 and sections 10(b), 14(a) and 20(a) of
and Rules 10b-5 and 14a-9 under the Securities Exchange Act of 1934 and
state statutory and common laws, including claims that financial statements
previously issued by us were false and misleading and that these statements
allegedly caused the price of our securities to be artificially inflated.
In addition, the SEC and the United States Attorney for the District
of New Jersey are conducting investigations relating to the accounting
issues. While our management has made all adjustments considered necessary
as a result of the findings of the investigations and the restatement of
our financial statements for 1997, 1996 and 1995, and the first six months
of 1998, we can provide no assurances that additional adjustments will not
be necessary as a result of these government investigations.
Other than with respect to the portion of the PRIDES litigation which
is discussed below, we do not believe that it is feasible to predict the
final outcome or resolution of these proceedings and investigations or to
estimate the amount or potential range of loss with respect to the
resolution of these proceedings and investigations. In addition, the timing
of the final resolution of these proceedings and investigations is
uncertain. The possible outcomes or resolutions of these proceedings and
investigations could include judgments against us or settlements and could
require substantial payments by us. Our management believes that adverse
outcomes in the proceedings and investigations or any other resolutions,
including settlements could have a material impact on our financial
condition, results of operations or cash flows.
INVESTMENT IN FELINE PRIDES REQUIRES HOLDERS TO PURCHASE COMMON STOCK
RESULTING IN THE RISK OF DECLINE IN EQUITY VALUE
Although as a holder of FELINE PRIDES you will be the beneficial
owner of the related trust preferred securities, treasury portfolio or
treasury securities, you have an obligation under the purchase contract to
buy our common stock. We cannot assure you that the market value of the
common stock you will receive on February 16, 2001 will be equal to or
greater than the $50 stated amount per FELINE PRIDES held by you.
Prior to February 16, 2001, unless you pay cash to satisfy your
obligation under the purchase contract or the purchase contracts are
terminated due to our bankruptcy, insolvency or reorganization, the
proceeds derived from the remarketing of the trust preferred securities or
the principal of the related treasury securities, or the appropriate
applicable ownership interest of the treasury portfolio, when paid at
maturity, as the case may be, will automatically be used to purchase a
specified number of shares of our common stock on your behalf. As a holder
of additional FELINE PRIDES, if the applicable market value of the common
stock is less than $ , the aggregate market value of the common stock
issued to you under each purchase contract on February 16, 2001 will be
less than the price you paid for the additional FELINE PRIDES and the
market value per share of that common stock will be less than the effective
price per share paid by you for such common stock on that date, in which
case you will suffer an economic loss as of February 16, 2001. Accordingly,
you assume the risk that the market value of the common stock may decline,
and that decline could be substantial.
LIMITATIONS ON OPPORTUNITY FOR EQUITY APPRECIATION
Your opportunity for equity appreciation afforded by investing in
the additional FELINE PRIDES is less than your opportunity for equity
appreciation if you directly invested in the common stock. This opportunity
is less because the market value of the common stock to be received by you
under the purchase contract on February 16, 2001, assuming that the market
value is the same as the applicable market value of such common stock, will
only exceed the price you paid if the applicable market value of the common
stock exceeds $ , which represents an appreciation of approximately % over
$ . Moreover, in such event, you would receive on February 16, 2001 only
approximately %, the percentage equal to $ divided by $ , of the shares of
common stock that you would have received if you had made a direct
investment in the common stock on that date. Therefore you would receive on
February 16, 2001 only approximately % of the appreciation in the value of
the common stock in excess of $ .
FACTORS AFFECTING TRADING PRICES
The trading prices of Income PRIDES and Growth PRIDES in the
secondary market will be directly affected by the trading prices of the
common stock, the general level of interest rates and our credit quality.
It is impossible to predict whether the price of our common stock or
interest rates will rise or fall. Trading prices of the common stock will
be influenced by our operating results and prospects and by economic,
financial and other factors, including the remaining class action
litigation against us. In addition, general market conditions can affect
the trust preferred securities markets generally, therefore affecting the
price of our common stock, including the level of, and fluctuations in, the
trading prices of stocks generally and sales of substantial amounts of
common stock by us in the market after the offering of the FELINE PRIDES or
the perception that those sales could occur. Fluctuations in interest rates
may give rise to arbitrage opportunities based upon changes in the relative
value of the common stock underlying the purchase contracts and of the
other components of the FELINE PRIDES. The arbitrage could, in turn, affect
the trading prices of the Income PRIDES, Growth PRIDES, trust preferred
securities and common stock.
LIMITED RIGHTS INCLUDING LIMITED VOTING RIGHTS
If you hold trust preferred securities you will not be entitled to
vote to appoint, remove or replace or to increase or decrease the number of
trustees of the trust, and generally will have no voting rights except in
limited circumstances. If you hold FELINE PRIDES you will not be entitled
to any rights with respect to the common stock, including, without
limitation, voting rights and rights to receive any dividends or other
distributions on the common stock. You will only be entitled to rights as a
holder of the common stock if we deliver shares of common stock for FELINE
PRIDES on February 16, 2001 or as a result of early settlement and only if
the applicable record date, if any, for the exercise of these rights occurs
after that date. For example, if an amendment is proposed to our articles
of incorporation or by-laws and the record date for determining the
stockholders of record entitled to vote on that amendment occurs prior to
the delivery, you will not be entitled to vote on that amendment.
DILUTION OF THE COMMON STOCK MAY AFFECT THE SETTLEMENT RATE AND THE FELINE
PRIDES TRADING PRICES
The number of shares of common stock you are entitled to receive
upon the settlement of your purchase contract and the trading prices of
Income PRIDES and Growth PRIDES may be adversely affected due to dilution
of our common stock resulting from the issuance of additional common stock
or other equity interests.
The number of shares of common stock that you are entitled to
receive on February 16, 2001 or as a result of early settlement of a
purchase contract is subject to adjustment for certain events arising from
stock splits and combinations, stock dividends and other actions by us that
modify our capital structure. We will not adjust the number of shares of
common stock that you are to receive on February 16, 2001, or as a result
of early settlement of a purchase contract, for other events, including
most offerings of common stock for cash by us or in connection with
acquisitions. We are not restricted from issuing additional common stock
during the term of the purchase contracts and have no obligation to
consider your interests for any reason; except, that, in case of an
agreement to issue more than one million shares of common stock or any
other security conferring that the right to receive our common stock, other
than for cash at fair value or as consideration for an acquisition of a
business or business assets, and that agreement causes a decline in the
market value for the common stock. In that event, the settlement rate of
the new FELINE PRIDES may be adjusted, as described elsewhere in this
prospectus.
If we issue additional shares of common stock, the price of the
common stock may be materially and adversely affected and, because of the
relationship of the number of shares to be received on February 16, 2001 to
the price of the common stock, these events may adversely affect the
trading price of Income PRIDES or Growth PRIDES.
POSSIBLE ILLIQUIDITY OF THE SECONDARY MARKET
We are unable to predict how the new FELINE PRIDES and the
additional FELINE PRIDES will trade in the secondary market or whether this
market will be liquid or illiquid.
We will have applied to list the new Income PRIDES and the new
Growth PRIDES on the NYSE, subject to official notice of issuance and
satisfaction of the NYSE minimum distribution requirements. The NYSE will
not list the new FELINE PRIDES unless there are 400 holders having, in the
aggregate, one million or more new FELINE PRIDES with a market value of at
least four million U.S. dollars. The new FELINE PRIDES are issued in the
framework of a class action settlement. We cannot predict how many persons
will choose to participate in the settlement and exercise the exchange
rights provided in the settlement. The exchange rights may be exercised
until February 14, 2001. In addition, we can neither predict at which point
in time the holders of rights will choose to exercise their exchange
rights. The liquidity of the new Income PRIDES and new Growth PRIDES
depends on the number of people who elect to execute their exchange rights
and on the point in time in which they do so. We can, therefore, provide no
assurance as to the liquidity of any market that may develop for the new
FELINE PRIDES, your ability to sell these securities and whether a trading
market if it develops will continue.
Moreover, if you were to substitute treasury securities for trust
preferred securities, or trust preferred securities for treasury
securities, thereby converting your Income PRIDES to Growth PRIDES or your
Growth PRIDES to Income PRIDES, the liquidity of Income Prides and Growth
PRIDES could be adversely affected. We can provide no assurance that the
new FELINE PRIDES will meet the minimum distribution requirements for
listing on the NYSE. We cannot provide assurance that the NYSE will not
delist or suspend the new FELINE PRIDES. The NYSE may delist or suspend the
new FELINE PRIDES should you elect to (1) create new Growth PRIDES or
Income PRIDES by substituting collateral. This could cause the number of
Income PRIDES or Growth PRIDES to fall below the requirement for listing
securities that at least 1,000,000 new Income PRIDES and new Growth PRIDES
be outstanding at any time.
THE RIGHTS WILL BE ISSUED INITIALLY IN PHYSICAL CERTIFICATED FORM UNTIL THE
DATE THAT WE ANNOUNCE THAT THE RIGHTS ARE DTC ELIGIBLE
The rights will be issued initially in physical certificated form
until the date that we announce that the rights are DTC eligible.
Therefore, if any of your rights certificates are mutilated, lost, stolen
or destroyed, we may in our discretion issue, and the rights agent shall
deliver, in exchange and substitution for and upon receipt and cancellation
of the mutilated rights certificate, or in lieu of and substitution for the
rights certificate lost, stolen or destroyed, a new rights certificate of
like tenor and representing an equivalent number of rights, but only upon
receipt of evidence satisfactory to us and the rights agent of the loss,
theft or destruction of the rights certificate and indemnity or bond, if
requested, also satisfactory to us and the rights agent. You may also be
required to pay any other reasonable charges as we or the rights agent may
prescribe.
PLEDGED SECURITIES ENCUMBERED
Your rights to the trust preferred securities, treasury portfolio
or treasury securities (together, the "pledged securities"), as applicable,
will be subordinated to our security interest. Although you will be the
beneficial owners of the applicable pledged securities, those pledged
securities will be pledged with Chase Manhattan Bank, in its capacity as
our collateral agent, to secure your obligations under the related purchase
contracts. Additionally, notwithstanding the automatic termination of the
purchase contracts, if we become the subject of a case under the Bankruptcy
Code, the delivery of the pledged securities to you may be delayed by the
imposition of the automatic stay of section 362 of the Bankruptcy Code.
POSSIBLE DISSOLUTION OF THE TRUST DUE TO AN INVESTMENT COMPANY EVENT
The dissolution of the trust due to an investment company event may
affect the Income PRIDES' market prices.
If an investment company event occurs, we will dissolve the trust,
except in the limited circumstances described below, and distribute the
debentures to you in a total principal amount equal to the aggregate stated
liquidation amount of any trust preferred securities that you may hold. We
will only dissolve and distribute the debentures to you if we are unable to
avoid the investment company event within a 90-day period by taking some
ministerial action or pursuing some other reasonable measure that will have
no adverse effect on the trust, us or you, and will involve no material
cost to us. In addition, we will have the right to dissolve the trust at
any time.
There can be no assurance as to the impact on the market prices for
Income PRIDES if we dissolve the trust and distribute the debentures to you
in exchange for your trust preferred securities. Because Income PRIDES will
consist of debentures and related purchase contracts, if we dissolve the
trust as a result of an investment company event or otherwise, you are also
making an investment decision with regard to the debentures if you purchase
Income PRIDES and should carefully review all the information regarding the
debentures contained in this prospectus.
TAX EVENT REDEMPTION
The occurrence of a tax event redemption, described below, may
affect the market prices of Income PRIDES, due to the substitution of the
treasury portfolio for the redeemed trust preferred securities as
collateral for your obligations under the related purchase contract.
We have the option to redeem the debentures and, thus, the trust
securities, on not less than 30 days or more than 60 days prior written
notice, in whole but not in part, at any time before February 16, 2001 if a
tax event occurs and continues under the circumstances described below. If
a tax event occurs, we will redeem the debentures at a redemption price per
trust security equal to the redemption amount plus accrued and unpaid
interest, including deferred interest, if any. If we redeem all of the
debentures, the trust must redeem all of the trust securities and pay the
redemption price in cash to the holders of the trust securities.
If the tax event redemption occurs before February 16, 2001, the
redemption price payable to you due to liquidation of any interest you may
have in the trust as a holder of Income PRIDES will be distributed to the
collateral agent, who in turn will apply an amount equal to the redemption
amount of the redemption price to purchase the treasury portfolio on your
behalf.
We will substitute the treasury portfolio for the trust preferred
securities and pledge the treasury portfolio with the collateral agent to
secure your obligations to purchase our common stock under the purchase
contracts related to the Income PRIDES. If you do not hold trust preferred
securities in the form of Income PRIDES you will receive redemption
payments directly. There can be no assurance as to the impact on the market
prices for the Income PRIDES if we substitute the treasury portfolio as
collateral in replacement of any trust preferred securities so redeemed. A
tax event redemption will be a taxable event to the beneficial owners of
the trust preferred securities.
RIGHT TO DEFER CURRENT PAYMENTS
If we chose to exercise our right to defer payments on the
purchase contracts and on the trust preferred securities, you may also be
adversely affected by (1) the United States federal income tax
consequences, (2) the impact on your receipt of distributions on the trust
preferred securities and (3) the effect on the market prices of trust
preferred securities associated with the deferral of distributions on the
trust preferred securities.
We have the option to defer the payment of contract adjustment
payments on the purchase contracts until February 16, 2001. Any deferred
contract adjustment payments will bear additional contract adjustment
payments at the rate of 7.5% per year, compounding on each succeeding
payment date, until we pay them to you. If the purchase contracts are
settled early or terminated due to our bankruptcy, insolvency or
reorganization, the right to receive contract adjustment payments and
deferred contract adjustment payments, if any, will also terminate.
If we defer the payment of contract adjustment payments on the
purchase contracts until February 16, 2001, you will receive a number of
shares of common stock equal to the total amount of deferred contract
adjustment payments payable to you, divided by the applicable market value.
We will also have the right under the indenture to defer payments
of interest on the debentures by extending the interest payment period at
any time, and from time to time, on the debentures. As a consequence of
that extension, quarterly distributions on the trust preferred securities,
held either as a component of the Income PRIDES or held separately, would
be deferred. Any such deferrals would continue to accrue at a rate of 6.45%
per year through and including February 15, 2001, and at the reset rate
afterwards, compounded quarterly. Our right to extend the interest payment
period for the debentures will be limited and may not extend beyond
February 16, 2003.
During any extension period, we will not declare or pay dividends
on, make distributions with respect to, or redeem, purchase or acquire, or
make a liquidation payment with respect to, any of our capital stock except
in the following five situations:
o to purchase or acquire our own capital stock in order to
satisfy any obligations that we may have under any employee
benefit plans or to satisfy any obligations that we may have
under any contract or security outstanding on the date of
that event requiring us to purchase our own capital stock;
o as a result of any reclassification of our capital stock or
the exchange or conversion of one class or series of our
capital stock for another class or series of our capital
stock;
o to purchase fractional interests in shares of our capital
stock under the conversion or exchange provisions of our
capital stock or the conversion or exchange of that
security;
o to pay dividends or distributions in our capital stock, or
rights to acquire our capital stock, or to repurchase or
redeem our capital stock solely from the issuance or
exchange of capital stock; or
o to redeem or repurchase any rights outstanding under a
shareholder rights plan or to declare a dividend of rights
in the future.
During any extension period, we also will not make any guarantee
payments with respect to the above, other than payments of distributions
and specific redemptions out of monies held by the trust and payments on
liquidation of the trust (the "guarantee") or payments of the obligations
of the trust with respect to the common securities (the "common securities
guarantee"). Before the termination of any extension period, we may further
extend the interest payment period. However, we may not extend the
extension period beyond February 16, 2003. Upon the termination of any
extension period and the payment of all amounts then due, we may commence a
new extension period, subject to the above requirements.
We do not currently intend to defer payments of stated interest on
the debentures and we currently believe that the likelihood of our doing so
is remote. Therefore, the debentures should not be considered to have been
issued with OID for United States federal income tax purposes as a result
of our right to defer payments of stated interest on the debentures unless
and until we actually exercise that deferral right. There can be no
assurance that the IRS will agree with our position.
Should we exercise our right to defer payments of interest by
extending the interest payment period, a U.S. holder of trust preferred
securities held either as a component of the Income PRIDES or held
separately would be required to include its proportionate share of the
stated interest on the debentures in gross income, as OID, on a daily
economic accrual basis, regardless of that U.S. holder's method of tax
accounting. As a result, a U.S. holder of trust preferred securities would
recognize income for United States federal income tax purposes in advance
of the receipt of cash attributable to that income, and would not receive
cash from the trust related to that income if that holder disposed of the
trust preferred securities prior to the record date for the date on which
distributions of such amounts were made.
In addition, as a result of our right to defer interest payments,
the market price of the trust preferred securities, which represent
undivided beneficial ownership interests in the assets of the trust, might
be more volatile than the market price of other securities that are not
subject to the deferral. Should we exercise that right in the future, the
market price of the trust preferred securities likely would be adversely
affected. If you were to dispose of your trust preferred securities during
an extension period, therefore, you might not receive the same return on
your investment as if you had continued to hold your trust preferred
securities.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
No statutory, judicial or administrative authority directly
addresses the treatment of the FELINE PRIDES or instruments similar to the
FELINE PRIDES for United States federal income tax purposes, or of the
exchange of rights and current FELINE PRIDES or additional FELINE PRIDES
for new FELINE PRIDES. As a result, some United States federal income tax
consequences of the purchase, ownership and disposition of FELINE PRIDES
are not entirely clear.
PURCHASE CONTRACT AGREEMENT NOT QUALIFIED UNDER TRUST INDENTURE ACT;
LIMITED OBLIGATIONS OF PURCHASE CONTRACT AGENT
You, as a holder of FELINE PRIDES, will not have the benefits of
the protection of the Trust Indenture Act of 1939.
The purchase contract agreement between us and the purchase
contract agent will not be qualified as an indenture under the Trust
Indenture Act and the purchase contract agent will not be required to
qualify as a trustee under the Trust Indenture Act, although the trust
preferred securities constituting a part of the Income PRIDES will be
issued pursuant to the declaration, which will be qualified under the Trust
Indenture Act. Accordingly, if you hold FELINE PRIDES you will not have the
benefit of the protections of the Trust Indenture Act. The protections
generally afforded the holder of a security issued under an indenture that
has been qualified under the Trust Indenture Act include:
o disqualification of the indenture trustee for conflicting interests.
o provisions preventing a trustee that is also a creditor of the
issuer from improving its own credit position at the expense of the
security holders immediately prior to or after a default under the
indenture.
o the requirement that the indenture trustee deliver reports at least
annually with respect to specific matters concerning the indenture
trustee and the securities.
RIGHTS UNDER THE GUARANTEE
Except as described below, you as a holder of trust preferred
securities, will not be able to exercise directly any other rights with
respect to the debentures.
The guarantee will be qualified as an indenture under the Trust
Indenture Act. The Wilmington Trust Company will act as indenture trustee
under the guarantee in its capacity as the guarantee trustee for the
purposes of compliance with the provisions of the Trust Indenture Act. The
guarantee trustee will hold the guarantee for your benefit if you hold any
of the trust preferred securities.
If you hold any of the trust preferred securities, the guarantee
will guarantee you, generally on a senior unsecured basis, the payment of
the following:
o any accrued and unpaid distributions that are required to be
paid on the trust preferred securities, to the extent the
trust has funds available for this purpose.
o the redemption price, including all accumulated and unpaid
distributions to the date of redemption, of trust preferred
securities that we may have redeemed upon the occurrence of
a tax event redemption, to the extent the trust has funds
available for this purpose.
o upon a voluntary or involuntary dissolution of the trust,
other than in connection with the distribution of debentures
to you, the lesser of (a) the total of the liquidation
amount and all accrued and unpaid distributions on the trust
preferred securities to the date of payment to the extent
the trust has funds available for this purpose or (b) the
amount of assets of the trust remaining available for
distribution to holders of the trust preferred securities in
liquidation of the trust.
The holders of a majority in liquidation amount of the trust
preferred securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the
guarantee trustee or to direct the exercise of any trust or power conferred
upon the guarantee trustee under the guarantee. Notwithstanding the above,
but only under limited circumstances, holders of the trust preferred
securities may institute a legal proceeding directly against us to enforce
their rights under the guarantee without first instituting a legal
proceeding against the trust, the guarantee trustee or any other person or
entity.
If we were to default on our obligation to pay amounts payable on
the debentures or otherwise, the trust would lack funds for the payment of
distributions or amounts payable on redemption of the trust preferred
securities or otherwise, and, in that event, holders of the trust preferred
securities would not be able to rely upon the guarantee for payment of
these amounts. Instead, they would rely on the enforcement
o by the institutional trustee of its rights as registered
holder of the debentures against us pursuant to the terms of
the indenture and the debentures or
o by that holder of the institutional trustee's or that
holder's own rights against us to enforce payments on the
debentures.
The declaration provides that each holder of trust preferred
securities, by its acceptance, agrees to the provisions of the guarantee
and the indenture.
ENFORCEMENT OF SPECIFIC RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES
Except as described below, you, as holder of trust preferred
securities, will not be able to exercise directly any other rights with
respect to the debentures.
If a declaration event of default were to occur and were
continuing, holders of trust preferred securities would rely on the
enforcement by the institutional trustee of its rights as registered holder
of the debentures against us. In addition, the holders of a majority in
liquidation amount of the trust preferred securities would have the right
to direct the time, method, and place of conducting any proceeding for any
remedy available to the institutional trustee or to direct the exercise of
any trust or power conferred upon the institutional trustee under the
declaration, including the right to direct the institutional trustee to
exercise the remedies available to it as the holder of the debentures.
The indenture provides that the debt trustee must give holders of
debentures notice of all defaults or events of default within 30 days after
occurrence. However, except in the cases of a default or an event of
default in payment on the debentures, the debt trustee will be protected in
withholding the notice if its responsible officers in good faith determine
that withholding of the notice is in the interest of such holders.
If the institutional trustee were to fail to enforce its rights
under the debentures in respect of an indenture event of default after a
holder of record of trust preferred securities had made a written request,
such holder of record of trust preferred securities may, to the extent
permitted by applicable law, institute a legal proceeding against us to
enforce the institutional trustee's rights under the debentures. In
addition, if we were to fail to pay interest or principal on the debentures
on the date that interest or principal is otherwise payable, and this
failure to pay were continuing, holders of trust preferred securities may
directly institute a proceeding for enforcement of payment of the principal
of or interest on the debentures having a principal amount equal to the
aggregate stated liquidation amount of your trust preferred securities (a
"direct action") after the respective due date specified in the debentures.
In connection with a direct action, we would have the right under the
indenture to set off any payment made to that holder by us.
LIMITED RIGHTS OF ACCELERATION
The institutional trustee, as holder of the debentures, may
accelerate payment of the principal and accrued and unpaid interest on the
debentures only upon the occurrence and continuation of a declaration event
of default or an indenture event of default. A declaration event of default
or indenture event of default are generally limited to payment defaults,
breaches of specific covenants and specific events of bankruptcy,
insolvency and reorganization relating to us and specific events of
dissolution of the trust. Accordingly, there is no right to acceleration
upon default of our payment obligations under the guarantee.
TRADING PRICE OF THE TRUST PREFERRED SECURITIES
The trust preferred securities may trade at a price that does not
fully reflect the value of accrued but unpaid interest with respect to the
underlying debentures. If you are an accrual basis taxpayer and dispose of
your trust preferred securities between record dates for payments of
distributions you will be required to include accrued but unpaid interest
on the debentures through the date of disposition in income as ordinary
interest income, i.e., interest or, possibly, OID, and to add that amount
to your adjusted tax basis in your proportionate share of the underlying
debentures deemed disposed of. The same situation would arise to the
extent, if any, that there is OID on the debentures underlying the trust
preferred securities following any payment extension. To the extent the
selling price is less than your adjusted tax basis, you will recognize a
loss.
THE COMPANY
OVERVIEW
We are one of the foremost consumer and business services companies
in the world. We were created through the merger of HFS into CUC in
December 1997 with the resultant corporation being renamed Cendant
Corporation. We provide the fee-based services formerly provided by each of
CUC and HFS, including travel services, real estate services and
membership-based consumer services, to our customers throughout the world.
We operate in four principal divisions: travel related services,
real estate related services, alliance marketing related services and other
consumer and business services. Our businesses provide a wide range of
complementary consumer and business services, which together represent nine
business segments.
o The travel related services businesses facilitate vacation
timeshare exchanges, manage corporate and government vehicle
fleets and franchise car rental and hotel businesses.
o The real estate related services businesses franchise real
estate brokerage businesses, provide home buyers with
mortgages and assist in employee relocation.
o The alliance marketing related services businesses provide
an array of value driven products and services.
o Our other consumer and business services include our tax
preparation services franchise, information technology
services, car parks and vehicle emergency support and rescue
services in the United Kingdom, credit information services,
financial products and other consumer-related services.
As a franchisor of hotels, residential real estate brokerage
offices, car rental operations and tax preparation services, we license the
owners and operators of independent businesses to use our brand names. We
do not own or operate hotels, real estate brokerage offices, car rental
operations or tax preparation offices, except for certain company-owned
Jackson Hewitt offices which we intend to franchise. Instead, we provide
our franchisee customers with services designed to increase their revenue
and profitability.
MATTERS RELATING TO THE ACCOUNTING IRREGULARITIES
AND ACCOUNTING POLICY CHANGE
ACCOUNTING IRREGULARITIES
On April 15, 1998, we announced that in the course of transferring
responsibility for our accounting functions from Cendant personnel
associated with CUC prior to the merger to Cendant personnel associated
with HFS before the merger and preparing for the reporting of first quarter
1998 financial results, we discovered accounting irregularities in some of
the CUC business units. As a result, we, together with our counsel and
assisted by auditors, immediately began an intensive investigation. In
addition, our audit committee engaged Willkie Farr & Gallagher as special
legal counsel and Wilkie Farr engaged Arthur Andersen LLP to perform an
independent investigation into these accounting irregularities.
On July 14, 1998, we announced that the accounting irregularities
were greater than those initially discovered in April and that the
irregularities affected the accounting records of the majority of the CUC
business units. On August 13, 1998, we announced that Cendant's
investigation was complete. On August 27, 1998, we announced that our audit
committee had submitted its report to the board of directors on the audit
committee investigation into the accounting irregularities and its
conclusions regarding responsibility for those actions. A copy of the
report has been filed as an exhibit to Cendant's current report on Form 8-K
dated August 28, 1998.
As a result of the findings of the investigations, we restated our
previously reported financial results for 1997, 1996 and 1995 and the six
months ended June 30, 1998 and 1997. The 1997 restated amounts also
included adjustments related to the former HFS businesses which are
substantially comprised of $47.8 million in reductions to merger- related
costs and other unusual charges ("Unusual Charges") and a $14.5 million
decrease in pre-tax income excluding Unusual Charges, which on a net basis
increased 1997 net income from continuing operations. The 1997 annual and
six months results have also been restated for a change in accounting,
effective January 1, 1997, related to revenue and expense recognition for
memberships with a full refund offer.
CLASS ACTION LITIGATION AND GOVERNMENT INVESTIGATION
Since the April 15, 1998 announcement of the discovery of accounting
irregularities in the former CUC business units, and prior to October 13,
1999, 70 lawsuits claiming to be class actions, two lawsuits claiming to be
brought derivatively on our behalf and several individual lawsuits and
arbitration proceedings have been filed against us and, among others, our
predecessor, HFS, and several current and former officers and directors of
Cendant and HFS. These lawsuits assert, among other things, various claims
under the federal securities laws including claims under sections 11, 12
and 15 of the Securities Act of 1933 and sections 10(b), 14(a) and 20(a) of
and Rules 10b-5 and 14a-9 under the Securities Exchange Act of 1934 and
state statutory and common laws, including claims that financial statements
previously issued by us were false and misleading and that these statements
allegedly caused the price of our securities to be artificially inflated.
In addition, the staff of the Securities and Exchange Commission, the
SEC, and the United States Attorney for the District of New Jersey are
conducting investigations relating to the accounting irregularities. The
SEC staff has advised us that its inquiry should not be construed as an
indication by the SEC or its staff that any violations of law have
occurred. As a result of the findings from the investigations, we made all
adjustments considered necessary which are reflected in our restated
financial statements. Although we can provide no assurances that additional
adjustments will not be necessary as a result of these government
investigations, we do not expect that additional adjustments will be
necessary.
Other than with respect to the portion of the PRIDES litigation which
is discussed below, we do not believe that it is feasible to predict the
final outcome or resolution of these proceedings and investigations or to
estimate the amount or potential range of loss with respect to the
resolution of these proceedings and investigations. In addition, the timing
of the final resolution of these proceedings and investigations is
uncertain. The possible outcomes or resolutions of these proceedings and
investigations could include judgments against us or settlements and could
require substantial payments by us. Our management believes that adverse
outcomes in the proceedings and investigations or any other resolutions,
including settlements could have a material impact on our financial
condition, results of operations or cash flows.
SETTLEMENT OF PRIDES CLASS ACTION LITIGATION
On March 17, 1999, we entered into a stipulation of settlement in the
PRIDES action and the court subsequently granted the settlement its
approval. Under the settlement stipulation, in return for the release of
all claims arising from any purchase of current FELINE PRIDES on or before
April 15, 1998, we are obligated to issue up to 29,161,474 rights with a
stated theoretical value of $11.71 each. Each class member who does not opt
out and who submits a timely and valid proof of claim will be entitled to
one right for each current FELINE PRIDES held at the close of business on
April 15, 1998. Under the settlement stipulation, until February 14, 2001,
we will issue two new FELINE PRIDES to every person who delivers to us
three rights and two current FELINE PRIDES. The terms of the new FELINE
PRIDES will be the same as the currently outstanding PRIDES, except that
the conversion rate will be revised so that, at the time the rights are
distributed, each of the new PRIDES will have a value equal to $17.57 more
than each original PRIDES, based upon a generally accepted valuation model.
The settlement does not resolve claims based upon purchases of current
FELINE PRIDES after April 16, 1998.
Based on the settlement agreement, we recorded an after tax charge of
approximately $228 million, or $0.26 per diluted share, which is $351
million pre-tax, in the fourth quarter of 1998. We recorded an increase in
additional paid-in capital of $350 million offset by a decrease in retained
earnings of $228 million, resulting in a net increase in stockholders'
equity of $122 million as a result of the prospective issuance of the
common stock. As a result, the settlement should not reduce net book value.
In addition, the settlement is not expected to reduce 1999 earnings per
share unless Cendant's common stock price materially appreciates.
THE TRUSTS
Each trust is a statutory business trust formed under Delaware law
pursuant to (1) a declaration of trust, executed by the sponsor and some of
the trustees and (2) the filing of a certificate of trust with the
Secretary of State of the State of Delaware. Each declaration of trust will
be amended and restated in its entirety substantially in the form filed as
an exhibit to the registration statement of which this prospectus forms a
part. Each declaration will be qualified as an indenture under the Trust
Indenture Act.
Although upon issuance of the trust preferred securities, a holder
of Income PRIDES will be the beneficial owner of the related trust
preferred securities, those trust preferred securities will be pledged with
the collateral agent to secure the obligations of the holders under the
related purchase contracts. We will directly or indirectly acquire common
securities of each trust in an aggregate liquidation amount equal to 3% of
the total capital of the related trust.
Each trust exists for the exclusive purposes of
(1) issuing the trust securities representing undivided
beneficial ownership interests in the assets of that trust,
(2) investing the proceeds of the trust securities in the
debentures and
(3) engaging in only those activities necessary, appropriate,
convenient or incidental to the purposes specified in (1)
and (2) above. Each trust has a term of approximately six
years, but may dissolve earlier as provided in the
declaration.
The number of the trustees for each trust is initially three. Two
of the trustees (the "regular trustees") are persons who are our employees
or officers or who are affiliated with us. Under the declaration, the third
trustee will be a financial institution that is unaffiliated with us. This
trustee will serve as institutional trustee under each declaration and as
indenture trustee for the purposes of compliance with the provisions of the
Trust Indenture Act (the "institutional trustee"). Initially, Wilmington
Trust Company, a Delaware banking corporation, will be the institutional
trustee until removed or replaced by the holder of the common securities.
For purposes of compliance with the provisions of the Trust Indenture Act,
Wilmington Trust Company will also act as the guarantee trustee and as
trustee resident in the State of Delaware (the "Delaware trustee") for
purposes of the Delaware Business Trust Act (the "Trust Act").
The institutional trustee will hold title to the debentures for the
benefit of the holders of the trust securities and the institutional
trustee will have the power to exercise all rights, powers and privileges
under the indenture as the holder of the debentures. In addition, the
institutional trustee will maintain exclusive control of a segregated
noninterest bearing bank account (the "property account") to hold all
payments made in respect of the debentures for the benefit of the holders
of the trust securities. The institutional trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the trust securities out of funds from the property account. The
guarantee trustee will hold the guarantee for the benefit of the holders of
the trust preferred securities.
We, as the direct or indirect holder of all the common securities
of each trust, will have the right to appoint, remove or replace any
trustee and to increase or decrease the number of trustees. However, the
number of trustees shall be at least two, at least one of which shall be a
regular trustee. We will pay all fees and expenses related to each trust
and the offering of the trust securities.
The rights of the holders of the trust preferred securities,
including economic rights, rights to information and voting rights, are
provided in the declaration, the Trust Act and the Trust Indenture Act.
The office of the Delaware trustee for each trust currently is
Wilmington Trust Company, Wilmington, Delaware. The principal place of
business of the trust shall be c/o Cendant Corporation, 9 West 57th Street,
New York, NY 10019 and its telephone number shall be (212) 413-1800.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
Our common stock is listed and traded on the NYSE under the symbol
"CD". The following table provides, for the calendar quarters indicated,
the high and low closing sales prices per share on the NYSE for the periods
shown below as reported on the NYSE Composite Tape. On December 17, 1997,
CUC merged with HFS, with CUC surviving and changing its name to "Cendant
Corporation." All the common stock prices prior to the first quarter of
1998 are for CUC.
MARKET PRICE (1)
PERIOD HIGH LOW
- ------ ---- ---
1997:
First Quarter................................................. $26 7/8 $22 1/2
Second Quarter................................................ 26 3/4 20
Third Quarter................................................. 31 3/4 23 11/16
Fourth Quarter................................................ 34 3/8 26 15/16
1998:
First Quarter................................................. $41 $32 7/16
Second Quarter................................................ $41 3/8 18 9/16
Third Quarter................................................. 22 7/16 10 7/16
Fourth Quarter................................................ 20 5/8 7 1/2
1999:
First Quarter ................................................ 22 9/16 14 7/8
Second Quarter ...............................................
Third Quarter ................................................ 22 5/8 17
Fourth Quarter through October 11, 1999....................... 18 5/16 17 5/16
We have never paid a cash dividend on our common stock. We do not
anticipate paying cash dividends on our capital stock in the foreseeable
future and intend to retain all earnings to finance the operations and
expansion of our business and the repurchase of common stock and debt
reduction. The payment of cash dividends in the future will depend on our
earnings, financial condition and capital needs and on other factors deemed
relevant by our board of directors at that time.
ACCOUNTING TREATMENT
The financial statements of the trust with respect to which there
are outstanding trust preferred securities will be reflected in our
consolidated financial statements, with the trust preferred securities
shown on our balance sheet under the caption "Mandatorily redeemable
preferred securities issued by subsidiary." The financial statement
footnotes to our consolidated financial statements will reflect that the
sole asset of such trust will be the debentures. Distributions on the trust
preferred securities will be reflected as a charge to our consolidated
income, identified as minority interest, whether paid or accrued.
The present value of the FELINE PRIDES contract adjustment payments
are initially charged to equity, with an offsetting credit to liabilities.
Subsequent contract adjustment payments are allocated between this
liability account and interest expense based on a constant rate calculation
over the life of the transaction.
The issuance of the additional FELINE PRIDES for cash will result in
an increase in mandatorily redeemable preferred securities issued by
subsidiary in an amount equal to the current market value of the trust
preferred securities at such time. To the extent cash proceeds received are
less than the current market value of the trust preferred securities at the
time of issuance, a charge to paid-in-capital will be recorded for the
difference.
The FELINE PRIDES purchase contracts are forward transactions in our
common stock. Upon settlement of a purchase contract, we will receive $50
on that purchase contract and will issue the requisite number of shares of
common stock. The $50 we receive will be credited to shareholders' equity
allocated between the common stock and paid-in-capital accounts.
Before the issuance of shares of common stock upon settlement of
the purchase contracts, the FELINE PRIDES will be reflected in our earnings
per share calculations using the treasury stock method. Under this method,
the number of shares of common stock used in calculating earnings per share
is deemed to be increased by the excess, if any, of the number of shares
issuable upon settlement of the purchase contracts over the number of
shares that could be purchased by us in the market, at the average market
price during the period, using the proceeds receivable upon settlement.
Consequently, we anticipate that there will be no dilutive effect on our
earnings per share except during periods when the average market price of
common stock is above $48.10, with respect to both the current FELINE
PRIDES and additional FELINE PRIDES and $ with respect to the new FELINE
PRIDES.
USE OF PROCEEDS
Substantially all of the proceeds from the sale of the additional
Growth PRIDES will be used towards the purchase of the underlying treasury
securities to be transferred to holders of the additional Growth PRIDES,
and we will receive no proceeds from the sale of the additional Growth
PRIDES. All or substantially all of the proceeds from the sale of the
additional Income PRIDES and from the common securities will be invested by
the trust in our debentures. We currently anticipate using substantially
all of the net proceeds from the sale of the debentures and Growth PRIDES,
estimated to be approximately $ million, after deducting expenses, for
general corporate purposes which may include repaying outstanding
indebtedness, repurchasing our common stock and other purposes.
There will not be any proceeds to us from the exchange of the
current or additional Growth PRIDES and rights for new Growth PRIDES. There
will not be any proceeds to us from the exchange of the current or
additional Income PRIDES and rights for new Income PRIDES. Our issuance of
the debentures and the purchase contracts relating to the new FELINE PRIDES
will not result in the receipt of any cash proceeds but will be done to
settle the claims against us discussed in this prospectus.
EXECUTION OF THE LITIGATION SETTLEMENT
EXECUTION OF THE EXCHANGE
We will issue two new Income PRIDES to each person who delivers
three rights along with two current Income PRIDES or two additional Income
PRIDES, and we will issue two new Growth PRIDES to each person who delivers
three rights along with two current Growth PRIDES or two additional Growth
PRIDES.
New FELINE PRIDES will not be issued to any person with respect to
rights submitted after February 14, 2001. We will not be required to issue
new FELINE PRIDES to you if the rights agent receives your rights
certificates, current FELINE PRIDES certificates or additional FELINE
PRIDES certificates after that date, regardless of when you sent them.
After you have exercised your right, you may not revoke that
exercise.
Upon an exchange of current Income PRIDES for new Income PRIDES the
purchase contract agent relating to such current FELINE PRIDES will cancel
such current FELINE PRIDES.
With respect to exchanges of current Growth PRIDES for new Growth
PRIDES, the collateral agent for the current Growth PRIDES will release the
related treasury securities pledged to it, and will transfer them to the
collateral agent for the new Growth PRIDES, with whom such treasury
securities will be pledged to secure the holder's obligation under the
purchase contract relating to the new Growth PRIDES. In addition, the
purchase contract agent for the current Growth PRIDES will cancel such
current GROWTH PRIDES. With respect to exchanges of additional Growth
PRIDES for new Growth PRIDES, the new collateral agent will transfer the
treasury securities pledged to it under the purchase contracts relating to
the additional Growth PRIDES from the collateral account relating to the
additional Growth PRIDES to the collateral account relating to the new
Growth PRIDES. In addition, the purchase contract agent for the additional
Growth PRIDES will cancel the exchanged additional Growth PRIDES.
You may exercise your rights by delivering to the rights agent on or
prior to February 14, 2001:
o a properly completed and duly executed rights certificate
representing an adequate number of rights;
o any required signature guarantees; and
o FELINE PRIDES certificates representing the requisite amount
of current FELINE PRIDES or additional FELINE PRIDES.
You should deliver your rights certificate and the FELINE PRIDES
certificates to the rights agent. We have appointed Bank One Trust Company,
N.A. as rights agent for this offering. The rights agent's address for
packages sent by mail, courier or overnight delivery is:
The rights agent telephone number is (312) 407-1819 and its
facsimile number is (312) 407-4656.
If the new FELINE PRIDES are to be issued to a person other than the
person in whose name the current FELINE PRIDES are held, the person
exercising the rights must also submit to the rights agent payment of any
transfer taxes.
If you do not specify the number of rights being exercised on your
rights certificate, or the number of current FELINE PRIDES or additional
FELINE PRIDES tendered is not sufficient consideration for all of the new
FELINE PRIDES that you indicated you wished to purchase, you will be deemed
to have exercised the maximum number of rights that could be exercised for
the amount of current FELINE PRIDES that the rights agent receives from
you.
Signatures on the rights certificate must be guaranteed by an
eligible guarantor institution, as defined in Rule 17Ad-15 of the Exchange
Act, subject to the standards and procedures adopted by the rights agent.
Eligible guarantor institutions include banks, brokers, dealers, credit
unions, national securities exchanges and savings associations.
Signatures on the rights certificate do not need to be guaranteed if:
(1) the rights certificate provides that the new FELINE PRIDES are to
be delivered directly to you, the record owner of those rights, or
(2) the rights certificate is submitted for the account of a member
firm of a registered national securities exchange or a member of
the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent
in the United States.
DISTINGUISHING CHARACTERISTICS OF THE NEW FELINE PRIDES
The new FELINE PRIDES will have the same terms as those of the
current FELINE PRIDES and additional FELINE PRIDES, except that:
o the settlement rate of the related purchase contract will be
modified so that it is equal to ; and
o the purchase contracts relating to the new FELINE PRIDES
will benefit from more favorable anti-dilution protection as
discussed below.
The new FELINE PRIDES will be listed, subject to the NYSE minimum
distribution requirement that there be at least 400 holders having, in the
aggregate, one million or more new FELINE PRIDES with a market value of at
least four million U.S. dollars, which is not expected to be satisfied when
the rights are first distributed.
Each purchase contract underlying a new FELINE PRIDES, unless
earlier terminated, or earlier settled at your option, will obligate you to
purchase, and us to sell, on February 16, 2001, for the stated amount of
the new FELINE PRIDES, which equals $50, a number of newly issued shares of
our common stock equal to the settlement rate. The settlement rate of the
related purchase contract entitles you to purchase and obligates us to sell
a number of newly issued shares of our common stock greater than that of
the purchase contract related to a current FELINE PRIDES or an additional
FELINE PRIDES.
The anti-dilution provisions of purchase contracts relating to the
new FELINE PRIDES will be identical to those attaching to the purchase
contracts relating to the current FELINE PRIDES and the additional FELINE
PRIDES; provided, however, in case we issue, or undertake or agree to
issue, in one or a series of related transactions, an aggregate of more
than one million shares of common stock or any other security conferring
such right, other than for cash at fair value or as consideration for an
acquisition of a business or business assets, and that agreement causes a
decline in the market value for the common stock, the settlement rate for
purchase contracts relating to new FELINE PRIDES may be subject to further
adjustment as described in "Description of the purchase contracts
- -Anti-Dilution Adjustments."
ISSUANCE OF ADDITIONAL FELINE PRIDES AND SPECIAL FELINE PRIDES
We have incorporated other features into the settlement to assist
holders of rights in obtaining current FELINE PRIDES and additional FELINE
PRIDES to exercise their rights. First, on a date which is no earlier than
, 1999 and is no later than , 1999, we will sell to interested
rights holders up to 4,000,000 additional FELINE PRIDES that can be used to
exercise rights at an offering price per additional FELINE PRIDES equal to
100% of its theoretical value, as described below. Second, we have filed a
shelf registration statement covering 15,000,000 FELINE PRIDES (the
"special FELINE PRIDES") with the same terms as the current FELINE PRIDES
and the additional FELINE PRIDES and which may be used to exercise rights,
if issued. We have no obligation to sell any special FELINE PRIDES except
that, within 30 days of the expiration of the rights, we must offer holders
of unexpired rights the opportunity to purchase special FELINE PRIDES for
cash at a price of 105% of their theoretical value.
The price of an additional FELINE PRIDES will equal 100% of its
theoretical value. The additional FELINE PRIDES will be priced not less
than fifteen nor more than sixty days after the distribution date of the
rights. The price will be determined by Merrill Lynch in its capacity as
the calculation agent. As promptly as practicable upon receipt of the
pricing confirmation, we will file with the SEC and distribute a prospectus
supplement containing definitive pricing information and announce the price
to the public.
We will sell the additional FELINE PRIDES according to the following
priority:
(1) holders of rights who received them as part of the original
distribution, to the extent required to exercise their
rights;
(2) any other holders of rights, to the extent required to
exercise their rights;
(3) the public.
The purchase of the additional FELINE PRIDES by persons belonging to
the first two groups is subject to their consent to use the additional
FELINE PRIDES to exchange the rights and is limited to the number of
additional FELINE PRIDES each person requires to exercise its rights. If we
sell all the additional FELINE PRIDES to one of the groups, we will not
sell any additional FELINE PRIDES to a group of a lesser priority. If the
first two groups oversubscribe we will distribute the additional FELINE
PRIDES proportionately among the subscribers. We will not sell any
additional FELINE PRIDES to the public unless members of the first two
groups acquire as a whole at least $100,000,000 face amount of additional
FELINE PRIDES.
In addition to the restrictions stated above, we will not sell any
additional Growth PRIDES unless (1) the sale is to a rights holder who
received those rights as part of the original distribution and was a
beneficial owner of Growth PRIDES on April 15, 1998, or (2) we elect to
issue additional Growth PRIDES.
We will require holders of rights belonging to one of the first two
groups to place orders to purchase additional FELINE PRIDES with the rights
agent not later than the close of business on the first full business day
after the price is first publicly announced. Settlement will occur on the
fifth business day after the announcement date. On the settlement date,
holders of rights will be required to submit funds for the additional
FELINE PRIDES being acquired together with the certificates for the rights.
On the settlement date, we will issue the additional FELINE PRIDES
and will immediately exchange the additional FELINE PRIDES and rights for
new FELINE PRIDES. If we issue the additional FELINE PRIDES to the general
public, we will use reasonable efforts to list the additional FELINE PRIDES
on the NYSE, subject to satisfaction of the minimum distribution
requirements.
Payment for the additional FELINE PRIDES by members of the first two
groups must be made by submitting with their rights, in the manner
described above and by:
(1) bank draft drawn upon a United States bank or a postal,
telegraphic or express money order payable to Bank One Trust
Company, N.A., in its capacity as the rights agent, or
(2) wire transfer of funds to the account maintained by the
rights agent for this purpose at The First National Bank of
Chicago, Corporate Trust Administration, ABA #071000013,
Acct. #48115377,
Attn.: Steve Husbands.
Payment will be deemed to have been received by the rights agent
only upon receipt by the rights agent of any bank draft drawn upon U.S.
bank, any postal, telegraphic or express money order or any wire transfer.
We may, at our discretion from time to time, issue special FELINE
PRIDES. Except as set forth below, we will have no obligation to issue any
special FELINE PRIDES. If we issue special FELINE PRIDES, they will have
terms that are substantially identical to the current FELINE PRIDES and
additional FELINE PRIDES. We will not offer, issue, or sell special FELINE
PRIDES unless holders of unexpired rights are given priority to purchase
the special FELINE PRIDES on the same terms and conditions as such special
FELINE PRIDES are to be offered to any third party.
No later than thirty days prior to February 16, 2001, which is the
purchase contract settlement date, we will distribute to all record holders
of the rights a preliminary prospectus with respect to the 15 million
special FELINE PRIDES, which will consist of special Income PRIDES and/or
special Growth PRIDES or any combination of them, at our option. We will
inform those persons that they are entitled to purchase special FELINE
PRIDES for cash at a price no greater than 105% of their theoretical value,
including accrued interest. However, purchasers of special FELINE PRIDES
must undertake to exercise all of the rights held by them with respect to
which special FELINE PRIDES are issued, as described below. Not later than
five business days prior to February 14, 2001, we will file with the SEC
and distribute a pricing prospectus and announce the price to the public.
Until the close of business day on February 14, 2001, persons who
hold rights may submit rights and the cash necessary to purchase the number
of special FELINE PRIDES required to exercise all their rights. Not later
than the fifth business day prior to February 14, 2001, we will issue the
special FELINE PRIDES, which will be immediately exchanged with the
applicable rights for new FELINE PRIDES, the purchase contracts relating to
which will be settled.
Do not send the certificates to us. You are responsible for choosing
the payment and delivery method for your certificates, and you bear the
risks associated with that delivery. If you choose to deliver your
certificates and payment by mail, we recommend that you use registered
mail, properly insured, with return receipt requested. We also recommend
that you allow a sufficient number of days to ensure delivery to the rights
agent and clearance of payment prior to February 14, 2001.
GUARANTEED DELIVERY PROCEDURES
If a holder of current FELINE PRIDES desires to tender such FELINE
PRIDES and the holder's FELINE PRIDES with the requisite accompanying
Rights are not immediately available, or time will not permit such holder's
FELINE PRIDES or other required documents to reach the rights agent before
the expiration date, or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected if:
(1) the holder tenders the current FELINE PRIDES and the
requisite accompanying Rights through an eligible
institution;
(2) prior to the expiration date, the rights agent receives from
such eligible institution a properly completed and duly
executed notice of guaranteed delivery, substantially in the
form we have provided, by telegram, telex, facsimile
transmission, mail or hand delivery, setting forth the name
and address of the holder of the current FELINE PRIDES being
tendered and the amount of the current FELINE PRIDES being
tendered. The notice of guaranteed delivery shall state that
the tender is being made and guarantee that within 3 New
York Stock Exchange trading days after the date of execution
of the notice of guaranteed delivery, the certificates for
all physically tendered FELINE PRIDES, in proper form for
transfer, or a book-entry confirmation, as the case may be,
together with a properly completed and duly executed letter
of transmittal or agent's message with any required
signature guarantees and any other documents required by the
letter of transmittal will be deposited by the eligible
institution with the rights agent; and
(3) the rights agent receives the certificates for all
physically tendered current FELINE PRIDES, in proper form
for transfer, or a book-entry confirmation, as the case may
be, together with a properly completed and duly executed
letter of transmittal or agent's message with any required
signature guarantees and any other documents required by the
letter of transmittal, within 3 New York Stock Exchange
trading days after the date of execution of the notice of
guaranteed delivery.
For the purposes of the guaranteed delivery procedures, eligible
institution means a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States.
MERGER OF TRUSTS
Upon the issuance, if any, of the additional Income PRIDES, Cendant
Capital I shall merge with and into Cendant Capital II. Thereafter, each
current Income PRIDES, additional Income PRIDES and new Income PRIDES will
consist of a purchase contract and a trust preferred security of Cendant
Capital II. In addition, upon each issuance of special Income PRIDES, the
trust issuing the trust preferred securities prior to such issuance shall
be merged with and into one of the trusts which prior to such time shall
not have issued any securities (a "newly issuing trust"), and the trust
preferred securities forming a part of the current Income PRIDES,
additional Income PRIDES and new Income PRIDES will be issued by such newly
issuing trust. The terms of the trust preferred securities issued by each
of the trusts will have terms substantially identical to each other. The
aggregate liquidation amount of trust preferred securities issued by any
trust will equal the sum of the aggregate liquidation amount of trust
preferred securities issued by the trust being merged with and into such
trust plus the aggregate liquidation amount of trust preferred securities
being simultaneously issued by such trusts. The aggregate principal amount
of debentures held by any trust will equal the sum of the aggregate
principal amount of debentures held by the trust being merged with and into
such trust plus the aggregate principal amount of debentures being
simultaneously issued by Cendant to such trust in connection with the
issuance of additional Income PRIDES or special Income PRIDES.
DESCRIPTION OF THE FELINE PRIDES
The summaries of the provisions of documents described below are not
necessarily complete, and in each instance reference is made to the copies
of those documents, including the definitions of terms, which are on file
with the commission. Wherever particular sections of, or terms defined in,
those documents are referred to in this prospectus, those sections or
defined terms are incorporated by reference.
Each FELINE PRIDES will be issued under the purchase contract
agreement between us and the purchase contract agent. The FELINE PRIDES,
including new FELINE PRIDES and 4,000,000 additional FELINE PRIDES offered
initially will consist of (A) units referred to as Income PRIDES, including
new Income PRIDES and additional Income PRIDES, and (B) units referred to
as Growth PRIDES, including new Growth PRIDES and additional
Growth PRIDES.
Each Income PRIDES will initially consist of a unit comprised of
(a) a purchase contract under which
(1) you will purchase from us on February 16,
2001, a number of newly issued shares of our
common stock equal to the settlement rate
described below
(2) we will pay you contract adjustment payments
at the rate of 1.05% of $50 per year paid
quarterly, subject to our right to defer these
payments, and
(b) beneficial ownership of a 6.45% trust originated
preferred security, having a stated liquidation
amount per trust preferred security equal to $50,
representing an undivided beneficial ownership
interest in the assets of the trust, which will
consist solely of the debentures,
(1) in the case of a distribution of the
debentures upon the dissolution of the trust
as a result of an investment company event, as
described below, or otherwise, debentures
having a principal amount equal to $50, or
(2) upon the occurrence of a tax event redemption
prior to February 16, 2001, the appropriate
applicable ownership interest in the treasury
portfolio. "Applicable ownership interest"
means, with respect to an Income PRIDES and
the U.S. treasury securities in the treasury
portfolio, (A) a 1/20, or 5%, undivided
beneficial ownership interest in a $1,000
principal or interest amount of a principal or
interest strip in a U.S. treasury security
which matures on or prior to February 15, 2001
and (B) for each scheduled interest payment
date on the debentures that occurs after the
tax event redemption date, a .080625%
undivided beneficial ownership interest in a
$1,000 face amount of the U.S. treasury
security which is a principal or interest
strip maturing on that date.
Each Growth PRIDES will initially consist of a unit comprised of
(a) a purchase contract under which
(1) the holder will purchase from us on February
16, 2001, for an amount in cash equal to $50,
a number of newly issued shares of our common
stock, equal to the settlement rate described
below, and
(2) we will pay the holder contract adjustment
payments at the rate of 1.3% of $50 per year
paid quarterly, subject to our right to defer
these payments, and
(b) a 1/20 undivided beneficial interest in a treasury
security.
The new FELINE PRIDES are generally identical to the current FELINE
PRIDES in all aspects, excluding the settlement rate and the anti-dilution
protections. In addition, although the trust preferred securities forming a
part of the new Income PRIDES will be substantially identical to the trust
preferred securities that form a part of the current Income PRIDES, such
trust preferred securities may be issued by a different trust as described
in "Execution of the Litigation Settlement - Merger of Trusts."
The purchase price of each FELINE PRIDES will generally be allocated
between the related purchase contract and the related trust preferred
security or interest in a treasury security in proportion to their
respective fair market values at the time of purchase. We will take the
position that
(1) in the case of a new FELINE PRIDES, the amount allocable to
the related trust preferred security and interest in a
treasury security, as the case may be, will equal the cash
paid for the additional FELINE PRIDES plus the fair market
value of the rights exchanged for that new FELINE PRIDES,
and therefore will be $_____ and $_____, respectively, and
the amount allocable to the related purchase contract will
be $_____, and
(2) in the case of an additional FELINE PRIDES, the amount
allocable to the related trust preferred security or
interest in a treasury security, as the case may be, will
equal the cash paid for that additional FELINE PRIDES plus
an amount equal to the negative value of the related
purchase contract, and therefore will be $_____ and $_____,
respectively, and no amount will be allocated to the related
purchase contract.
This position generally will be binding on each beneficial owner of
each Income PRIDES, but not on the IRS. As long as FELINE PRIDES are in the
form of Income PRIDES or Growth PRIDES, the related trust preferred
securities or the appropriate applicable ownership interest of the treasury
portfolio or treasury securities, as applicable, will be pledged to the
collateral agent to secure your obligation to purchase our common stock
under the related purchase contracts.
SUBSTITUTION OF PLEDGED SECURITIES
Each holder of an Income PRIDES, unless a tax event redemption has
occurred, will have the right, at any time on or prior to the fifth
business day immediately preceding February 16, 2001, to substitute for the
related trust preferred securities held by the collateral agent treasury
securities in an aggregate principal amount equal to the aggregate stated
liquidation amount of those trust preferred securities.
The treasury securities will be pledged with the collateral agent
to secure the holder's obligation to purchase our common stock under the
related purchase contracts. Because treasury securities are issued in
integral multiples of $1,000, holders of Income PRIDES may make the
substitution only in integral multiples of 20 Income PRIDES. However, if a
tax event redemption has occurred prior to February 16, 2001, and the
treasury portfolio has become a component of the Income PRIDES, you may
make those substitutions only in integral multiples of 160,000 Income
PRIDES by obtaining the release of the treasury portfolio, rather than the
trust preferred securities, at any time on or prior to the second business
day immediately preceding February 16, 2001.
FELINE PRIDES with respect to which treasury securities have been
substituted for the related trust preferred securities or the appropriate
applicable ownership interest of the treasury portfolio, as the case may
be, as collateral to secure that holder's obligation under the related
purchase contracts will be referred to as Growth PRIDES.
To create 20 Growth PRIDES, unless a tax event redemption has occurred,
you must
(a) deposit with the collateral agent a treasury security having
a principal amount at maturity of $1,000 and
(b) transfer 20 Income PRIDES to the purchase contract agent
accompanied by a notice stating that you have deposited a
treasury security with the collateral agent and are
requesting that the purchase contract agent instruct the
collateral agent to release to you the 20 trust preferred
securities relating to the 20 Income PRIDES.
Because contract adjustment payments are at a higher rate for
Growth PRIDES than for Income PRIDES, you will also be required to deliver
cash in an amount equal to the excess of the contract adjustment payments
that would have accrued since the last payment date through the date of
substitution on the Growth PRIDES being created by you, over the contract
adjustment payments that have accrued over the same period on the related
Income PRIDES.
Upon the deposit and the receipt of an instruction from the purchase
contract agent, the collateral agent will effect the release of the related
20 trust preferred securities from the pledge under the pledge agreement
free and clear of our security interest to the purchase contract agent,
which will
(a) cancel the 20 Income PRIDES,
(b) transfer to you the 20 related trust preferred securities, and
(c) deliver to you 20 Growth PRIDES.
The treasury security will be substituted for the trust preferred
securities and will be pledged with the collateral agent to secure your
obligation to purchase our common stock under the related purchase
contracts. The related trust preferred securities released to you will
trade separately from the resulting Growth PRIDES. Contract adjustment
payments will be payable by us on those Growth PRIDES on each payment date
from the later of and the last payment date on which contract
adjustment payments were paid. In addition, OID for United States federal
income tax purposes will accrue on the related treasury securities.
Distributions on any trust preferred securities, up to but not including
February 16, 2001, including after a substitution of collateral resulting
in the creation of Growth PRIDES, will continue to be payable quarterly by
the trust at the rate of 6.45% of $50 per year, subject to our deferral
rights.
Each holder of a Growth PRIDES, unless a tax event redemption has
occurred, will have the right, at any time on or prior to the fifth
business day immediately preceding February 16, 2001, to substitute for the
related treasury securities held by the collateral agent trust preferred
securities in an aggregate principal amount equal to the aggregate stated
liquidation amount of those treasury securities, thereby creating Income
PRIDES.
The trust preferred securities will be pledged with the collateral
agent to secure the holder's obligation to purchase our common stock under
the related purchase contract. Because treasury securities are issued in
integral multiples of $1,000, you may make those substitutions only in
integral multiples of 20 Growth PRIDES. However, if a tax event redemption
has occurred and the treasury portfolio has become a component of the
Income PRIDES, you may make that substitution only in integral multiples of
160,000 Growth PRIDES, at any time, on or prior to the second business day
immediately preceding February 16, 2001.
To create 20 Income PRIDES, unless a tax event redemption has
occurred, you must
(a) deposit with the collateral agent 20 trust preferred securities
and
(b) transfer 20 Growth PRIDES certificates to the purchase
contract agent accompanied by a notice stating that you had
deposited 20 trust preferred securities with the collateral
agent and are requesting that the purchase contract agent
instruct the collateral agent to release to you the treasury
security relating to those Growth PRIDES.
Upon the deposit and receipt of an instruction from the purchase
contract agent, the collateral agent will effect the release of the related
treasury security from the pledge under the pledge agreement free and clear
of our security interest to the purchase contract agent, which will
(a) cancel the 20 Growth PRIDES,
(b) transfer to you the related treasury security and
(c) deliver to you 20 Income PRIDES.
The substituted trust preferred securities will be pledged with
the collateral agent to secure your obligation to purchase our common stock
under the related purchase contacts. Cumulative cash distribution, payable
quarterly at a rate of 7.5% of $50 per year on those Income PRIDES, subject
to our deferral rights, will be payable by us on those Income PRIDES on
each payment date from the later of and the last payment date on which
those cumulative cash distributions, if any, were paid.
Holders who elect to substitute pledged securities, creating or
recreating Growth PRIDES or Income PRIDES, shall be responsible for any
fees or expenses payable in connection with
substitution.
RECREATING INCOME PRIDES OR GROWTH PRIDES
On or prior to the fifth business day immediately preceding February
16, 2001, a holder of Growth PRIDES or Income PRIDES may, unless a tax
event redemption has occurred, recreate Income PRIDES or Growth PRIDES by
(a) depositing with the collateral agent 20 trust preferred
securities or a treasury security and
(b) transferring 20 Growth PRIDES or Income PRIDES, as
applicable, to the purchase contract agent accompanied by a
notice stating that the Growth PRIDES or Income PRIDES
holder has deposited 20 trust preferred securities or a
treasury security with the collateral agent and requesting
that the purchase contract agent instruct the collateral
agent to release to that holder the related treasury
security or trust preferred securities, as applicable.
Upon the deposit and receipt of instructions from the purchase
contract agent, the collateral agent will effect the release of the related
treasury security or trust preferred securities, as applicable, from the
pledge of the pledge agreement free and clear of our security interest to
the purchase contract agent, which will
(a) cancel the 20 Growth PRIDES or Income PRIDES, as applicable,
(b) transfer to you the treasury security or trust preferred
securities, as applicable, and
(c) deliver to you 20 Income PRIDES or 20 Growth PRIDES, as
applicable.
If, however, a tax event redemption has occurred prior to February
16, 2001 and the treasury portfolio has become a component of the Income
PRIDES, holders of Growth PRIDES or Income PRIDES, as applicable, may make
those substitutions ( by using, in the case of the Growth PRIDES, the
appropriate applicable ownership interest of the treasury portfolio rather
than the trust preferred securities) at any time on or prior to the second
business day immediately preceding February 16, 2001, but only in integral
multiples of 160,000 Growth PRIDES or Income PRIDES, as applicable.
Because Contract adjustment payments are at a higher rate for Growth
PRIDES than for Income PRIDES, holders of Income PRIDES wishing to recreate
Growth PRIDES will also be required to deliver cash in an amount equal to
the excess of the contract adjustment payments that would have accrued
since the last payment date through the date of substitution on the Growth
PRIDES being recreated by those holders, over the contract adjustment
payments that have accrued over the same time period on the related Income
PRIDES.
The substituted trust preferred securities, the appropriate
applicable ownership interest of the treasury portfolio or a treasury
security will be pledged with the collateral agent to secure your
obligation to purchase our common stock under the related purchase
contracts.
CURRENT PAYMENTS
Holders of Income PRIDES are entitled to receive aggregate cash
distributions at a rate of 7.5% of $50 per year from and after through
and including February 15, 2001, payable quarterly in arrears. The
quarterly payments on the Income PRIDES will consist of
(1) cumulative cash distributions on the related trust preferred
securities or the treasury portfolio, as applicable, payable
at the rate of 6.45% of $50 per year and
(2) contract adjustment payments payable by us at the rate of 1.05%
of $50 per year,
subject, in the case of distributions on the trust preferred
securities and the contract adjustment payments, to our right of deferral.
Each holder of Growth PRIDES will be entitled to receive quarterly
contract adjustment payments payable by the us at the rate of 1.3% of $50
per year, subject to our rights of deferral. In addition, OID will accrue
on the related treasury securities.
The ability of the trust to make the quarterly distributions on the
trust preferred securities is solely dependent upon the receipt of
corresponding interest payments from us on the debentures. We have the
right at any time, and from time to time, limited to a period not extending
beyond February 16, 2003, to defer the interest payments on the debentures.
As a consequence of that deferral, unless a tax event redemption has
occurred, quarterly distributions to holders of Income PRIDES or any trust
preferred securities outstanding after February 16, 2001 or after a
substitution of collateral resulting in the creation of Growth PRIDES would
be deferred. However, despite the deferral, the distributions would
continue to accumulate quarterly and would accrue interest compounded
quarterly at the rate of 6.45% per year through and including February 15,
2001, and at the reset rate afterwards.
We also have the right to defer the payment of contract adjustment
payments on the related purchase contracts until February 16, 2001.
However, deferred contract adjustment payments will bear additional
contract adjustment payments at the rate of 7.5% per year. The deferred
installments of contract adjustment payments, together with the additional
contract adjustment payments, shall be referred to as the "deferred
contract adjustment payments."
If a tax event redemption has occurred and the treasury portfolio
has become a component of the Income PRIDES, quarterly distributions on the
treasury portfolio, as a portion of the cumulative quarterly distributions
to the holders of Income PRIDES, will not be deferred.
Our obligations with respect to the debentures will be senior and
unsecured and will rank on a parity in right of payment with all our other
senior unsecured obligations. Our obligations with respect to the contract
adjustment payments will be subordinated and junior in right of payment to
our senior indebtedness.
VALUATION
The theoretical value of the new FELINE PRIDES equals the
theoretical value of the current FELINE PRIDES plus $17.57 as of , 1999.
The theoretical value of the additional FELINE PRIDES equals 100% of the
theoretical value of the current FELINE PRIDES as of , 1999. Theoretical
value is the value of a FELINE PRIDES calculated in accordance with the
formula set forth , which is a generally accepted method for valuing
similar securities. The theoretical values are only as of the date rights
are issued. We, Merrill Lynch or any other party to the settlement cannot
and are not assuring or guaranteeing the values and market prices for the
new FELINE PRIDES and the additional FELINE PRIDES.
The calculation agent will conduct the valuation process pursuant to
the following steps. These steps are illustrated in the table entitled
"Hypothetical Valuation across a Range of Stock Prices" below.
First, the calculation agent will determine the theoretical value of
the current FELINE PRIDES marked "f". The additional FELINE PRIDES are
designed to have a theoretical value equal to 100% of the theoretical value
of the current FELINE PRIDES. The current FELINE PRIDES will be valued as a
sum of their component parts:
o Fixed Income Component:
o Present Value of 7.50% coupons discounted at our
debt rate
o Present Value of $50 stated value discounted at term
LIBOR
o Options Component:
o Short 1.3514 puts struck at $37.00 per share
o Long 1.0395 calls struck at $48.10 per share
Both options are valued assuming a discount rate of term LIBOR and
using a trailing 100-day volatility schedule as determined by Bloomberg LP.
Second, the calculation agent will determine the theoretical value
of the new FELINE PRIDES:
o The new FELINE PRIDES are designed to have a value equal to
the theoretical value of current FELINE PRIDES plus $17.57
Third, the calculation agent will determine the settlement rate that
generates the theoretical value of the new FELINE PRIDES:
o The new FELINE PRIDES have the same coupons and maturity as
the current FELINE PRIDES and the additional FELINE PRIDES.
o The equity value of the new FELINE PRIDES is equal to the
theoretical value of the new FELINE PRIDES minus the present
value of the coupons.
o The settlement rate will be the equity value of the new
FELINE PRIDES divided by the closing common stock price on
the determination date.
Hypothetical Valuation across a Range of Stock Prices
Stock Price as of
Determination Date $5.00 $10.00 $15.00 $17.4375 $20.00 $25.00 $30.00 $35.00 $40.00
PV Coupons(1) $6.99 $6.99 $6.99 $6.99 $6.99 $6.99 $6.99 $6.99 $6.99
PV Principal (2) $45.06 $45.06 $45.06 $45.06 $45.06 $45.06 $45.06 $45.06 $45.06
Put Value (2)(3) ($38.36)($32.19)($26.94) ($24.72) ($22.61)($19.08) ($16.19) ($13.82) ($11.87)
Call Value(2)(3) $0.02 $0.27 $1.00 $1.57 $2.30 $4.15 $6.48 $9.22 $12.32
Current & additional
FELINE PRIDES
Value $13.71 $20.13 $26.11 $28.90 $31.74 $37.12 $42.34 $47.45 $52.50
Value of 1.5 rights
assumed as of
determination date $17.57 $17.57 $17.57 $17.57 $17.57 $17.57 $17.57 $17.57 $17.57
new FELINE
PRIDES Value $31.28 $37.70 $43.68 $46.47 $49.31 $54.69 $59.91 $65.02 $70.07
new FELINE
PRIDES Equity
Value $24.29 $30.71 $36.69 $39.48 $42.32 $47.70 $52.92 $58.03 $63.08
Settlement Rate 4.8580 3.0710 2.4460 2.2641 2.1160 1.9080 1.7640 1.6580 1.5770
The figures are provided by way of example only. The actual values
will be determined by the calculation agent as of the close of business on
the determination date. The theoretical values are only as of the date that
the rights are issued:
(1) discounted at two-year Eurodollar LIBOR of 5.47% + 1.5%
credit spread determined as of March 15, 1999;
(2) discounted at two-year Eurodollar LIBOR of 5.47% determined
as of March 15, 1999; and
(3) historical volatility over the previous 100 trading days of
60.0% used in valuing options determined as of March 15,
1999.
The prices we have set for the additional FELINE PRIDES and new
FELINE PRIDES are not necessarily an indication of our actual value or of
the value of the FELINE PRIDES or common stock. We cannot assure you that
the market price of the FELINE PRIDES will not decline during this
offering. We also cannot assure you that we will be able to sell new FELINE
PRIDES or additional FELINE PRIDES at a price equal to or greater to the
prices determined here.
VOTING AND OTHER RIGHTS
Holders of trust preferred securities, in that capacity, will not
be entitled to vote to appoint, remove or replace, or to increase or
decrease the number of regular trustees and will generally have no voting
rights except in limited circumstances. Holders of purchase contracts
relating to the Income PRIDES or Growth PRIDES, in that capacity, will have
no voting or other rights in respect of our common stock.
LISTING OF THE SECURITIES
We have applied to list the new Income PRIDES and the new Growth
PRIDES on the NYSE subject to official notice of issuance and minimum
distribution requirements. The additional Income PRIDES and the additional
Growth PRIDES, if issued, will be listed under the symbols "CDPrI" and
"CDPrG," respectively, the same symbols as for the current Income PRIDES
and the current Growth PRIDES.
NYSE SYMBOL OF COMMON STOCK
The common stock is listed on the NYSE under the symbol "CD." The
current Income PRIDES and the current Growth PRIDES are listed under the
symbols "CDPrI" and "CDPrG," respectively.
MISCELLANEOUS
We or our affiliates may from time to time purchase any of the
securities offered in this prospectus which are then outstanding by tender,
in the open market or by private agreement.
DESCRIPTION OF THE PURCHASE CONTRACTS
GENERAL
Each purchase contract underlying a FELINE PRIDES, unless earlier
terminated, or earlier settled at your option, will obligate you to
purchase, and us to sell, on February 16, 2001, for an amount in cash equal
to $50, a number of newly issued shares of our common stock equal to the
settlement rate.
The settlement rate, which is the number of newly issued shares of
our common stock issuable upon settlement of a purchase contract on
February 16, 2001, will be calculated for additional FELINE PRIDES, subject
to adjustment under certain circumstances, as follows:
(a) if the applicable market value is equal to or greater than
the threshold appreciation price of $48.10, which is 30%
above $37, the last reported sale price of the common stock
on February 24, 1998, the settlement rate, which is equal to
$50 divided by $48.10, will be 1.0395; accordingly, if,
between the date of this prospectus and the period during
which the applicable market value is measured, the market
price for the common stock increases to an amount that is
higher than $48.10, the aggregate market value of the shares
of common stock issued upon settlement of each purchase
contract, assuming that this market value is the same as the
applicable market value of the common stock, will be higher
than $50, and if the market price equals $48.10, the
aggregate market value of those shares, assuming that this
market value is the same as the applicable market value of
the common stock, will equal $50;
(b) if the applicable market value is less than $48.10 but
greater than $37, the settlement rate will be equal to $50
divided by the applicable market value; accordingly, if the
market price for the common stock increases between the date
of this prospectus and the period during which the
applicable market value is measured but that market price is
less than $48.10, the aggregate market value of the shares
of common stock issued upon settlement of each purchase
contract, assuming that this market value is the same as the
applicable market value of the common stock, will equal $50;
and
(c) if the applicable market value is less than or equal to $37,
the settlement rate, which is equal to $50 divided by $37,
will be 1.3514; accordingly, if the market price for the
common stock decreases between the date of this prospectus
and the period during which the applicable market value is
measured, the aggregate market value of the shares of common
stock issued upon settlement of each purchase contract,
assuming that the market value is the same as the applicable
market value of the common stock, will be less than $50, and
if the market price stays the same, the aggregate market
value of those shares, assuming that this market value is
the same as the applicable market value of the common stock,
will equal $50.
The applicable market value means the average of the closing prices
per share of common stock on each of the twenty consecutive trading days
ending on the third trading day immediately preceding February 16, 2001.
The closing price of the common stock on any date of determination
means the closing sale price or, if no closing price is reported, the last
reported sale price of the common stock on the NYSE on that date. If the
common stock is not listed for trading on the NYSE on any of those dates,
the closing price of the common stock on any date of determination means
the closing sales price as reported in the composite transactions for the
principal U.S. securities exchange on which the common stock is so listed,
or if the common stock is not so listed on a U.S. national or regional
securities exchange, as reported by the Nasdaq stock market, or, if the
common stock is not so reported, the last quoted bid price for the common
stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization or, if that bid price is not available, the
market value of the common stock on that date as determined by a nationally
recognized independent investment banking firm retained by us for this
purpose.
A trading day is a day on which the common stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the common stock.
Each purchase contract underlying a new FELINE PRIDES, unless
earlier terminated, or earlier settled at your option, will obligate you to
purchase, and us to sell, on February 16, 2001, for $50 cash, a number of
newly issued shares of our common stock equal to the settlement rate.
Unlike the settlement rate of the additional FELINE PRIDES and
current FELINE PRIDES, which varies depending on the applicable market
value, the settlement rate of the new FELINE PRIDES is fixed at . At the
settlement date, we will issue a holder of new FELINE PRIDES shares of
common stock per each new FELINE PRIDES, regardless of the market price of
our common stock.
The new FELINE PRIDES settlement rate entitles a holder of new
FELINE PRIDES to purchase, and obligates us to sell, a number of newly
issued shares of common stock greater than the number issued to a holder of
current FELINE PRIDES or additional FELINE PRIDES. The difference in value
between the amount of common stock we will issue a holder of current FELINE
PRIDES or additional FELINE PRIDES and the amount of common stock we will
issue a holder of new FELINE PRIDES will equal $17.57 per new FELINE
PRIDES, subject to adjustment for expenses. We selected the fixed
settlement because, given an initial stock price of $17.4375, this rate
will return $11.71 of value per right. One and a half rights are required
to generate the additional value of $17.57 for each new FELINE PRIDES.
The following table demonstrates the net additional shares per
right to be delivered to a holder of new FELINE PRIDES, as compared to
current FELINE PRIDES and additional FELINE PRIDES, upon settlement of the
related purchase contracts. The table displays that the value of the right
varies positively with the price of our common stock. Because the new
FELINE PRIDES settlement rate is fixed, the higher the price of our stock,
the more value the holder of new FELINE PRIDES will receive for its fixed
amount of common stock. The values in the table are theoretical values and
may not represent the price that may actually be realized in the market.
The actual values will be determined at the close of the determination
date, which will take place two days prior to the distribution of the
rights.
NET ADDITIONAL SHARES FROM RIGHT:
STOCK CONVERSION RATIOS
-----------------------
A B C D E
STOCK Current New Net Shares VALUE PER
PRICE & Addi PRIDES Per Right RIGHT
tional (C-B)x2/3 (AXD)
PRIDES
- -------- --------- --------- ---------- ----------
5 1.3514 0.6085 3.04
10 1.3514 0.6085 6.08
15 1.3514 0.6085 9.13
17.4375 1.3514 0.6085 10.61
20 1.3514 0.6085 12.17
30 1.3514 0.6085 18.25
35 1.3514 0.6085 21.30
37 1.3514 0.6085 22.51
39 1.2821 0.6547 25.53
41 1.2195 0.6964 28.55
43 1.1628 0.7342 31.57
45 1.1111 0.7687 34.59
47 1.0638 0.8002 37.61
50 1.0395 0.8164 40.82
No fractional shares of common stock will be issued by us pursuant
to the purchase contracts. In place of fractional shares otherwise
issuable, calculated on an aggregate basis, in respect of the purchase
contracts you are settling, you will be entitled to receive an amount of
cash equal to the fractional share times the applicable market value.
On the business day immediately preceding February 16, 2001, unless
(1) you have settled the related purchase contracts prior
to February 16, 2001 through the early delivery of
cash to the purchase contract agent, in the manner
described under "-Early Settlement,"
(2) in the case of Income PRIDES, you have settled the
related purchase contracts with separate cash on the
business day immediately preceding February 16, 2001,
having given prior notice in the manner described
under "--Notice to Settle with Cash",
(3) you have had the trust preferred securities related
to your purchase contracts remarketed in the manner
described in this prospectus, or
(4) an event described under "--Termination" below has
occurred, then
In the case of Income PRIDES, unless a tax event redemption has
occurred, we will exercise our rights as a secured party to dispose of the
trust preferred securities in accordance with applicable law. In the case
of Growth PRIDES or Income PRIDES, if a tax event redemption has occurred,
the principal amount of the related treasury securities or the appropriate
applicable ownership interest of the treasury portfolio, as applicable,
when paid at maturity, will automatically be applied to satisfy in full
your obligation to purchase common stock under the related purchase
contracts. The common stock will then be issued and delivered to you or
your designee, upon presentation and surrender of the certificate
evidencing the FELINE PRIDES and payment by you of any transfer or similar
taxes payable in connection with the issuance of the common stock to any
person other than you. Where a holder of either Income PRIDES or Growth
PRIDES effects the early settlement of the related purchase contracts
through the delivery of cash or, in the case of Income PRIDES, settles the
related purchase contracts with cash on the business day immediately
preceding February 16, 2001, the related trust preferred securities or
treasury securities, as the case may be, will be released to the holder as
described in this prospectus. The funds received by the collateral agent on
the business day immediately preceding February 16, 2001, upon cash
settlement of a purchase contract, will be promptly invested in overnight
permitted investments and paid to us on February 16, 2001. Any funds
received by the collateral agent in respect of the interest earned from the
overnight investment in permitted investments will be distributed to the
purchase contract agent for payment to the holders.
Prior to the date on which shares of common stock are issued in
settlement of purchase contracts, the common stock underlying the related
purchase contracts will not be deemed to be outstanding for any purpose and
the holders of those purchase contracts will not have any voting rights,
rights to dividends or other distributions, rights or privileges of a
stockholder of Cendant by virtue of holding the purchase contracts.
As a holder of an Income PRIDES or Growth PRIDES, you will, by
acceptance and under the terms of the purchase contract agreement and the
related purchase contracts, be deemed to have
(a) irrevocably agreed to be bound by the terms of the related
purchase contracts and the pledge agreement for so long as
you remain a holder of that FELINE PRIDES, and
(b) duly appointed the purchase contract agent as your
attorney-in-fact to enter into and perform the related
purchase contracts on behalf of and in your name.
In addition, as a beneficial owner of Income PRIDES or Growth
PRIDES, you, by acceptance of the interest, will be deemed to have agreed
to treat for United States federal, state and local income and franchise
tax purposes,
(a) yourself as the owner of the related trust preferred
securities, the appropriate applicable ownership interest of
the treasury portfolio or the treasury securities, as the
case may be, and
(b) the debentures as indebtedness that we have issued
REMARKETING
Under the remarketing agreement and subject to the terms of the
remarketing underwriting agreement between the remarketing agent, the
purchase contract agent, us and the trust, the trust preferred securities
of Income PRIDES holders' who have failed to notify the purchase contract
agent, on or prior to the fifth business day immediately preceding February
16, 2001 of their intention to settle the related purchase contracts with
separate cash on the business day immediately preceding February 16, 2001,
will be remarketed on the third business day immediately preceding the
February 16, 2001.
The remarketing agent will use its reasonable efforts to remarket
those trust preferred securities on that date at a price of approximately
100.5% of the aggregate stated liquidation amount of those trust preferred
securities, plus accrued and unpaid distributions, including any deferred
distributions. The portion of the proceeds from that remarketing equal to
the aggregate stated liquidation amount of those trust preferred securities
will automatically be applied to satisfy in full those Income PRIDES
holders' obligations to purchase common stock under the related purchase
contracts. In addition, after deducting as the remarketing fee an amount
not exceeding 25 basis points (.25%) of the aggregate stated liquidation
amount of the remarketed trust preferred securities, from any amount of
those proceeds in excess of the aggregate stated liquidation amount of the
remarketed trust preferred securities plus any accrued and unpaid
distributions, including any deferred distributions, the remarketing agent
will remit the remaining portion of the proceeds, if any, for the benefit
of that holder. Income PRIDES holders whose trust preferred securities are
so remarketed will not otherwise be responsible for the payment of any
remarketing fee.
If, despite using its reasonable efforts, the remarketing agent
cannot remarket the related trust preferred securities of those holders of
Income PRIDES at a price not less than 100% of the aggregate stated
liquidation amount of those trust preferred securities plus accrued and
unpaid distributions, including any deferred distributions, and thus
resulting in a failed remarketing, we will exercise our rights as a secured
party to dispose of the trust preferred securities in accordance with the
applicable law and satisfy in full, from the proceeds of that disposition,
that holder's obligation to purchase common stock under the related
purchase contracts. However, if we exercise those rights as a secured
creditor, any accrued and unpaid distributions, including any deferred
distributions, on those trust preferred securities will be paid in cash by
us to the holders of record of those trust preferred securities. We will
cause a notice of the failed remarketing to be published on the second
business day immediately preceding February 16, 2001 by publication in a
daily newspaper in the English language of general circulation in the city
of New York, which is expected to be The Wall Street Journal. In addition,
we will request, not later than ten nor more than 15 calendar days prior to
the remarketing date, that the depository notify its participants holding
trust preferred securities, Income PRIDES and Growth PRIDES of the
remarketing and of the procedures that must be followed if a trust
preferred security holder wishes to exercise its right to put its trust
preferred security to us as described in this prospectus. We will endeavor
to ensure that a registration statement with regard to the full amount of
the trust preferred securities to be remarketed shall be effective in a
form that will enable the remarketing agent to rely on it in connection
with the remarketing process. It is currently anticipated that Merrill
Lynch, Pierce, Fenner & Smith Incorporated will be the remarketing agent.
EARLY SETTLEMENT
A holder of Income PRIDES may settle the related purchase contracts
on or prior to the fifth business day immediately preceding February 16,
2001 by presenting and surrendering the FELINE PRIDES certificate
evidencing those Income PRIDES at the offices of the purchase contract
agent. The holder should also present the form of election to settle early
on the reverse side of that certificate completed and executed as
indicated, accompanied by payment payable to us in immediately available
funds of an amount equal to $50 times the number of purchase contracts
being settled. However, if a tax event redemption has occurred prior to
February 16, 2001 and the treasury portfolio has become a component of the
Income PRIDES, holders of those Income PRIDES may settle early only in
integral multiples of 160,000 Income PRIDES, and the related appropriate
applicable ownership interest of the treasury portfolio, at any time on or
prior to the second business day immediately preceding February 16, 2001.
A holder of Growth PRIDES may settle the related purchase contracts
on or prior to the second business day immediately preceding February 16,
2001 by presenting and surrendering the FELINE PRIDES certificate
evidencing the Growth PRIDES at the offices of the purchase contract agent
with the form of election to settle early on the reverse side of that
certificate completed and executed as indicated, accompanied by payment in
immediately available funds of an amount equal to $50 times the number of
purchase contracts being settled.
So long as the FELINE PRIDES are evidenced by one or more global
security certificates deposited with the depositary, procedures for early
settlement will also be governed by standing arrangements between the
depositary and the purchase contract agent.
Upon early settlement of the purchase contracts related to any
Income PRIDES or Growth PRIDES:
(a) as a holder of an additional FELINE PRIDES, you will receive
newly issued shares of common stock per Income PRIDES or
Growth PRIDES, regardless of the market price of the common
stock on the date of the early settlement. As a holder of a
new FELINE PRIDES, you will receive shares of common stock
per new FELINE PRIDES. The number of newly issued shares of
common stock in both cases will be subject to adjustment
under the circumstances described in "--Anti-Dilution
Adjustments" below;
(b) the trust preferred securities, the appropriate applicable
ownership interest of the treasury portfolio or the treasury
securities, related to the Income PRIDES or Growth PRIDES,
as applicable, will then be transferred to you free and
clear of our security interest;
(c) your right to receive any deferred contract adjustment
payments on the purchase contracts being settled will be
forfeited;
(d) your right to receive future contract adjustment payments
will terminate; and
(e) no adjustment will be made to or for you on account of any
deferred contract adjustment payments or any amounts accrued
in respect of contract adjustment payments.
If the purchase contract agent receives a FELINE PRIDES
certificate, accompanied by the completed election to settle early form and
the requisite amount of immediately available funds, from you by 5:00 p.m.,
New York City time, on a business day, that day will be considered the
settlement date. If the purchase contract agent receives those documents
after 5:00 p.m., New York City time, on a business day or at any time on a
day that is not a business day, unless you are an Income PRIDES holder and
a tax event redemption has occurred, the next business day will be
considered the settlement date.
Upon early settlement of purchase contracts in the manner described
above, presentation and surrender of the FELINE PRIDES certificate
evidencing the related Income PRIDES or Growth PRIDES and payment of any
transfer or similar taxes payable by the holder in connection with the
issuance of the related common stock to any person other than the holder of
the Income PRIDES or Growth PRIDES, we will cause the shares of common
stock being purchased to be issued, and the related trust preferred
securities, the appropriate applicable ownership interest of the treasury
portfolio or the treasury securities, as the case may be, securing those
purchase contracts to be released from the pledge under the pledge
agreement and transferred, within three business days following the
settlement date, to you or your designee.
NOTICE TO SETTLE WITH CASH
If you want to settle the purchase contract underlying a FELINE
PRIDES with separate cash on the business day immediately preceding
February 16, 2001, you must notify the purchase contract agent by
presenting and surrendering the FELINE PRIDES certificate evidencing those
FELINE PRIDES. You must present the certificates at the offices of the
purchase contract agent with the form of "Notice to Settle by Separate
Cash" on the reverse side of the certificate completed and executed as
indicated. You must present the documents on or prior to 5:00 p.m., New
York City time, on the second business day immediately preceding February
16, 2001 if you are a Growth PRIDES holder or if you are an Income PRIDES
holder and a tax event redemption has occurred. If you are an Income PRIDES
holder, you must present the document on the fifth business day immediately
preceding February 16, 2001.
If you have given notice of your intention to settle the related
purchase contract with separate cash but failed to deliver the cash on the
business day immediately preceding February 16, 2001, then we will exercise
our right as a secured party to dispose of, in accordance with the
applicable law, the related trust preferred securities, the applicable
ownership interest of the treasury portfolio or the treasury securities, as
the case may be, to satisfy in full from the proceeds of that disposition
your obligation to purchase common stock under the related purchase
contract.
CONTRACT ADJUSTMENT PAYMENTS
Contract adjustment payments will be fixed at a rate per year of
1.05% of $50 per purchase contract in the case of Income PRIDES, and at a
rate per year of 1.3% of $50 per purchase contract in the case of Growth
PRIDES. Contract adjustment payments that are not paid when due, after
giving effect to any permitted deferrals, will continue to accrue at the
rate per year of 7.5% compounded quarterly, until paid. Contract adjustment
payments payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months. Contract adjustment payments will accrue from
and will be payable quarterly in arrears on February 16, May 16, August 16
and November 16 of each year, commencing .
Contract adjustment payments will be payable to the holders of
purchase contracts as they appear on the books and records of the purchase
contract agent on the relevant record dates.
As long as the Income PRIDES or Growth PRIDES remain in book-entry
only form, the record dates will be one business day prior to the relevant
payment dates. Those distributions will be paid through the purchase
contract agent who will hold amounts received in respect of the contract
adjustment payments for your benefit relating to those Income PRIDES or
Growth PRIDES. Subject to any applicable laws and regulations, each of
those payments will be made as described under "--Book-Entry System." If
the Income PRIDES or Growth PRIDES do not continue to remain in book-entry
only form, we shall have the right to select relevant record dates, which
shall be more than one business day but less than 60 business days prior to
the relevant payment dates.
If any date on which contract adjustment payments are to be made
on the purchase contracts related to the Income PRIDES or Growth PRIDES is
not a business day, then payment of the contract adjustment payments
payable on that date will be made on the next succeeding day which is a
business day, and no interest or payment will be paid in respect of the
delay. However, if that business day is in the next succeeding calendar
year, that payment shall be made on the immediately preceding business day,
in each case with the same force and effect as if made on that payment
date. A "business day" shall mean any day other than Saturday, Sunday or
any day on which banking institutions in New York City in the State of New
York are permitted or required by any applicable law to close.
Our obligations with respect to contract adjustment payments will
be subordinated and junior in right of payment to our obligations under any
senior indebtedness.
OPTION TO DEFER CONTRACT ADJUSTMENT PAYMENTS
We may, at our option and upon prior written notice to the holders
of the FELINE PRIDES and the purchase contract agent, defer the payment of
contract adjustment payments on the purchase contracts until no later than
February 16, 2001. However, deferred contract adjustment payments, if any,
will bear additional contract adjustment payments at the rate of 7.5% per
year, compounding on each succeeding payment date, until paid. If the
purchase contracts are terminated upon the occurrence of specific events of
our bankruptcy, insolvency or reorganization, the right to receive contract
adjustment payments and deferred contract adjustment payments, if any, will
also terminate.
If we elect to defer the payment of contract adjustment payments on
the purchase contracts until February 16, 2001, you will receive on
February 16, 2001, in respect of the deferred contract adjustment payments,
instead of a cash payment, a number of shares of our common stock equal to
(x) the aggregate amount of deferred contract adjustment payments payable
to you divided by (y) the applicable market value.
If we exercise our option to defer the payment of contract
adjustment payments, until the deferred contract adjustment payments have
been paid, we shall not declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a liquidation
payment with respect to, any of our capital stock or make guarantee
payments with respect to the above-mentioned, other than
o purchases or acquisitions of our capital stock in connection
with the satisfaction of our obligations under any employee
or agent benefit plans or under any contract or security
outstanding on the date of that event requiring us to
purchase our capital stock,
o as a result of a reclassification of our capital stock or
the exchange or conversion of one class or series of our
capital stock for another class or series of our capital
stock,
o the purchase of fractional interests in shares of our
capital stock pursuant to the conversion or exchange
provisions of our capital stock or the security being
converted or exchanged,
o dividends or distributions in our capital stock (or rights
to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of
capital stock or
o redemptions or repurchases of any rights outstanding under a
shareholder rights plan.
ANTI-DILUTION ADJUSTMENTS
The formula for determining the settlement rate will be subject to
adjustment, without duplication, upon the occurrence of events, including:
(a) the payment of dividends and distributions of our common
stock on our common stock;
(b) the issuance to all holders of our common stock of rights,
warrants or options entitling them, for a period of up to 45
days, to subscribe for or purchase our common stock at less
than the current market price;
(c) subdivisions, splits and combinations of our common stock;
(d) distributions to all holders of our common stock of our
evidences of indebtedness, shares of capital stock,
securities, cash or property, excluding any dividend or
distribution covered by clause (a) or (b) above and any
dividend or distribution paid exclusively in cash;
(e) distributions consisting exclusively of cash to all holders
of our common stock in an aggregate amount that, together
with
o all-cash distributions made within the preceding 12
months and
o any cash and the fair market value, as of the
expiration of the tender or exchange offer referred
to below, of consideration payable in respect of any
tender or exchange offer by us or a subsidiary of
ours for the common stock concluded within the
preceding 12 months, exceeds 15% of our aggregate
market capitalization; the aggregate market
capitalization being the product of the current
market price of the common stock multiplied by the
number of shares of common stock then outstanding on
the date of that distribution; and
(f) the successful completion of a tender or exchange offer made
by us or any subsidiary of ours for our common stock which
involves an aggregate consideration that, together with
o any cash and the fair market value of consideration
payable in respect of any tender or exchange offer by
us or a subsidiary of ours for the common stock
concluded within the preceding 12 months and
o the aggregate amount of any all-cash distributions to
all holders of our common stock made within the
preceding 12 months, exceeds 15% of our aggregate
market capitalization on the expiration of the tender
or exchange offer.
The "current market price" per share of common stock on any day
means the average of the daily closing prices for the five consecutive
trading days selected by us commencing not more than 30 trading days
before, and ending not later than, the earlier of the day in question and
the day before the "ex date" with respect to the issuance or distribution
requiring that computation. For purposes of this paragraph, the term "ex
date," when used with respect to any issuance or distribution, shall mean
the first date on which the common stock trades regular way on that
exchange or in that market without the right to receive the issuance or
distribution.
The new FELINE PRIDES will benefit from additional anti-dilution
provisions, providing that if after the distribution date of the rights and
prior to the date which is 70 days after the distribution date:
(a) we issue, undertake, or agree to issue in one or a series of
related transactions an aggregate of more than one million
shares of our common stock or securities which are or may be
convertible into, exchangeable for, or which confer or may
confer a right to acquire more than one million shares of
our common stock, subject to adjustment for mergers,
consolidations, stock splits, recapitalizations, or similar
transactions, other than for cash at fair value, as
determined in good faith by our board of directors or as
consideration for an acquisition of a business or of assets
to be used in its business; and
(b) following the announcement of our intention to issue those
shares or other securities, which includes a description of
the material terms of that issuance, the average of the
closing prices of our common stock on the NYSE for the ten
consecutive trading days following the announcement is less
than the closing price of the stock on the NYSE on the
trading day immediately prior to the announcement, then the
settlement rate shall be adjusted further, but using the
average as the market value of our common stock for purposes
of that calculation.
We will deem these agreements, undertakings or issuances as a
material corporate event in determining the timing of any announcements.
In the case of reclassifications, consolidations, mergers, sales or
transfers of assets or other transactions in accordance to which our common
stock is converted into the right to receive securities, cash or property,
each purchase contract then outstanding would, without the consent of the
holders of the related Income PRIDES or Growth PRIDES, become a contract to
purchase only the kind and amount of securities, cash and property
receivable upon consummation of the transaction by a holder of the number
of shares of common stock which would have been received by the holder of
the related Income PRIDES or Growth PRIDES immediately prior to the date of
consummation of that transaction if that holder had then settled that
purchase contract.
If at any time (1) we make a distribution of property to our
stockholders which would be taxable to those stockholders as a dividend for
United States federal income tax purposes, which includes generally
distributions of our evidences of indebtedness or assets, but generally not
stock dividends or rights to subscribe to capital stock; and, (2) according
to the settlement rate adjustment provisions of the purchase contract
agreement, the settlement rate is increased, that increase may give rise to
a taxable dividend to holders of FELINE PRIDES.
In addition, we may make increases to the settlement rate as our
board of directors deems advisable to avoid or diminish any income tax to
holders of our capital stock resulting from any dividend, distribution of
capital stock, distribution of rights to acquire capital stock or from any
event treated similarly for income tax purposes or for any other reasons.
Adjustments to the settlement rate will be calculated to the
nearest 1/10,000th of a share. No adjustment in the settlement rate shall
be required unless that adjustment would require an increase or decrease of
at least one percent in the settlement rate. However, any adjustments which
by reason of the above are not required to be made shall be carried forward
and taken into account in any subsequent adjustment.
We will be required, within ten business days following the
adjustment of the settlement rate, to provide written notice to the
purchase contract agent of the occurrence of that event and a statement
specifying in reasonable detail the method by which the adjustment to the
settlement rate was determined and the revised settlement rate.
Each adjustment to the settlement rate will result in a
corresponding adjustment to the number of shares of common stock issuable
upon early settlement of a purchase contract.
TERMINATION OF PURCHASE CONTRACTS
The purchase contracts, our related rights and obligations and
those of the holders of the FELINE PRIDES, including the right to receive
accrued contract adjustment payments or deferred contract adjustment
payments and the right and obligation to purchase common stock, will
automatically terminate upon the occurrence of particular events of our
bankruptcy, insolvency or reorganization.
Upon termination, the collateral agent will release the related
trust preferred securities or the appropriate applicable ownership interest
of the treasury portfolio and the treasury securities held by it to the
purchase contract agent for distribution to the holders. The release will
be subject in the case of the treasury portfolio to the purchase contract
agent's disposition of the subject securities for cash and the payment of
the cash to the holders to the extent that the holders would otherwise have
been entitled to receive less than $1,000 of any security. Upon
termination, however, the release and distribution may be subject to a
delay. If we become the subject of a case under the Bankruptcy Code, a
delay may occur as a result of the automatic stay under the Bankruptcy Code
and continue until the automatic stay has been lifted. We expect the delay
to be limited.
PLEDGED SECURITIES AND PLEDGE AGREEMENT
The trust preferred securities related to the Income PRIDES, or the
treasury portfolio if a tax event redemption has occurred prior to February
16, 2001 and the treasury securities related to the Growth PRIDES
(collectively, the "pledged securities") will be pledged to the collateral
agent, for our benefit. According to the pledge agreement, the pledged
securities will secure the obligations of holders of FELINE PRIDES to
purchase our common stock under the related purchase contracts. Your rights
to the related pledged securities will be subject to our security interest
created by the pledge agreement. You will not be permitted to withdraw the
pledged securities related to the Income PRIDES or Growth PRIDES from the
pledge arrangement except
(1) to substitute treasury securities for the related trust
preferred securities or the appropriate applicable ownership
interest of the treasury portfolio,
(2) to substitute trust preferred securities or the appropriate
applicable ownership interest of the treasury portfolio for
the related treasury securities, or
(3) upon the termination or early settlement of the related
purchase contracts.
Subject to the security interest and the terms of the purchase
contract agreement and the pledge agreement, (1) each holder of Income
PRIDES, unless a tax event redemption has occurred, will be entitled
through the purchase contract agent and the collateral agent to all of the
proportional rights and preferences of the related trust preferred
securities, including distribution, voting, redemption, repayment and
liquidation rights, and (2) each holder of Growth PRIDES or Income PRIDES,
if a tax event redemption has occurred, will retain beneficial ownership of
the related treasury securities or the appropriate applicable ownership
interest of the treasury portfolio, pledged in respect of the related
purchase contracts. We will have no interest in the pledged securities
other than our security interest.
Except as described in "Description of the purchase contracts --
General," the collateral agent will, upon receipt of distributions on the
pledged securities, distribute those payments to the purchase contract
agent, which will in turn distribute them, together with contract
adjustment payments received from us, to the persons in whose names the
related Income PRIDES or Growth PRIDES are registered at the close of
business on the record date immediately preceding the date of the
distribution.
BOOK ENTRY-SYSTEM
The Depository Trust Company will act as securities depositary for
the FELINE PRIDES. The FELINE PRIDES will be issued only as
fully-registered securities registered in the name of Cede & Co. (the
"depositary's nominee"). One or more fully-registered global security
certificates, representing the total aggregate number of FELINE PRIDES,
will be issued and deposited with the depositary and will bear a legend
regarding the restrictions on exchanges and registration of transfer
referred to below.
The laws of some jurisdictions require that some purchasers of
securities take physical delivery of securities in definitive form. Those
laws may impair the ability to transfer beneficial interests in the FELINE
PRIDES so long as the FELINE PRIDES are represented by global security
certificates.
The depositary is a limited-purpose trust company organized under
the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the
provisions of section 17A of the Exchange Act.
The depositary holds securities that its participants deposit with
the depositary. The depositary also facilitates the settlement among
participants of securities transactions, including transfers and pledges,
in deposited securities through electronic computerized book-entry changes
in participants' accounts, thus eliminating the need for physical movement
of securities certificates. Direct participants include securities brokers
and dealers, banks, trust companies, clearing corporations and certain
other organizations. The depositary is owned by a number of its direct
participants and by the NYSE, the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. ("participants"). Access
to the depositary system is also available to others, including securities
brokers and dealers, banks and trust companies that clear transactions
through or maintain a direct or indirect custodial relationship with a
direct participant either directly or indirectly ("indirect participants").
The rules applicable to the depositary and its participants are on file
with the commission.
No FELINE PRIDES represented by global security certificates may be
exchanged in whole or in part for FELINE PRIDES registered, and no transfer
of global security certificates in whole or in part may be registered, in
the name of any person other than the depositary or any nominee of the
depositary, unless, however, the depositary has notified us that it is
unwilling or unable to continue as depositary for the global security
certificates, has ceased to be qualified to act as required by the purchase
contract agreement or there is a continuing default by us in respect of our
obligations under one or more purchase contracts. All FELINE PRIDES
represented by one or more global security certificates or any portion of
them will be registered in those names as the depositary may direct.
As long as the depositary or its nominee is the registered owner of
the global security certificates, the depositary or that nominee will be
considered the sole owner and holder of the global security certificates
and all FELINE PRIDES represented by those certificates for all purposes
under the FELINE PRIDES and the purchase contract agreement. Except in the
limited circumstances referred to above, owners of beneficial interests in
global security certificates will not be entitled to have the global
security certificates or the FELINE PRIDES represented by those
certificates registered in their names, will not receive or be entitled to
receive physical delivery of FELINE PRIDES certificates in exchange and
will not be considered to be owners or holders of the global security
certificates or any FELINE PRIDES represented by those certificates for any
purpose under the FELINE PRIDES or the purchase contract agreement. All
payments on the FELINE PRIDES represented by the global security
certificates and all related transfers and deliveries of trust preferred
securities, treasury portfolio, treasury securities and common stock will
be made to the depositary or its nominee as their holder.
Ownership of beneficial interests in the global security
certificates will be limited to participants or persons that may hold
beneficial interests through institutions that have accounts with the
depositary or its nominee. Ownership of beneficial interests in global
security certificates will be shown only on, and the transfer of those
ownership interests will be effected only through, records maintained by
the depositary or its nominee with respect to participants' interests or by
the participant with respect to interests of persons held by the
participants on their behalf.
Procedures for settlement of purchase contracts on February 16,
2001 or upon early settlement will be governed by arrangements among the
depositary, participants and persons that may hold beneficial interests
through participants designed to permit the settlement without the physical
movement of certificates. Payments, transfers, deliveries, exchanges and
other matters relating to beneficial interests in global security
certificates may be subject to various policies and procedures adopted by
the depositary from time to time.
Neither we or any of our agents, nor the purchase contract agent
or any of its agents will have any responsibility or liability for any
aspect of the depositary's or any participant's records relating to, or for
payments made on account of, beneficial interests in global security
certificates, or for maintaining, supervising or reviewing any of the
depositary's records or any participant's records relating to those
beneficial ownership interests.
The information in this section concerning the depositary and its
book-entry system has been obtained from sources that we and the trust
believe to be reliable, but neither we nor the trust take responsibility
for its accuracy.
PROVISIONS OF THE CONTRACT PURCHASE
AGREEMENT AND THE PLEDGE AGREEMENT
OVERVIEW
Distributions on the FELINE PRIDES will be payable, purchase
contracts and documents related to it will be settled and transfers of the
FELINE PRIDES will be registrable at the office of the purchase contract
agent in the Borough of Manhattan, The City of New York. In addition, in
the event that the FELINE PRIDES do not remain in book-entry form, payment
of distributions on the FELINE PRIDES may be made, at our option, by check
mailed to the address of the person entitled to it as shown on the security
register.
Shares of our common stock will be delivered on February 16, 2001
or earlier upon early settlement or, if the purchase contracts have
terminated, the related pledged securities will be delivered potentially
after a delay as a result of the imposition of the automatic stay under the
Bankruptcy Code, in either case upon presentation and surrender of the
FELINE PRIDES certificate at the office of the purchase contract agent. We
expect any delay to be limited.
If you fail to present and surrender the FELINE PRIDES certificate
evidencing the Income PRIDES or Growth PRIDES to the purchase contract
agent on February 16, 2001, the shares of common stock issuable in
settlement of the related purchase contract and in payment of any deferred
contract adjustment payments will be registered in the name of the purchase
contract agent. The shares of common stock, together with any related
distributions, shall be held by the purchase contract agent as agent for
your benefit, until the FELINE PRIDES certificate is presented and
surrendered or you provide satisfactory evidence that the certificate has
been destroyed, lost or stolen, together with any indemnity that may be
required by the purchase contract agent and us.
If the purchase contracts have terminated prior to February 16,
2001, the related pledged securities have been transferred to the purchase
contract agent for distribution to you and you fail to present and
surrender the FELINE PRIDES certificate evidencing your Income PRIDES or
Growth PRIDES to the purchase contract agent, the related pledged
securities delivered to the purchase contract agent and related payments
shall be held by the purchase contract agent as agent for your benefit,
until the FELINE PRIDES certificate is presented or you provide the
evidence and indemnity described above.
The purchase contract agent will have no obligation to invest or to
pay interest on any amounts held by the purchase contract agent pending
distribution.
No service charge will be made for any registration of transfer or
exchange of the FELINE PRIDES, except for any related tax or other
governmental charge that may be imposed.
MODIFICATION
The purchase contract agreement and the pledge agreement will
contain provisions permitting us and the purchase contract agent or
collateral agent with the consent of the holders of not less than a
majority of the purchase contracts at the time outstanding, to modify the
terms of the purchase contracts, the purchase contract agreement and the
pledge agreement. If any particular series of FELINE PRIDES are materially
and adversely affected, the consent of the majority of that series' holders
of contract purchase FELINE PRIDES will be required. However, we, the
purchase contract agent or collateral agent may not, without the consent of
the holder of each outstanding purchase contract,
(a) change any payment date,
(b) change the amount or type of pledged securities related to
the purchase contract, impair the right of the holder of any
pledged securities to receive distributions on the pledged
securities except for the rights of holders of Income PRIDES
to substitute treasury securities for the related trust
preferred securities or treasury portfolio or the rights of
holders of Growth PRIDES to substitute trust preferred
securities or treasury portfolio for the related treasury
securities or otherwise adversely affect the holder's rights
in or to those pledged securities,
(c) change the place or currency of payment or reduce any
contract adjustment payments or any deferred contract
adjustment payments,
(d) impair the right to institute suit for the enforcement of
the purchase contract,
(e) reduce the amount of common stock purchasable under the
purchase contract, increase the price to purchase common
stock on settlement of the purchase contract, change the
purchase contract settlement date or otherwise adversely
affect the holder's rights under the purchase contract or
(f) reduce the above-stated percentage of outstanding purchase
contracts the consent of whose holders is required for the
modification or amendment of the provisions of the purchase
contracts, the purchase contract agreement or the pledge
agreement. However, if any amendment or proposal referred to
above would adversely affect only the Income PRIDES or the
Growth PRIDES, then only the affected class of holder will
be entitled to vote on that amendment or proposal and that
amendment or proposal shall not be effective except with the
consent of the holders of not less than a majority of that
class.
NO CONSENT TO ASSUMPTION
You, by your acceptance of the Income PRIDES or Growth PRIDES,
will, under the terms of the purchase contract agreement and the Income
PRIDES or Growth PRIDES, be deemed expressly to have withheld any consent
to the assumption, i.e., affirmance, of the related purchase contracts by
us or our trustee if we become the subject of a case under the Bankruptcy
Code.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
We will covenant in the purchase contract agreement that we will
not merge or consolidate with any entity or sell, assign, transfer, lease
or convey all or substantially all of our properties and assets to any
person, firm or corporation unless we are the continuing corporation or the
successor corporation is a corporation organized under the laws of the
United States of America or one of its states and that corporation
expressly assumes our obligations under the purchase contracts, the
debentures, the purchase contract agreement and the pledge agreement, and
we or the successor corporation is not, immediately after such merger,
consolidation, sale, assignment, transfer, lease or conveyance, in default
in the performance of any of these obligations.
TITLE
We, the purchase contract agent and the collateral agent may treat
the registered owner of any FELINE PRIDES as its absolute owner for the
purpose of making payment and settling the related purchase contracts and
for all other purposes.
REPLACEMENT OF FELINE PRIDES CERTIFICATES
In the case that physical certificates have been issued, we will
replace any mutilated FELINE PRIDES certificate at the expense of the
holder upon surrender of that certificate to the purchase contract agent.
We will replace any FELINE PRIDES certificates that become destroyed, lost
or stolen at the expense of the holder upon delivery to us and the purchase
contract agent of satisfactory evidence of its destruction, loss or theft.
In the case of a destroyed, lost or stolen FELINE PRIDES certificate, an
indemnity satisfactory to the purchase contract agent and us may be
required at the expense of the holder of the FELINE PRIDES evidenced by
that certificate before a replacement will be issued.
Notwithstanding the above, we will not be obligated to issue any
Income PRIDES or Growth PRIDES on or after February 16, 2001, after early
settlement or after the purchase contracts have terminated. The purchase
contract agreement will provide that, in place of the delivery of a
replacement FELINE PRIDES certificate following February 16, 2001, the
purchase contract agent, upon delivery of the evidence and indemnity
described above, will deliver the common stock issuable pursuant to the
purchase contracts included in the Income PRIDES or Growth PRIDES evidenced
by that certificate. If the purchase contracts have terminated prior to
February 16, 2001, the purchase contract agent will transfer the principal
amount of the pledged securities included in the Income PRIDES or Growth
PRIDES evidenced by that certificate.
GOVERNING LAW
The purchase contract agreement, the pledge agreement and the
purchase contracts will be governed by, and construed in accordance with,
the laws of the State of New York.
INFORMATION CONCERNING THE PURCHASE CONTRACT AGENT
Bank One Trust Company, N.A. will be the purchase contract agent.
The purchase contract agent will act as your agent from time to time. The
purchase contract agreement will not obligate the purchase contract agent
to exercise any discretionary actions in connection with a default under
the terms of the Income PRIDES and Growth PRIDES or the purchase contract
agreement.
The purchase contract will contain provisions limiting the
liability of the purchase contract agent. The purchase contract agreement
will contain provisions under which the purchase contract agent may resign
or be replaced. That resignation or replacement would be effective upon the
appointment of a successor.
INFORMATION CONCERNING THE COLLATERAL AGENT
The Chase Manhattan Bank will be the collateral agent. The
collateral agent will act solely as our agent and will not assume any
obligation or relationship of agency or trust for or with you except for
the obligations owed by a pledgee of property to the owner under the pledge
agreement and applicable law.
The pledge agreement will contain provisions limiting the liability
of the collateral agent. The pledge agreement will contain provisions under
which the collateral agent may resign or be replaced. That resignation or
replacement would be effective upon the appointment of a successor.
The Chase Manhattan Bank maintains commercial banking relationships
with us.
MISCELLANEOUS
The purchase contract agreement will provide that we will pay all
fees and expenses related to
(1) the offering of the FELINE PRIDES,
(2) the retention of the collateral agent and
(3) the enforcement by the purchase contract agent of the rights
of the holders of the FELINE PRIDES.
Should you elect to substitute the related pledged securities,
creating Growth PRIDES or Income PRIDES or recreating Income PRIDES or
Growth PRIDES, you shall be responsible for any fees or expenses payable in
connection with that substitution, as well as any commissions, fees or
other expenses incurred in acquiring the pledged securities to be
substituted, and we shall not be responsible for any of those fees or
expenses.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES
The trust preferred securities will be issued according to the
terms of the applicable declaration. References to the "trust preferred
securities" mean the trust preferred securities issued by any of Cendant
Capital I, Cendant Capital II, Cendant Capital III, Cendant Capital IV or
Cendant Capital V, as the context requires. References to "the declaration"
shall be to any of the declarations governing the terms of the trust
preferred securities issued by Cendant Capital I, Cendant Capital II,
Cendant Capital III, Cendant Capital IV or Cendant Capital V, as the
context requires. This declaration will be qualified as an indenture under
the Trust Indenture Act. The institutional trustee, Wilmington Trust
Company, an independent trustee, will act as indenture trustee for the
trust preferred securities under the declaration for purposes of compliance
with the provisions of the Trust Indenture Act. The terms of the trust
preferred securities will include those stated in such declaration and
those made part of such declaration by the Trust Indenture Act. The
following summary of provisions of the trust preferred securities and the
applicable declaration is not necessarily complete, and reference is made
to the copy of the form declaration, including the definitions, which is
filed as an exhibit to the registration statement relating to this
prospectus, the Trust Act and the Trust Indenture Act. Whenever particular
defined terms are referred to in this prospectus, those defined terms are
incorporated in this prospectus by reference.
OVERVIEW
The declaration authorizes the regular trustees to issue on behalf
of the trust the trust securities, which represent undivided beneficial
ownership interests in the assets of the trust. We will own directly or
indirectly all of the common securities. The common securities rank on a
parity, and related payments will be made on a proportionate basis, with
the trust preferred securities. However, upon the occurrence and during the
continuance of an indenture event of default, the rights of the holders of
the common securities to receive payment of periodic distributions and
payments upon liquidation, redemption and otherwise will be subordinated to
the rights of the holders of the trust preferred securities. The
declaration does not permit the issuance by the trust of any securities
other than the trust securities or the incurrence of any indebtedness by
the trust.
Under the declaration, the institutional trustee will own the
debentures purchased by the trust for the benefit of the holders of the
trust securities. The payment of distributions out of money held by the
trust, and payments upon redemption of the trust preferred securities or
liquidation of the trust, are guaranteed by us to the extent described
under "description of the guarantee." The guarantee, when taken together
with our obligations under the debentures and the indenture and our
obligations under the declaration, including the obligations to pay costs,
expenses, debts and liabilities of the trust other than with respect to the
trust preferred securities, provides a full and unconditional guarantee of
amounts due on the trust preferred securities. Wilmington Trust Company,
the guarantee trustee, will hold the guarantee for the benefit of the
holders of the trust preferred securities. The guarantee does not cover
payment of distributions when the trust does not have sufficient available
funds to pay those distributions. In that case, except in the limited
circumstances in which the holder may take direct action, the remedy of a
holder of trust preferred securities is to vote to direct the institutional
trustee to enforce the institutional trustee's rights under the debentures.
DISTRIBUTIONS
Distributions on the trust preferred securities will be fixed
initially at a rate per year of 6.45% of the stated liquidation amount of
$50 per trust preferred security. Distributions applicable on the trust
preferred securities that remain outstanding on and after February 16, 2001
will be reset on the third business day immediately preceding February 16,
2001. Distributions in arrears for more than one quarter will bear interest
at the rate of 6.45% per year through and including February 15, 2001 and
at the reset rate afterwards, compounded quarterly. The term "distribution"
as used here includes any interest payable unless otherwise stated. The
amount of distributions payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months.
Distributions on the trust preferred securities will be cumulative
and will accrue from and will be payable quarterly in arrears on February
16, May 16, August 16, and November 16 of each year, commencing , when, as
and if funds are available for payment. Distributions will be made by the
institutional trustee, except as otherwise described below.
We have the right under the indenture to defer payments of interest
on the debentures by extending the interest payment period. If we exercise
the right, quarterly distributions on the trust preferred securities would
be deferred during the interest payment period. However, those
distributions would continue to accrue with interest at the rate of 6.45%
per year through and including February 15, 2001, and at the reset rate
afterwards. The right to extend the interest payment period for the
debentures is limited to a period, in the aggregate, not extending beyond
February 16, 2003. If we exercise this right, then
(a) we shall not declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of our capital
stock, other than
o purchases or acquisitions of our capital stock in
connection with the satisfaction of our obligations
under any employee or agent benefit plans or under
any contract or security outstanding on the date of
that event requiring us to purchase our capital
stock,
o as a result of a reclassification of our capital
stock or the exchange or conversion of one class or
series of our capital stock for another class or
series of our capital stock,
o the purchase of fractional interests in shares of our
capital stock pursuant to the conversion or exchange
provisions of our capital stock or the security being
converted or exchanged,
o dividends or distributions in our capital stock (or
rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance
or exchange of capital stock or
o redemptions or repurchases of any rights outstanding
under a shareholder rights plan.
(b) We shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt
securities issued by us that rank junior to those
debentures, and
(c) We shall not make any guarantee payments with respect to the
above other than according to the guarantee or the common
securities guarantee.
Prior to the termination of any extension period, we may further
extend the interest payment period. However, the extension period, together
with all previous and further extensions, may not extend beyond February
16, 2003. Upon the termination of any extension period and the payment of
all amounts then due, we may select a new extension period, subject to the
above requirements. If distributions are deferred, the deferred
distributions and accrued interest shall be paid to holders of record of
the trust preferred securities as they appear on the books and records of
the trust on the record date next following the termination of that
extension period.
The trust must pay distributions on the trust preferred securities
on the dates payable to the extent that it has funds available in the
property account for the payment of those distributions. The trust's funds
available for distribution to you as a holder of the trust preferred
securities will be limited to payments received from us on the debentures.
We guarantee the payment of distributions out of moneys held by the trust
to the extent specified under "Description of the guarantee."
Distributions on the trust preferred securities will be payable to
holders, including the collateral agent, as they appear on the books and
records of the trust on the relevant record dates. As long as the trust
preferred securities remain in book-entry only form, the record dates will
be one business day prior to the relevant payment dates. Distributions will
be paid through the institutional trustee, who will hold amounts received
in respect of the debentures in the property account for your benefit.
Subject to any applicable laws and regulations and the provisions of the
declaration, each payment will be made as described under "--Book-Entry
Only Issuance -- The Depository Trust Company" below. With respect to trust
preferred securities not in book-entry form, the regular trustees shall
have the right to select relevant record dates, which shall be more than
one business day but less than 60 business days prior to the relevant
payment dates.
If any date on which distributions on the trust preferred
securities are to be made is not a business day, payment of the
distributions payable on that date will be made on the next succeeding day
that is a business day, without any interest or other payment in respect of
any delay, but if that business day is in the next succeeding calendar
year, the payment shall be made on the immediately preceding business day,
in each case with the same force and effect as if made on that record date.
MARKET RATE RESET
The applicable quarterly distribution rate on the trust preferred
securities and the interest rate on the related debentures that remain
outstanding on and after February 16, 2001 will be reset on the third
business day immediately preceding February 16, 2001 to the reset rate.
The reset rate will be equal to the sum of the reset spread and the
rate on the two-year benchmark treasury in effect on the third business day
immediately preceding February 16, 2001 and will be determined by the reset
agent as the rate the trust preferred securities should bear for a trust
preferred security to have an approximate market value on the third
business day immediately preceding February 16, 2001 of 100.5% of $50.
However, we may limit the reset rate to be no higher than the rate on the
two-year benchmark treasury on February 16, 2001 plus 200 basis points
(2%). The market value of the trust preferred securities may be less than
100.5% if the reset spread is limited to a maximum of 2%.
The "two-year benchmark treasury" shall mean direct obligations of
the United States, which may be obligations traded on a when-issued basis
only, having a maturity comparable to the remaining term to maturity of the
trust preferred securities, as agreed upon by us and the reset agent. The
rate for the two-year benchmark treasury will be the bid side rate
displayed at 10:00 A.M., New York City time, on the third business day
immediately preceding February 16, 2001 in the Telerate system. If the
Telerate system is (a) no longer available on the third business day
immediately preceding February 16, 2001 or (b) in the opinion of the reset
agent, after consultation with us, no longer an appropriate system from
which to obtain that rate, another nationally recognized quotation system
as, in the opinion of the reset agent, after consultation with the us, is
appropriate. If that rate is not so displayed, the rate for the two-year
benchmark treasury shall be, as calculated by the reset agent, the yield to
maturity for the two-year benchmark treasury, expressed as a bond
equivalent on the basis of a year of 365 or 366 days, and applied on a
daily basis. It shall be computed by taking the arithmetic mean of the
secondary market bid rates, as of 10:30 A.M., New York City time, on the
third business day immediately preceding February 16, 2001, of three
leading United States government securities dealers selected by the reset
agent, after consultation with us. These dealers may include the reset
agent or its affiliate.
We currently anticipate that Merrill Lynch, Pierce, Fenner & Smith
Incorporated will be the investment banking firm acting as the reset agent.
On the tenth business day immediately preceding February 16, 2001,
the two-year benchmark treasury to be used to determine the reset rate on
February 16, 2001 will be selected. On that date, the reset agent will
establish the reset spread to be added to the rate on the two-year
benchmark treasury in effect on the third business day immediately
preceding February 16, 2001, and we will announce the reset spread and the
Two-year benchmark treasury. We will cause a notice of the reset spread and
the two-year benchmark treasury to be published on the business day
following the reset announcement date by publication in a daily newspaper
in the English language of general circulation in The City of New York,
which is expected to be The Wall Street Journal. We will request, not later
than ten nor more than 15 calendar days prior to the reset announcement
date, that the depositary notify its participants holding trust preferred
securities, Income PRIDES or Growth PRIDES of the reset announcement date
and of the procedures that must be followed if any owner of FELINE PRIDES
wants to settle the related purchase contract with cash on the business day
immediately preceding February 16, 2001.
OPTIONAL REMARKETING
Under the remarketing agreement and subject to the terms of the
remarketing underwriting agreement, on or prior to the fifth business day
immediately preceding February 16, 2001, but no earlier than the payment
date immediately preceding February 16, 2001, holders of trust preferred
securities which are not components of Income PRIDES may elect to have
their trust preferred securities remarketed by delivering their trust
preferred securities along with a notice of such election to the custodial
agent. The custodial agent will hold these trust preferred securities in an
account separate from the collateral account in which the pledged
securities will be held. Holders of trust preferred securities electing to
have their trust preferred securities remarketed will also have the right
to withdraw that election on or prior to the fifth business day immediately
preceding February 16, 2001.
On the fourth business day immediately preceding February 16,
2001, the custodial agent will deliver these separate trust preferred
securities to the remarketing agent for remarketing. The remarketing agent
will use its reasonable efforts to remarket these trust preferred
securities on that date at a price of approximately 100.5% of the aggregate
stated liquidation amount of these trust preferred securities, plus accrued
and related unpaid distributions, including any deferred distributions. The
portion of the proceeds from that remarketing equal to the aggregate stated
liquidation amount of these trust preferred securities will automatically
be remitted by the remarketing agent to the custodial agent for the benefit
of the holders of these trust preferred securities. In addition, after
deducting as the remarketing fee an amount not exceeding 25 basis points
(.25%) of the aggregate stated liquidation amount of the remarketed
securities from any amount of those proceeds in excess of the aggregate
stated liquidation amount of the remarketed trust preferred securities plus
any accrued and unpaid distributions, including any deferred distributions,
the remarketing agent will remit to the custodial agent any remaining
portion of the proceeds for the benefit of that holder.
If, despite using its reasonable efforts, the remarketing agent
cannot remarket the related trust preferred securities of these holders at
a price not less than 100% of the aggregate stated liquidation amount of
the trust preferred securities plus accrued and unpaid distributions,
including any deferred distributions and thus, resulting in a failed
remarketing. The custodial agent will promptly return these trust preferred
securities to the custodial agent to release to these holders. We will
cause a notice of the failed remarketing to be published on the second
business day immediately preceding February 16, 2001 by publication in a
daily newspaper in the English language of general circulation in the city
of New York, which is expected to be The Wall Street Journal. In addition,
we will request, not later than ten nor more than 15 calendar days prior to
the remarketing date, that the depository notify its participants holding
trust preferred securities, Income PRIDES and Growth PRIDES of the
remarketing and of the procedures that must be followed if a trust
preferred security holder wishes to exercise its right to put its trust
preferred security to us. We will endeavor to ensure that a registration
statement with regard to the full amount of the trust preferred securities
to be remarketed shall be effective in a form as will enable the
remarketing agent to rely on it in connection with the remarketing process.
We currently anticipate that Merrill Lynch, Pierce, Fenner & Smith
Incorporated will be the remarketing agent.
OPTIONAL REDEMPTION
The debentures are redeemable at our option, in whole but not in
part, on not less than 30 days nor more than 60 days notice, upon the
occurrence and continuation of a tax event under the circumstances
described under "Description of the debentures -- tax event redemption." If
we redeem the debentures upon the occurrence and continuation of a tax
event, the proceeds from that repayment shall simultaneously be applied on
a proportionate basis to redeem trust preferred securities having an
aggregate stated liquidation amount equal to the aggregate principal amount
of the debentures so redeemed at a redemption price, per trust preferred
security, equal to the redemption amount plus accrued and unpaid interest
to the date of that redemption. Those proceeds will be payable in cash to
the holders of the trust preferred securities. If a tax event redemption
occurs prior to February 16, 2001, the redemption price payable to the
collateral agent, in liquidation of the Income PRIDES holders' interests in
the trust, will be simultaneously applied by the collateral agent to
purchase the treasury portfolio on behalf of the holders' of the Income
PRIDES. The treasury portfolio will be pledged with the collateral agent to
secure the obligation of Income PRIDES holders' to purchase common stock
under the related purchase contracts.
If a failed remarketing has occurred, holders of trust securities
and holders of debentures following the distribution of the debentures upon
a dissolution of the trust, after February 16, 2001, will have the right,
o in the case of trust securities, to require the trust to put
to us the related debentures, or
o in the case of the debentures, to put the debentures
directly to us on March 2, 2001, upon at least three
business days' prior notice, at a price per debenture equal
to $50, plus accrued and unpaid interest, including any
deferred interest.
Upon our repurchase of those debentures from the trust
o the proceeds from the repurchase shall simultaneously be
applied, in the case of the trust securities, to redeem the
trust securities of the holder in an aggregate stated
liquidation amount equal to the aggregate principal amount
of the debentures so repurchased and
o any accrued and unpaid distributions, including any deferred
distributions, with respect to those trust securities will
be paid to such holder in cash.
REDEMPTION PROCEDURES
If the trust gives a notice of redemption, which will be
irrevocable, in respect of all of the trust preferred securities, then, by
12:00 noon, New York City time, on the redemption date, the trust will
irrevocably deposit with the depositary, the purchase contract agent or the
collateral agent, as applicable, funds sufficient to pay the redemption
price, but only if we have paid to the institutional trustee sufficient
amount of cash in connection with the related redemption or maturity of the
debentures. The trust will give the depositary, the purchase contract agent
or the collateral agent irrevocable instructions and authority to pay the
redemption price to the holders of the trust preferred securities called
for redemption.
If notice of redemption has been given and funds deposited as
required, then, immediately prior to the close of business on the date of
the deposit, distributions will cease to accrue and all rights of holders
of those trust preferred securities called for redemption will cease,
except for the right of the holders of those trust preferred securities to
receive the redemption price without interest on the redemption price.
If any date fixed for redemption of trust preferred securities is
not a business day, then payment of the redemption price payable on that
date will be made on the next succeeding day that is a business day,
without any interest or other payment in respect of any delay, except that
if the business day falls in the next calendar year, the payment will be
made on the immediately preceding business day.
DISTRIBUTION OF THE DEBENTURES
"Investment company event" means that the regular trustees have
received an opinion from independent counsel experienced in practice under
the 1940 Act that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or
regulatory authority, which change in 1940 Act law becomes effective on or
after the date of this prospectus, there is more than an insubstantial risk
that the trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act of 1940 (the
"1940 Act").
If, at any time, an investment company event shall occur and be
continuing, the trust shall be dissolved. As a result, debentures with an
aggregate principal amount equal to the aggregate stated liquidation amount
of, with an interest rate identical to the distribution rate of, and
accrued and unpaid interest equal to accrued and unpaid distributions on,
the trust securities would be distributed to the holders of the trust
securities in liquidation of the holders' interests in the trust on a
proportionate basis within 90 days following the occurrence of the
investment company event. However, the dissolution and distribution shall
be conditioned on us being unable to avoid the investment company event
within a 90-day period either by taking some ministerial action or by
pursuing some other similar reasonable measure that will have no adverse
effect on the trust, us or the holders of the trust securities and will
involve no material cost. If an investment company event occurs, debentures
distributed to the collateral agent in liquidation of holders' interests in
the trust would be pledged, in place of the trust preferred securities, to
secure Income PRIDES holders' obligations to purchase common stock under
the purchase contracts.
We will have the right at any time to dissolve the trust and, after
satisfaction of liabilities of creditors of the trust as provided by
applicable law, to cause the debentures to be distributed to the holders of
the trust securities. As of the date of any distribution of debentures upon
dissolution of the trust,
o the trust preferred securities will no longer be deemed to be
outstanding,
o the depositary or its nominee, as the record holder of the
trust preferred securities, will receive a registered global
certificate or certificates representing the debentures to
be delivered upon the distribution, and
o any certificates representing trust preferred securities not
held by the depositary or its nominee will be deemed to
represent debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and
accrued and unpaid interest equal to accrued and unpaid
distributions on, those trust preferred securities until the
certificates are presented to us or our agent for transfer
or reissuance.
Debentures distributed to the collateral agent in liquidation of
the interest of the holders of the trust preferred securities in the trust
would be substituted for the trust preferred securities and pledged to
secure Income PRIDES holders' obligations to purchase our common stock
under the purchase contracts.
We cannot predict the market prices for either the trust preferred
securities or the debentures that may be distributed in exchange for the
trust preferred securities if a dissolution of the trust were to occur.
Accordingly, the trust preferred securities or the debentures that an
investor may receive if a dissolution of the trust were to occur may trade
at a discount to the price that the investor paid to purchase the trust
preferred securities forming a part of the Income PRIDES offered here.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In case of a voluntary or involuntary dissolution of the trust,
unless a tax event redemption has occurred, the then holders of the trust
preferred securities will be entitled to receive out of the assets of the
trust, after satisfaction of liabilities to creditors, debentures in an
aggregate principal amount equal to the aggregate stated liquidation amount
of, with an interest rate identical to the distribution rate of, and
accrued and unpaid interest equal to accrued and unpaid distributions on,
the trust preferred securities on a proportionate basis in exchange for
those trust preferred securities.
The holders of the common securities will be entitled to receive
distributions upon any such dissolution proportionately with the holders of
the trust preferred securities. However, if a declaration event of default
has occurred and is continuing, the trust preferred securities shall have a
preference over the common securities with regard to those distributions.
Under the declaration, the trust shall dissolve
(1) upon the expiration of the term of the trust,
(2) upon our bankruptcy or the bankruptcy of the holder of the
common securities,
(3) upon our filing of a certificate of dissolution or its
equivalent or the revocation of our charter and the
expiration of 90 days after the date of revocation without
its reinstatement,
(4) after the receipt by the institutional trustee of written
direction from us to dissolve the trust or the filing of a
certificate of dissolution or its equivalent with respect to
the trust,
(5) upon the distribution of debentures,
(6) upon the occurrence and continuation of a tax event redemption
or
(7) upon the entry of a decree of a judicial dissolution of the
holder of the common securities, us or the trust.
DECLARATION EVENTS OF DEFAULT
An event of default under the indenture constitutes an event of
default under the declaration with respect to the trust securities.
However, under the declaration, the holder of the common securities will be
deemed to have waived any declaration event of default with respect to the
common securities until all declaration events of default with respect to
the trust preferred securities have been cured, waived or otherwise
eliminated. Until any declaration events of default with respect to the
trust preferred securities have been so cured, waived or otherwise
eliminated, the institutional trustee will be deemed to be acting solely on
behalf of the holders of the trust preferred securities. Only the holders
of the trust preferred securities will have the right to direct the
institutional trustee with respect to particular matters under the
declaration and, therefore, the indenture. If a declaration event of
default with respect to the trust preferred securities is waived by holders
of trust preferred securities, the waiver will also constitute the waiver
of the declaration event of default with respect to the common securities
without any further act, vote or consent of the holders of the common
securities.
If the institutional trustee fails to enforce its rights under the
debentures in respect of an indenture event of default after a holder of
record of trust preferred securities has made a written request, that
holder of record of trust preferred securities may, to the fullest extent
permitted by applicable law, institute a legal proceeding against us to
enforce the institutional trustee's rights under the debentures without
first proceeding against the institutional trustee or any other person or
entity. Notwithstanding the above, if a declaration event of default has
occurred and is continuing and that event is attributable to our failure to
pay interest or principal on the debentures on the date that interest or
principal is otherwise payable, after giving effect to any right of
deferral, then you, as a holder of trust preferred securities, may directly
institute a proceeding after the respective due date specified in the
debentures for enforcement of payment (a "direct action") to you directly
of the principal of or interest on the debentures having a principal amount
equal to the aggregate liquidation amount of your trust preferred
securities. In connection with the direct action, we shall have the right
under the indenture to set off any payment made to you. The holders of
trust preferred securities will not be able to exercise directly any other
remedy available to the holders of the debentures.
Upon the occurrence of a declaration event of default, the
institutional trustee, as the sole holder of the debentures, will have the
right under the indenture to declare the principal of and interest on the
debentures to be immediately due and payable. We and the trust are each
required to file annually with the institutional trustee an officer's
certificate as to our compliance with all conditions and covenants under
the declaration.
VOTING RIGHTS
Except as described here, under the Trust Act and the Trust
Indenture Act and under "Description of the Guarantee -- Modification of
the Guarantee; Assignment," and as otherwise required by law and the
declaration, the holders of the trust preferred securities will have no
voting rights.
Subject to the requirement of the institutional trustee obtaining a
tax opinion in specific circumstances provided below, the holders of a
majority in aggregate stated liquidation amount of the trust preferred
securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the institutional
trustee, or direct the exercise of any trust or power conferred upon the
institutional trustee under the declaration, including the right to direct
the institutional trustee, as holder of the debentures, to
(1) exercise the remedies available under the indenture with
respect to the debentures,
(2) waive any past indenture event of default that is waivable
under the indenture,
(3) exercise any right to rescind or annul a declaration that
the principal of all the debentures shall be due and payable
or
(4) consent to any amendment, modification or termination of the
indenture or the debentures where that consent shall be
required. However, where a consent or action under the
indenture would require the consent or act of holders of
more than a majority in principal amount of the affected
debentures (a "super-majority"), only the holders of at
least the super-majority in aggregate stated liquidation
amount of the trust preferred securities may direct the
institutional trustee to give the consent or take the
action.
The institutional trustee shall notify all holders of the trust
preferred securities of any notice of default received from the debt
trustee with respect to the debentures. The notice shall state that the
indenture event of default also constitutes a declaration event of default.
Except with respect to directing the time, method and place of conducting a
proceeding for a remedy, the institutional trustee shall not take any of
the actions described in clauses (1), (2) or (3) above unless the
institutional trustee has obtained an opinion of tax counsel experienced in
those matters that, as a result of the action, the trust will not fail to
be classified as a grantor trust for United States federal income tax
purposes.
If the consent of the institutional trustee, as the holder of the
debentures, is required under the indenture with respect to any amendment,
modification or termination of the indenture or the debentures, the
institutional trustee shall request the direction of the holders of the
trust preferred securities and the common securities with respect to that
amendment, modification or termination. The indenture trustee shall vote
with respect to that amendment, modification or termination as directed by
a majority in stated liquidation amount of the trust preferred securities
and the common securities voting together as a single class. However, where
a consent under the indenture would require the consent of a
super-majority, the institutional trustee may only give that consent at the
direction of the holders of at least the proportion in stated liquidation
amount of the trust preferred securities and the common securities which
the relevant super-majority represents of the aggregate principal amount of
the debentures outstanding. The institutional trustee shall not take any
action in accordance with the directions of the holders of the trust
preferred securities and the common securities unless the institutional
trustee has obtained an opinion of tax counsel experienced in those matters
that, as a result of the action, the trust will not fail to be classified
as a grantor trust for United States federal income tax purposes.
A waiver of an indenture event of default will constitute a waiver
of the corresponding declaration event of default.
Any required approval or direction of holders of trust preferred
securities may be given at a separate meeting of holders of trust preferred
securities convened for that purpose, at a meeting of all of the holders of
trust securities or according to written consent. The regular trustees will
cause a notice of any meeting at which holders of trust preferred
securities are entitled to vote, or of any matter upon which action by
written consent of those holders is to be taken, to be mailed to each
holder of record of trust preferred securities. Each notice will include a
statement specifying the following information:
o the date of the meeting or the date by which the action is
to be taken;
o a description of any resolution proposed for adoption at the
meeting on which the holders are entitled to vote or of the
matter upon which written consent is sought; and
o instructions for the delivery of proxies or consents.
No vote or consent of the holders of trust preferred securities
will be required for the trust to cancel trust preferred securities or
distribute debentures in accordance with the declaration.
Notwithstanding that holders of trust preferred securities are
entitled to vote or consent under any of the circumstances described above,
any trust preferred securities that are owned at that time by us or any
entity directly or indirectly controlling or controlled by, or under direct
or indirect common control with, us, shall not be entitled to vote or
consent and shall, for purposes of such vote or consent, be treated as if
those trust preferred securities were not outstanding.
The procedures by which holders of trust preferred securities may
exercise their voting rights are described below.
Holders of the trust preferred securities will have no rights to
appoint or remove the trustees, who may be appointed, removed or replaced
solely by us as the indirect or direct holder of all of the common
securities.
MODIFICATION OF THE DECLARATION
The declaration may be modified and amended if approved by the
regular trustees and, in some circumstances, the institutional trustee or
the Delaware trustee. However, if any proposed amendment provides for, or
the regular trustees otherwise propose to effect,
(1) any action that would adversely affect the powers,
preferences or special rights of the trust securities,
whether by way of amendment to the declaration or otherwise
or
(2) the dissolution of the trust other than according to the
terms of the declaration,
then the holders of the trust securities voting together as a single class
will be entitled to vote on that amendment or proposal, and that amendment
or proposal shall not be effective except with the approval of at least a
majority in such stated liquidation amount of the affected trust
securities. If any amendment or proposal referred to in clause (1) above
would adversely affect only the trust preferred securities or the common
securities, then only the affected class will be entitled to vote on that
amendment or proposal and that amendment or proposal shall not be effective
except with the approval of a majority in stated liquidation amount of that
class of securities. In addition, the declaration may be amended without
the consent of the holders of the trust securities to, among other things,
cause the trust to continue to be classified as a grantor trust for United
States federal income tax purposes.
Notwithstanding the above, no amendment or modification may be made
to the declaration if that amendment or modification would
(1) cause the trust to be classified as other than a grantor
trust for United States federal income tax purposes,
(2) reduce or otherwise adversely affect the powers of the
institutional trustee or
(3) cause the trust to be deemed an "investment company" which
is required to be registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below or as described in "Liquidation Distribution Upon
Dissolution".
The trust may, with the consent of the regular trustees and without
the consent of the holders of the trust securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as
under the laws of any state except that
(1) if the trust is not the surviving entity, the successor
entity either (x) expressly assumes all of the obligations
of the trust under the trust securities or (y) substitutes
for the trust securities other securities having
substantially the same terms as the trust securities (the
"successor securities"). The successor securities must rank
the same as the trust securities with respect to
distributions and payments upon liquidation, redemption and
otherwise,
(2) we expressly acknowledge a trustee of the successor entity
possessing the same powers and duties as the institutional
trustee as the holder of the debentures,
(3) if the trust preferred securities are listed, any successor
securities will be listed upon notification of issuance, on
any national securities exchange or with another
organization on which the trust preferred securities are
then listed or quoted,
(4) the merger, consolidation, amalgamation or replacement does
not cause the trust preferred securities, including any
successor securities, to be downgraded by any nationally
recognized statistical rating organization,
(5) the merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges
of the holders of the trust securities, including any
successor securities, in any material respect other than
with respect to any dilution of the holders' interest in the
new entity,
(6) the successor entity has a purpose substantially identical
to that of the trust,
(7) prior to the merger, consolidation, amalgamation or
replacement, we have received an opinion of a nationally
recognized independent counsel to the trust experienced in
those matters that,
o the merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the holders of the
trust securities, including any successor securities,
in any material respect other than with respect to
any dilution of the holders' interest in the new
entity,
o following the merger, consolidation, amalgamation or
replacement, neither the trust nor the successor
entity will be required to register as an investment
company under the 1940 Act and
o following the merger, consolidation, amalgamation or
replacement, the trust or the successor entity will
continue to be classified as a grantor trust for
United States federal income tax purposes, and
(8) we guarantee the obligations of the successor entity under
the successor securities at least to the extent provided by
the guarantee and the common securities guarantee.
Notwithstanding the above, the trust shall not, except with the
consent of holders of 100% in stated liquidation amount of the trust
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 that consolidation, amalgamation,
merger or replacement would cause the trust or the successor entity to be
classified as other than a grantor trust for United States federal income
tax purposes.
MERGER OF TRUSTS
Upon the issuance, if any, of the additional Income PRIDES, Cendant
Capital I shall merge with and into Cendant Capital II. Thereafter, each
current Income PRIDES, additional Income PRIDES and new Income PRIDES will
consist of a purchase contract and a trust preferred security of Cendant
Capital II. In addition, upon each issuance of special Income PRIDES, the
trust issuing the trust preferred securities prior to such issuance shall
be merged with and into one of the trusts which prior to such time shall
not have issued any securities (a "newly issuing trust"), and the trust
preferred securities forming a part of the current Income PRIDES,
additional Income PRIDES and new Income PRIDES will be issued by such newly
issuing trust. The terms of the trust preferred securities issued by each
of the trusts will have terms substantially identical to each other. The
aggregate liquidation amount of trust preferred securities issued by any
trust will equal the sum of the aggregate liquidation amount of trust
preferred securities issued by the trust being merged with and into such
trust plus the aggregate liquidation amount of trust preferred securities
being simultaneously issued by such trusts. The aggregate principal amount
of debentures held by any trust will equal the sum of the aggregate
principal amount of debentures held by the trust being merged with and into
such trust plus the aggregate principal amount of debentures being
simultaneously issued by Cendant to such trust in connection with the
issuance of additional Income PRIDES or special Income PRIDES.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
If the trust preferred securities are issued as one or more
fully-registered global trust preferred securities certificates
representing the total aggregate number of trust preferred securities, the
depositary will act as securities depositary for any trust preferred
securities that are held separately from the Income PRIDES. In that case,
the trust preferred securities will be issued only as fully-registered
securities registered in the name of Cede & Co., the depositary's nominee.
However, under some circumstances, the regular trustees with our consent
may decide not to use the system of book-entry transfers through the DTC
with respect to the trust preferred securities. In that case, certificates
of the trust preferred securities will be printed and delivered to the
holders.
The laws of some jurisdictions require that some purchasers of
securities take physical delivery of securities in definitive form. These
laws may impair the ability to transfer beneficial interests in the global
trust preferred securities as represented by a global certificate.
Purchases of trust preferred securities within the depositary's
system must be made by or through direct participants, which will receive a
credit for the trust preferred securities on the depositary's records. The
beneficial ownership interest of each actual purchaser of each trust
preferred security is in turn to be recorded on the direct and indirect
participants' records. Beneficial owners will not receive written
confirmation from the depositary of their purchases, but beneficial owners
are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the
direct or indirect participants through which the beneficial owners
purchased trust preferred securities. Transfers of ownership interests in
the trust preferred securities are to be accomplished by entries made on
the books of participants acting on behalf of beneficial owners. Beneficial
owners will not receive certificates representing their ownership interests
in the trust preferred securities, except if use of the book-entry system
for the trust preferred securities is discontinued.
To facilitate subsequent transfers, all the trust preferred
securities deposited by participants with the depositary will be registered
in the name of the depositary's nominee, Cede & Co. The deposit of trust
preferred securities with the depositary and their registration in the name
of Cede & Co. cause no change in beneficial ownership. The depositary has
no knowledge of the actual beneficial owners of the trust preferred
securities. The depositary's records reflect only the identity of the
direct participants to whose accounts those trust preferred securities are
credited, which may or may not be the beneficial owners. The participants
will remain responsible for keeping account of their holdings on behalf of
their customers.
So long as the depositary or its nominee is the registered owner or
holder of a global certificate, the depositary or the nominee will be
considered the sole owner or holder of the trust preferred securities
represented for all purposes under the declaration and the trust preferred
securities. No beneficial owner of an interest in a global certificate will
be able to transfer that interest except in accordance with the depositary
applicable procedures, in addition to those provided for under the
declaration.
The depositary has advised us that it will take any action
permitted to be taken by a holder of trust preferred securities, including
the presentation of trust preferred securities for exchange, only at the
direction of one or more participants to whose account the depositary's
interests in the global certificates are credited and only in respect of
the portion of the stated liquidation amount of trust preferred securities
as to which such participant or participants has or have given such
directions. However, if there is a declaration event of default under the
trust preferred securities, the depositary will exchange the global
certificates for certificated securities, which it will distribute to its
participants.
Conveyance of notices and other communications by the depositary to
direct participants and indirect participants and by direct participants
and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements that may be in force from time to time.
Although voting with respect to the trust preferred securities is
limited, in those cases where a vote is required, neither the depositary
nor Cede & Co. will itself consent or vote with respect to trust preferred
securities. Under its usual procedures, the depositary would mail an
omnibus proxy to the trust as soon as possible after the record date. The
omnibus proxy assigns Cede & Co.'s consenting or voting rights to those
direct participants to whose accounts the trust preferred securities are
credited on the record date. The direct participants are identified in a
listing attached to the omnibus proxy. We and the trust believe that the
arrangements among the depositary, direct and indirect participants, and
beneficial owners will enable the beneficial owners to exercise rights
equivalent in substance to the rights that can be directly exercised by a
record holder of a beneficial interest in the trust.
Distribution payments on the trust preferred securities issued in
the form of one or more global certificates will be made to the depositary
in immediately available funds. The depositary's practice is to credit
direct participants' accounts on the relevant payment date in accordance
with their respective holdings shown on the depositary's records unless the
depositary has reason to believe that it will not receive payments on that
payment date. Payments by participants to beneficial owners will be
governed by standing instructions and customary practices, as is the case
with securities held for the account of customers in bearer form or
registered in "street name." Those payments will be the responsibility of
the participant and not of the depositary, the trust or us, subject to any
statutory or regulatory requirements to the contrary that may be in force
from time to time. Payment of distributions to the depositary is the
responsibility of the trust, disbursement of such payments to direct
participants is the responsibility of the depositary, and disbursement of
those payments to the beneficial owners is the responsibility of direct and
indirect participants.
Except as provided here, a beneficial owner in a global trust
preferred security certificate will not be entitled to receive physical
delivery of trust preferred securities. Accordingly, each beneficial owner
must rely on the procedures of the depositary to exercise any rights under
the trust preferred securities.
Although the depositary has agreed to the above procedure to
facilitate transfer of interests in the global certificates among
participants, the depositary is under no obligation to perform or continue
to perform these procedures and these procedures may be discontinued at any
time. Neither us, nor the trust or any trustee will have any responsibility
for the performance by the depositary or its participants or indirect
participants under the rules and procedures governing the depositary. The
depositary may discontinue providing its services as securities depositary
with respect to the trust preferred securities at any time by giving
reasonable notice to the trust. Under these circumstances, if a successor
securities depositary is not obtained, trust preferred securities
certificates are required to be printed and delivered to holders.
Additionally, the regular trustees, with our consent, may decide to
discontinue use of the system of book-entry transfers through the
depositary or any successor depositary, with respect to the trust preferred
securities. In that case, certificates for the trust preferred securities
will be printed and delivered to holders. In each of the above
circumstances, we will appoint a paying agent with respect to the trust
preferred securities.
The information in this section concerning the depositary and the
depositary's book-entry system has been obtained from sources that we and
the trust believe to be reliable, but neither we nor the trust take
responsibility for its accuracy.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
Payments in respect of the trust preferred securities represented
by the global certificates shall be made to the depositary. The depositary
shall credit the relevant accounts at the depositary on the applicable
distribution dates. In the case of certificated securities, those payments
shall be made by check mailed to the address of the holder entitled to it
as that address appears on the register. The paying agent shall be
permitted to resign as paying agent upon 30 days' written notice to the
trustees. If First National Bank of Chicago shall no longer be the paying
agent, the regular trustees shall appoint a successor to act as paying
agent, which shall be a bank or trust company.
Bank One Trust Company, N.A. will act as registrar, transfer agent
and paying agent for the trust preferred securities.
Registration of transfers of trust preferred securities will be
made without charge by or on behalf of the trust. However, payment shall be
made and any indemnity as the trust or we may require shall be given in
respect of any tax or other government charge which may be imposed in
relation to it.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The institutional trustee, prior to the occurrence of a default
with respect to the trust securities and after the curing of any defaults
that may have occurred, undertakes to perform only those duties that are
specified in the declaration. The institutional trustee, after default,
shall exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to those
provisions, the institutional trustee is under no obligation to exercise
any of the powers vested in it by the declaration at the request of any
holder of trust preferred securities, unless offered reasonable indemnity
by that holder against the costs, expenses and liabilities which it might
incur. The holders of trust preferred securities will not be required to
offer an indemnity in the case that those holders, by exercising their
voting rights, direct the institutional trustee to take any action it is
empowered to take under the declaration following a declaration event of
default. The institutional trustee also serves as trustee under the
guarantee.
The institutional trustee maintains commercial banking
relationships with us.
GOVERNING LAW
The declaration and the trust preferred securities will be governed
by, and construed in accordance with, the internal laws of the State of
Delaware.
MISCELLANEOUS
The regular trustees are authorized and directed to operate the
trust in a way that the trust will not be required to register as an
"investment company" under the 1940 Act or be characterized as other than a
grantor trust for United States federal income tax purposes. We are
authorized and directed to conduct our affairs so that the debentures will
be treated as our indebtedness for United States federal income tax
purposes. In this connection, we and the regular trustees are authorized to
take any action not inconsistent with applicable law, the declaration of
trust, the certificate of trust of the trust or our certificate of
incorporation, that we and the regular trustees determine in our discretion
to be necessary or desirable to achieve that end, as long as that action
does not adversely affect the interests of the holders of the trust
preferred securities or vary its terms.
Holders of the trust preferred securities have no preemptive or
similar rights.
DESCRIPTION OF THE GUARANTEE
Provided below is a summary of information concerning the guarantee
which will be executed and delivered by us for the benefit of the holders
from time to time of trust preferred securities. References to the term
"Guarantee" shall mean the guarantee of the trust preferred securities
issued by one of Cendant Capital I, Cendant Capital II, Cendant Capital
III, Cendant Capital IV or Cendant Capital V, as the context requires. The
guarantee will be qualified as an indenture under the Trust Indenture Act.
The Wilmington Trust Company will act as the guarantee trustee for the
purposes of compliance with the provisions of the Trust Indenture Act. The
terms of the guarantee will be those provided in the guarantee and those
made part of the guarantee by the Trust Indenture Act. The following
summary is not necessarily complete, and reference is made to the copy of
the form of guarantee including the definitions which is filed as an
exhibit to the registration statement relating to this prospectus, and to
the Trust Indenture Act. Whenever particular defined terms of the guarantee
are referred to in this prospectus, these defined terms are incorporated by
reference in this prospectus. The guarantee will be held by the guarantee
trustee for the benefit of the holders of the trust preferred securities.
OVERVIEW
Under the guarantee, we will irrevocably and unconditionally agree,
to the extent provided there, to pay in full on a senior unsecured basis,
to the holders of the trust preferred securities issued by the trust, the
guarantee payments. We shall pay the guarantee payments as and when due,
regardless of any defense, right of set-off or counterclaim which the trust
may have or assert. We shall make these payments except to the extent paid
by the trust. The following payments or distributions with respect to trust
preferred securities issued by the trust to the extent not paid by or on
behalf of the trust, will be subject to the guarantee, without duplication:
(a) any accrued and unpaid distributions which are required to
be paid on the trust preferred securities, to the extent the
trust shall have funds available;
(b) the redemption price, including all accumulated and unpaid
distributions to the date of redemption, of trust preferred
securities in respect of which the related debentures have
been redeemed by us upon the occurrence of a tax event
redemption, to the extent the trust shall have funds
available; and
(c) upon a voluntary or involuntary dissolution of the trust,
other than in connection with the distribution of debentures
to the holders of trust preferred securities, the lesser of
o the aggregate of the stated liquidation amount and
all accrued and unpaid distributions on the trust
preferred securities to the date of payment, to the
extent the trust has funds available, and
o the amount of assets of the trust remaining available
for distribution to holders of the trust preferred
securities in liquidation of the trust.
Our obligation to make a guarantee payment may be satisfied by
direct payment of the required amounts by us to the holders of trust
preferred securities or by causing the trust to pay those amounts to the
holders.
The guarantee will be a full and unconditional guarantee on a
senior unsecured basis with respect to the trust preferred securities
issued by the trust, but will not apply to any payment of distributions
except to the extent the trust shall have funds available. If we do not
make interest payments on the debentures purchased by the trust, the trust
will not pay distributions on the trust preferred securities and will not
have funds available.
The guarantee, when taken together with our obligations under the
debentures, the indenture, and the declaration, will have the effect of
providing a full and unconditional guarantee on a senior unsecured basis by
us of payments due on the trust preferred securities.
We have also agreed separately to irrevocably and unconditionally
guarantee the obligations of the trust with respect to the common
securities to the same extent as the guarantee. However, in the case of an
indenture event of default, holders of trust preferred securities shall
have priority over holders of common securities with respect to
distributions and payments on liquidation, redemption or otherwise.
CENDANT'S GUARANTEE COVENANTS
In the guarantee, we will covenant that, so long as any trust
preferred securities issued by the trust remain outstanding, if there shall
have occurred any event that would constitute an event of default under the
guarantee or the declaration, then
(a) we shall not declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of our capital
stock, other than
o purchases or acquisitions of our capital stock in
connection with the satisfaction of our obligations
under any employee or agent benefit plans or under
any contract or security outstanding on the date of
that event requiring us to purchase our capital
stock,
o as a result of a reclassification of our capital
stock or the exchange or conversion of one class or
series of our capital stock for another class or
series of our capital stock,
o the purchase of fractional interests in shares of our
capital stock pursuant to the conversion or exchange
provisions of our capital stock or the security being
converted or exchanged,
o dividends or distributions in our capital stock (or
rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance
or exchange of capital stock or
o redemptions or repurchases of any rights outstanding
under a shareholder rights plan;
(b) We shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt
securities issued by us that rank junior to those
debentures; and
(c) We shall not make any guarantee payments with respect to the
above other than according to the guarantee or the common
securities guarantee.
MODIFICATION OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes which do not adversely affect
the rights of holders of trust preferred securities, in which case no vote
will be required, the guarantee may be amended only with the prior approval
of the holders of not less than a majority in stated liquidation amount of
the outstanding trust preferred securities issued by the trust. All
guarantees and agreements contained in the guarantee shall bind the
successors, assigns, receivers, trustees and our representatives and shall
inure to the benefit of the holders of the trust preferred securities then
outstanding.
TERMINATION
The guarantee will terminate
(a) upon distribution of the debentures held by the trust to the
holders of the trust preferred securities,
(b) upon full payment of the redemption price of all the trust
preferred securities in the case that we repurchase all of
the debentures upon the occurrence of a tax event redemption
or
(c) upon full payment of the amounts payable in accordance with
the declaration upon liquidation of the trust.
The guarantee will continue to be effective, or will be
reinstated, if at any time any holder of trust preferred securities must
return payment of any sums paid under the trust preferred securities or the
guarantee.
EVENTS OF DEFAULT
An event of default under the guarantee will occur upon our failure
to perform any of our payment or other obligations under the guarantee.
The holders of a majority in stated liquidation amount of the trust
preferred securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the guarantee trustee
in respect of the guarantee or to direct the exercise of any trust or power
conferred upon the guarantee trustee under the guarantee. If the guarantee
trustee fails to enforce the guarantee, any holder of trust preferred
securities may institute a legal proceeding directly against us to enforce
the holder's rights under the guarantee, without first instituting a legal
proceeding against the trust, the guarantee trustee or any other person or
entity. We waive any right or remedy to require that any action be brought
first against the trust or any other person or entity before proceeding
directly against us.
STATUS OF THE GUARANTEE
The guarantee will constitute our unsecured obligation and will
rank on a parity with all our other senior unsecured obligations.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee, prior to the occurrence of a default with
respect to the guarantee, undertakes to perform only those duties that are
specified in the guarantee. The guarantee trustee, after default, shall
exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. According to these provisions, the
guarantee trustee is under no obligation to exercise any of the powers
vested in it by the guarantee at the request of any holder of trust
preferred securities, unless offered reasonable indemnity against the
costs, expenses and liabilities which it might incur. However, this shall
not relieve the guarantee trustee, upon the occurrence of an event of
default under the guarantee, from exercising the rights and powers vested
in it by the guarantee.
GOVERNING LAW
The guarantee will be governed by and construed in accordance with
the internal laws of the State of New York.
DESCRIPTION OF THE DEBENTURES
Provided below is a description of the specific terms of the
debentures in which the trust will invest the proceeds from the issuance
and sale of the trust securities. The following description is not
necessarily complete, and reference is made to the copy of the form of the
indenture to be entered into between us and The Bank of Nova Scotia Trust
Company of New York , as debt trustee, which is filed as an exhibit to the
registration statement relating to this prospectus, and to the Trust
Indenture Act. Certain capitalized terms used here are defined in the
indenture.
Under specific circumstances involving the dissolution of the
trust, debentures may be distributed to the holders of the trust securities
in liquidation of the trust.
OVERVIEW
The debentures will be issued as senior unsecured debt under the
indenture and will rank on a parity in right of payment with all our other
senior unsecured debt obligations.
The debentures will not be subject to a sinking fund provision.
Unless a tax event redemption has occurred prior to February 16, 2001, the
entire principal amount of the debentures will mature and become due and
payable, together with any accrued and unpaid interest thereon including
compound interest and expenses and taxes of the trust, if any, on February
16, 2003.
We will have the right at any time to dissolve the trust and cause
the debentures to be distributed to the holders of the trust securities. If
debentures are distributed to holders of trust securities in liquidation of
the holders' interests in the trust, those debentures will initially be
issued as a global security.
As described in this prospectus, under specific limited
circumstances, debentures may be issued in certificated form in exchange
for a global security. In the case that debentures are issued in
certificated form, these debentures will be in denominations of $50 and
integral multiples of $50 and may be transferred or exchanged at the
offices described below. Payments on debentures issued as a global security
will be made to the depositary, a successor depositary or, in the case that
no depositary is used, to a paying agent for the debentures. In the case
that debentures are issued in certificated form, principal and interest
will be payable, the transfer of the debentures will be registrable and
debentures will be exchangeable for debentures of other denominations of a
like aggregate principal amount, at the corporate trust office or agency of
the institutional trustee in Wilmington, Delaware. However, at our option,
payment of interest may be made by check mailed to the address of the
entitled holder or by wire transfer to an account appropriately designated
by the entitled holder. Notwithstanding the above, so long as the holder of
any debentures is the institutional trustee, the payment of principal and
interest on the debentures held by the institutional trustee will be made
at the place and to the account as may be designated by the institutional
trustee.
The indenture does not contain provisions that afford holders of
the debentures protection in case we are involved in a highly leveraged
transaction or other similar transaction that may adversely affect those
holders.
INTEREST
Each debenture shall initially bear interest at the rate of 6.45%
per year from the original date of issuance, payable quarterly in arrears
on February 16, May 16, August 16 and November 16 of each year, commencing
. Each debenture shall bear interest to the person in whose name that
debenture is registered, subject to certain exceptions, at the close of
business on the business day next preceding that interest payment date.
The applicable interest rate on the debentures and the
distribution rate on the related trust preferred securities outstanding on
and after February 16, 2001 will be reset on the third business day
immediately preceding February 16, 2001 to the reset rate. The reset rate
will be equal to the sum of the reset spread and the rate on the two-year
benchmark treasury in effect on the third business day immediately
preceding February 16, 2001. The reset rate will be determined by the reset
agent as the rate the trust preferred securities should bear in order for a
trust preferred security to have an approximate market value on the third
business day immediately preceding February 16, 2001 of 100.5% of $50.
However, we may limit the reset rate to be no higher than the rate on the
two-year benchmark treasury on the third business day immediately preceding
February 16, 2001 plus 200 basis points (2%). The market value of the trust
preferred securities may be less than 100.5% if the reset spread is limited
to a maximum of 2%.
On the reset announcement date, the two-year benchmark treasury
will be selected and the reset agent will establish the reset spread to be
added to the rate on the two-year benchmark treasury in effect on the third
business day immediately preceding February 16, 2001. On that date, we will
announce the reset spread and the two-year benchmark treasury. We will
cause a notice of the reset spread and the two-year benchmark treasury to
be published on the business day following the reset announcement date by
publication in a daily newspaper in the English language of general
circulation in The City of New York, which is expected to be The Wall
Street Journal. If debentures shall not continue to remain in book-entry
only form, we shall have the right to select record dates, which shall be
more than fifteen business days but less than 60 business days prior to the
interest payment date.
The amount of interest payable for any period will be computed on
the basis of a 360-day year consisting of twelve 30-day months. The amount
of interest payable for any period shorter than a full quarterly period for
which interest is computed will be computed on the basis of the actual
number of days elapsed in that 90-day period. In the case that any date on
which interest is payable on the debentures is not a business day, then
payment of the interest payable on that date will be made on the next
succeeding day that is a business day. However, no interest or other
payment shall be paid in respect of the delay but if that business day is
in the next succeeding calendar year, then that payment shall be made on
the immediately preceding business day, in each case with the same force
and effect as if made on that date.
TAX EVENT REDEMPTION
If a tax event shall occur and be continuing, we may, at our
option, redeem debentures in whole but not in part at any time prior to
February 16, 2001. The redemption price shall equal, for each debenture,
the redemption amount plus accrued and unpaid interest, including compound
interest and expenses and taxes of the trust, if any, to the date of
redemption. If, following the occurrence of a tax event, we exercise our
option to redeem the debentures, then the proceeds of that redemption will
be applied to redeem trust securities having a liquidation amount equal to
the principal amount of debentures to be paid, in accordance with their
terms, at the redemption price. The redemption price will be payable in
cash to the holders of the trust securities. If a tax event redemption
occurs prior to February 16, 2001, the redemption price payable in
liquidation of the Income PRIDES holders' interest in the trust will be
distributed to the collateral agent. The collateral agent will apply an
amount equal to the redemption amount of the redemption price to purchase
the treasury portfolio on behalf of the holders of Income PRIDES and remit
any remaining portion of the redemption price to the purchase contract
agent for payment to the holders of those Income PRIDES. The treasury
portfolio will be substituted for the trust preferred securities and will
be pledged with the collateral agent to secure the Income PRIDES holders'
obligation to purchase our common stock under the purchase contracts.
However, if the tax event redemption occurs after February 16, 2001, the
treasury portfolio will not be purchased.
Tax event means the receipt by the trust of an opinion of a
nationally recognized independent tax counsel experienced in such matters
that, as a result of
(a) any amendment to, or change, including any announced
prospective change in, the laws or any regulations of the
United States or any political subdivision or taxing
authority or which affects taxation,
(b) any amendment to or change in an interpretation or
application of these laws or regulations by any legislative
body, court, governmental agency or regulatory authority or
(c) any interpretation or pronouncement that provides for a
position with respect to these laws or regulations that
differs from the generally accepted position on the date the
trust securities are issued,
which amendment or change is effective or which interpretation or
pronouncement is announced on or after the date of issuance of the trust
securities under the declaration, there is more than an insubstantial risk
that
(a) interest payable by us on the debentures would not be
deductible, in whole or in part, by us for United States
federal income tax purposes or
(b) the income of the trust would be subject to more than a de
minimis amount of other taxes, duties or other governmental
charges.
Treasury portfolio means, with respect to the applicable principal
amount of debentures
(a) if the tax event redemption date occurs prior to February
16, 2001, a portfolio of zero-coupon U.S. treasury
securities consisting of
o interest or principal strips of U.S. treasury
securities which mature on or prior to February 15,
2001 in an aggregate amount equal to the applicable
principal amount and
o with respect to each scheduled interest payment date
on the debentures that occurs after the tax event
redemption date, interest or principal strips of U.S.
treasury securities which mature on or prior to that
date in an aggregate amount equal to the aggregate
interest payment that would be due on the applicable
principal amount of the debentures on that date, and
(a) if the tax event redemption date occurs after February 16,
2001, a portfolio of zero-coupon U.S. treasury securities
consisting of
o principal or interest strips of U.S. treasury
securities which mature on or prior to February 15,
2003 in an aggregate amount equal to the applicable
principal amount and
o with respect to each scheduled interest payment date
on the debentures that occurs after the tax event
redemption date, interest or principal strips of the
U.S. treasury securities which mature on or prior to
that date in an aggregate amount equal to the
aggregate interest payment that would be due on the
applicable principal amount of the debentures on that
date.
Applicable principal amount means either
o if the tax event redemption date occurs prior to February
16, 2001, the aggregate principal amount of the debentures
corresponding to the aggregate stated liquidation amount of
the trust preferred securities which are components of
Income PRIDES on that tax event redemption date or
o if the tax event redemption occurs on or after February 16,
2001, the aggregate principal amount of the debentures
corresponding to the aggregate stated liquidation amount of
the trust preferred securities outstanding on that tax event
redemption date.
Redemption amount means for each debenture, the product of
o the principal amount of that debenture and
o a fraction whose numerator is the treasury portfolio
purchase price and whose denominator is the applicable
principal amount.
Treasury portfolio purchase price means the lowest aggregate price
quoted by a primary U.S. government securities dealer in New York City to
the quotation agent on the third business day immediately preceding the tax
event redemption date for the purchase of the treasury portfolio for
settlement on the tax event redemption date.
Quotation agent means
o Merrill Lynch Government Securities, Inc. and its respective
successors. However, if they shall cease to be a primary
treasury dealer, we shall substitute another primary
treasury dealer, and
o any other primary treasury dealer selected by us.
Notice of any redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each registered holder of
debentures to be redeemed at its registered address. Unless we default in
payment of the redemption price, on and after the redemption date interest
shall cease to accrue on the redeemed debentures.
PUT OPTION
If a failed remarketing has occurred, holders of debentures,
including the institutional trustee and following the distribution of the
debentures upon a dissolution of the trust those debenture holders, will
have the right to put their debentures to us on March 2, 2001, upon at
least three business days' prior notice at a price per debenture equal to
$50, plus any accrued and unpaid interest. Upon our repurchase of those
debentures, the proceeds from the repurchase shall simultaneously be
applied to redeem, in the case of trust securities, any outstanding trust
preferred securities of those holders having an aggregate stated
liquidation amount equal to the aggregate principal amount of the
debentures so repurchased plus accrued and unpaid distributions, including
any deferred distributions.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
We shall have the right at any time, and from time to time, during
the term of the debentures, to defer payments of interest by extending the
interest payment period for a period not extending beyond the maturity date
of the debentures, at the end of which extension period, we shall pay all
interest then accrued and unpaid, including any expenses and taxes of the
trust, together with interest compounded quarterly at the rate of 6.45% per
year through and including February 15, 2001, and at the reset rate
afterwards, to the extent permitted by applicable law ("compound
interest"). However, during any extension period,
(a) we shall not declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of our capital
stock, other than
o purchases or acquisitions of our capital stock in
connection with the satisfaction of our obligations
under any employee or agent benefit plans or under
any contract or security outstanding on the date of
that event requiring us to purchase our capital
stock,
o as a result of a reclassification of our capital
stock or the exchange or conversion of one class or
series of our capital stock for another class or
series of our capital stock,
o the purchase of fractional interests in shares of our
capital stock pursuant to the conversion or exchange
provisions of our capital stock or the security being
converted or exchanged,
o dividends or distributions in our capital stock (or
rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance
or exchange of capital stock or
o redemptions or repurchases of any rights outstanding
under a shareholder rights plan,
(b) we shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt
securities issued by us that rank junior to those
debentures, and
(c) we shall not make any guarantee payments with respect to the
above other than according to the guarantee or the common
securities guarantee.
Prior to the termination of any extension period, we may further
defer payments of interest by extending the interest payment period.
However, the extension period, including all previous and further
extensions, may not extend beyond the February 16, 2003. Upon the
termination of any extension period and the payment of all amounts then
due, we may commence a new extension period, subject to the terms specified
in this section. No interest during an extension period, except at its end,
shall be due and payable, but we, at our option, may prepay on any interest
payment date all of the interest accrued during the then elapsed portion of
an extension period. We have no present intention of exercising our right
to defer payments of interest by extending the interest payment period on
the debentures.
If the institutional trustee shall be the sole holder of the
debentures, we shall give the regular trustees and the institutional
trustee notice of its selection of that extension period one business day
prior to the earlier of
(1) the date distributions on the trust preferred securities are
payable or
(2) the date the regular trustees are required to give notice,
if applicable, to the NYSE, other applicable self-regulatory
organization or to holders of the trust preferred securities
of the record or payment date of that distribution.
The regular trustees shall give notice of our selection of that
extension period to the holders of the trust preferred securities. If the
institutional trustee shall not be the sole holder of the debentures, we
shall give the holders of the debentures notice of our selection of that
extension period ten business days prior to the earlier of
(1) the interest payment date or
(2) the date upon which we are required to give notice, if
applicable, to the NYSE, other applicable self-regulatory
organization or to holders of the debentures of the record
or payment date of that related interest payment.
EXPENSES AND TAXES OF THE TRUST
In the indenture, we, as borrower, have agreed to pay all debts and
other obligations, other than with respect to the trust securities, and all
costs and expenses of the trust. These include the costs and expenses
relating to the organization of the trust, the fees and expenses of the
trustees and the costs and expenses relating to the operation of the trust
and any and all related taxes costs and expenses, other than United States
withholding taxes, to which the trust might become subject. We also have
agreed in the indenture to execute those additional agreements as may be
necessary or desirable to give full effect to the above.
INDENTURE EVENTS OF DEFAULT
If any indenture event of default shall occur and be continuing,
the institutional trustee, as the holder of the debentures, will have the
right to declare the principal of and the interest on the debentures,
including any compound interest and expenses and taxes of the trust, if
any, and any other amounts payable under the indenture, to be due and
payable and to enforce its other rights as a creditor with respect to the
debentures.
The following are events of default under the indenture with
respect to the debentures:
o failure to pay interest on the debentures when due,
continued for a period of 30 days. However, if we are
permitted by the terms of the debentures to defer the
payment in question, then the date on which that payment is
due and payable shall be the date on which we are required
to make payment following that deferral, if that deferral
has been elected according to the terms of the debentures;
o failure to pay the principal of or premium, if any, on the
debentures when due and payable on February 16, 2003, upon
redemption or otherwise. However, if we are permitted by the
terms of the debentures to defer the payment in question,
the date on which that payment is due and payable shall be
the date on which we are required to make payment following
the deferral, if the deferral has been elected according to
the terms of the debentures;
o failure to observe or perform in any material respect other
covenants contained in the indenture, continued for a period
of 90 days after written notice has been given to us by the
debt trustee or holders of at least 25% in aggregate
principal amount of the outstanding debentures; and
o particular events of our bankruptcy, insolvency or
reorganization.
The indenture provides that the debt trustee shall, within 90 days
after the occurrence of any default or event of default with respect to the
debentures, give the holders of the debentures notice of all uncured
defaults or events of default known to it. The term default includes any
event which after notice or passage of time or both would be an event of
default.
However, in the case of a default in the payment of the principal
of or premium, if any, on, or interest on any debt securities of that
series, or in the payment of any sinking fund installment with respect to
debt securities of that series, the trustee shall be protected in
withholding that 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 trustee in good faith determines that the withholding of
that notice is in the interest of the holders of debt securities of that
series and any related coupons. Except that in the case of an event of
default or a default in a payment on the debentures, the debt trustee shall
be protected in withholding the notice so long as the board of directors,
the executive committee or directors or responsible officers of the debt
trustee in good faith determine that the withholding of that notice is in
the interest of the holders of the debentures.
If an event of default with respect to the debentures occurs and is
continuing, the debt trustee or the holders of at least 25% in aggregate
principal amount of the outstanding debentures, by notice in writing to us
and to the debt trustee if given by the holders of at least 25% in
aggregate principal amount of the debentures, may declare the unpaid
principal of and accrued interest to the date of acceleration on all the
outstanding debentures to be due and payable immediately and, upon that
declaration, the debentures shall become immediately due and payable.
In addition, in the case of the debentures held by the trust, if an
event of default has occurred and is continuing, and that event is
attributable to our failure to pay interest or principal, then a holder of
trust preferred securities may directly institute a proceeding against us
for payment.
Any declaration with respect to the debentures may be annulled and
past events of default and defaults, except, unless cured, an event of
default or a default in payment of principal of or interest on the
debentures, may be waived by the holders of a majority of the principal
amount of the outstanding debentures, upon the conditions provided in the
indenture.
The indenture provides that we shall periodically file statements
with the debt trustee regarding compliance by us with some of its
respective covenants and shall specify any event of default or defaults
with respect to the debentures, in performing those covenants, of which we
as signers may have knowledge.
An indenture event of default also constitutes a declaration event
of default. The holders of trust preferred securities in some circumstances
have the right to direct the institutional trustee to exercise its rights
as the holder of the debentures. Notwithstanding the above, if an event of
default has occurred and is continuing and that event is attributable to
our failure to pay interest or principal on the debentures on the date that
interest or principal is otherwise payable, we acknowledge that a holder of
trust preferred securities may directly institute a proceeding for
enforcement of payment to that holder directly of the principal of and
interest on the debentures having a principal amount equal to the aggregate
stated liquidation amount of the trust preferred securities of that holder
after the respective due date specified in the debentures. In connection
with that action, we shall have the right under the indenture to set-off
any payment made to that holder by us. The holders of trust preferred
securities will not be able to exercise directly any other remedy available
to the holders of the debentures.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of trust preferred securities in
connection with the involuntary or voluntary dissolution of the trust, the
debentures will be issued in the form of one or more global certificates
(each a "global security") registered in the name of the depositary or its
nominee. Except under the limited circumstances described below, debentures
represented by the global security will not be exchangeable for, and will
not otherwise be issuable as, debentures in certificated form. The global
securities described above may not be transferred except by the depositary
to a nominee of the depositary or by a nominee of the depositary to the
depositary or another nominee of the depositary or to a successor
depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in certificated form. These
laws may impair the ability to transfer beneficial interests in a global
security.
Except as provided below, owners of beneficial interests in a
global security will not be entitled to receive physical delivery of
debentures in certificated form and will not be considered its holders for
any purpose under the indenture. No global security representing debentures
shall be exchangeable, except for another global security of like
denomination and tenor to be registered in the name of the depositary or
its nominee or to a successor depositary or its nominee. Accordingly, each
beneficial owner must rely on the procedures of the depositary or if that
person is not a participant, on the procedures of the participant through
which that person owns its interest to exercise any rights of a holder
under the indenture.
THE DEPOSITARY
If debentures are distributed to holders of trust preferred
securities in liquidation of those holders' interests in the trust, the
depositary will act as securities depositary for the debentures. As of the
date of this prospectus, the description of the depositary's book-entry
system and the depositary's practices as they relate to purchases,
transfers, notices and payments with respect to the trust preferred
securities apply in all material respects to any debt obligations
represented by one or more global securities held by the depositary. We may
appoint a successor to the depositary or any successor depositary if the
depositary or a successor depositary is unable or unwilling to continue as
a depositary for the global securities.
Neither us nor the trust, the institutional trustee, any paying
agents, any of our other agents or the debt trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global
security for the debentures or for maintaining, supervising or reviewing
any records relating to those beneficial ownership interests.
A global security shall be exchangeable for debentures registered
in the names of persons other than the depositary or its nominee only if
(1) the depositary notifies us that it is unwilling or unable to
continue as a depositary for that global security and no
successor depositary shall have been appointed,
(2) the depositary at any time, ceases to be a clearing agency
registered under the Exchange Act at which time the
depositary is required to be so registered to act as a
depositary and no successor
depositary shall have been appointed,
(3) we, in our sole discretion, determine that the global
security shall be so exchangeable or
(4) there shall have occurred an indenture event of default with
respect to such debentures.
Any global security that is exchangeable according to the preceding
sentence shall be exchangeable for debentures registered in those names as
the depositary shall direct. It is expected that these instructions will be
based upon directions received by the depositary from its participants with
respect to ownership of beneficial interests in the global security.
GOVERNING LAW
The indenture and the debentures will be governed by, and construed
in accordance with, the internal laws of the State of New York.
MISCELLANEOUS
We will pay all fees and expenses related to
(1) the offering of the trust securities and the debentures,
(2) the organization, maintenance and dissolution of the trust,
(3) the retention of the trustees and
(4) the enforcement by the institutional trustee of the rights
of the holders of the trust preferred securities.
EFFECT OF OBLIGATIONS UNDER THE
DEBENTURES AND THE GUARANTEE
As provided in the declaration, the sole purpose of the trust is to
issue the trust securities evidencing undivided beneficial interests in the
assets of the trust, and to invest the proceeds from the issuance and sale
in the debentures and engage in only other necessary or incidental
activities.
As long as payments of interest and other payments are made when
due on the debentures, those payments will be sufficient to cover
distributions and payments due on the trust securities because of the
following factors:
o the aggregate principal amount of debentures will be equal
to the sum of the aggregate stated liquidation amount of the
trust securities;
o the interest rate and the interest and other payment dates
on the debentures will match the distribution rate and
distribution and other payment dates for the trust
securities;
o we shall pay, and the trust shall not be obligated to pay,
directly or indirectly, all costs, expenses, debts, and
obligations of the trust, other than with respect to the
trust securities; and
o the declaration further provides that the trustees shall not
take or cause or permit the trust to, among other things,
engage in any activity that is not consistent with the
purposes of the trust.
Payments of distributions, to the extent funds are available, and
other payments due on the trust preferred securities, to the extent funds
therefor are available, are guaranteed by us as to the extent provided
under "Description of the Guarantee." If we do not make interest payments
on the debentures purchased by the trust, the trust will not have
sufficient funds to pay distributions on the trust preferred securities.
The guarantee does not apply to any payment of distributions unless and
until the trust has sufficient funds for the payment of such distributions.
If we fail to make interest or other payments on the debentures
when due, taking account of any extension period, the declaration provides
a mechanism enabling the holders of the trust preferred securities to
direct the institutional trustee to enforce its rights under the indenture.
If the institutional trustee fails to enforce its rights under the
indenture in respect of an indenture event of default, a holder of record
of trust preferred securities may, to the fullest extent permitted by
applicable law, institute a legal proceeding against us to enforce the
institutional trustee's rights under the indenture without first
instituting any legal proceeding against the institutional trustee or any
other person or entity.
Notwithstanding the above, if a declaration event of default has
occurred and is continuing and that event is attributable to our failure to
pay interest or principal on the debentures on the date that interest or
principal is otherwise payable, then a holder of trust preferred securities
may directly institute a proceeding against us for payment. We, under the
guarantee, acknowledge that the guarantee trustee shall enforce the
guarantee on behalf of the holders of the trust preferred securities. If we
fail to make payments under the guarantee, the guarantee provides a
mechanism enabling the holders of the trust preferred securities to direct
the guarantee trustee to enforce its rights under the guarantee.
Notwithstanding the above, if we fail to make a payment under the
guarantee, any holder of trust preferred securities may institute a legal
proceeding directly against us to enforce its rights under the guarantee
without first instituting a legal proceeding against the trust, the
guarantee trustee, or any other person or entity.
The guarantee, when taken together with our obligations under the
debentures and the indenture and its obligations under the declaration,
including its obligations to pay costs, expenses, debts and liabilities of
the trust, other than with respect to the trust securities, has the effect
of providing a full and unconditional guarantee of amounts due on the trust
preferred securities.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain of the material United States
federal income tax consequences of the acquisition, ownership and
disposition of FELINE PRIDES, trust preferred securities and common stock
acquired under a purchase contract. Unless otherwise stated, the summary
deals only with FELINE PRIDES, trust preferred securities and common stock
held as capital assets (generally, assets held for investment) by U.S.
holders that purchase FELINE PRIDES from Cendant pursuant to this offering.
The tax treatment of a U.S. holder may vary depending on its particular
situation. This summary does not address all of the tax consequences that
may be relevant to holders that may be subject to special tax treatment
such as, for example, insurance companies, broker dealers, tax-exempt
organizations, or foreign taxpayers. In addition, this summary does not
address the tax consequences to shareholders, partners or beneficiaries of
a holder of FELINE PRIDES, trust preferred securities or common stock, nor
does it address any aspects of state, local, or foreign tax laws. This
summary is based on the United States federal income tax laws in effect as
of the date hereof, which is subject to change, possibly on a retroactive
basis. Each investor should consult its tax advisor as to the particular
tax consequences of acquiring, owning, and disposing of FELINE PRIDES or
trust preferred securities, including the application and effect of United
States federal, state, local, foreign and other tax laws.
No statutory, administrative or judicial authority directly
addresses the treatment of FELINE PRIDES or instruments similar of FELINE
PRIDES for United States federal income tax purposes. As a result, no
assurance can be given that the IRS will agree with the tax consequences
described herein.
For purposes of this summary, the term "U.S. holder" means a holder
of FELINE PRIDES or trust preferred securities that is, for United States
federal income tax purposes, (1) a citizen or resident of the United
States, (2) a corporation or partnership created or organized in or under
the laws of the United States or any state thereof or the District of
Columbia, (3) an estate the income of which is subject to United States
federal income taxation, regardless of its source, (4) a trust if a court
within the United States is able to exercise primary supervision over the
administration of such trust and one or more United States persons have the
authority to control all substantial decisions of such trust or (5) any
person or entity otherwise subject to United States federal income taxation
on a net basis in respect of its investment in FELINE PRIDES.
The following summary does not address the tax consequences
associated with the acquisition of rights. Holders that acquire rights as
part of a litigation settlement or otherwise should consult their tax
advisors concerning the tax consequences associated with such acquisition
of the rights.
ACQUISITION, OWNERSHIP AND DISPOSITION OF FELINE PRIDES
U.S. HOLDERS THAT ACQUIRE AND IMMEDIATELY EXCHANGE ADDITIONAL
FELINE PRIDES AND RIGHTS FOR NEW FELINE PRIDES. The purchase of additional
FELINE PRIDES pursuant to this offering by a U.S. holder of rights that is
required to immediately exchange those additional FELINE PRIDES and rights
for new FELINE PRIDES should be treated as a single integrated transaction
for United States federal income tax purposes. Accordingly, (1) such a U.S.
holder's acquisition of additional FELINE PRIDES should be disregarded and
(2) the U.S. holder should be treated as having purchased new FELINE PRIDES
for an amount equal to the cash paid for the additional FELINE PRIDES plus
the fair market value of the rights exchanged for the new FELINE PRIDES. In
that event, the U.S. holder would recognize gain or loss on the transfer of
the rights equal to the difference between the fair market value of the
rights and the U.S. holder's tax basis in the rights. The gain or loss
would be capital gain or loss, and would generally be long-term capital
gain or loss if the U.S. holder held the rights for more than one year
immediately prior to the exchange. Long-term capital gains of individuals
are eligible for reduced rates of taxation. The deductibility of capital
losses is subject to limitations.
U.S. HOLDERS THAT PURCHASE AND CONTINUE TO HOLD ADDITIONAL FELINE
PRIDES. The treatment of the acquisition of additional FELINE PRIDES by
U.S. holders that continue to hold the additional FELINE PRIDES, if any, is
not clear, in part because the purchase contract related to the additional
FELINE PRIDES currently has a negative value and there is no authority
directly on point as to how such negative value should be characterized. It
is possible that a U.S. holder that purchases additional FELINE PRIDES
pursuant to this offering and continues to hold the additional FELINE
PRIDES would be considered to have received consideration to assume the
obligations under the related purchase contract in an amount equal to that
negative value, and to have paid that amount, in addition to the purchase
price, for the trust preferred securities or treasury securities related to
additional FELINE PRIDES. Any U.S. holders that purchase additional FELINE
PRIDES and that continue to hold the additional FELINE PRIDES should
consult their tax advisors concerning the acquisition of additional FELINE
PRIDES when the related purchase contracts have a negative value.
U.S. HOLDERS THAT DELIVER RIGHTS AND CURRENT FELINE PRIDES (OR
ADDITIONAL FELINE PRIDES OBTAINED IN THE SECONDARY MARKET) IN EXCHANGE FOR
NEW FELINE PRIDES. A U.S. holder that delivers rights and current FELINE
PRIDES (or additional FELINE PRIDES acquired in the secondary market) in
exchange for new FELINE PRIDES should be treated as transferring the
purchase contracts related to the current FELINE PRIDES or additional
FELINE PRIDES, together with the rights, in exchange for the purchase
contracts related to the new FELINE PRIDES.
There is no authority addressing the treatment, under current law,
of the transfer of the purchase contracts related to the current FELINE
PRIDES (or additional FELINE PRIDES acquired in the secondary market) and
the rights in exchange for the purchase contracts related to the new FELINE
PRIDES. Although the matter is not free from doubt, a U.S. holder would
likely (1) recognize capital gain or loss on the cancellation of the
purchase contracts related to the current FELINE PRIDES (or additional
FELINE PRIDES acquired in the secondary market) equal to the difference
between the fair market value (which may be negative) of the cancelled
purchase contracts and the U.S. holder's adjusted tax basis in the
cancelled purchase contracts and (2) recognize capital gain or loss on the
transfer of the rights equal to the difference between the fair market
value of the rights and the U.S. holder's tax basis in the transferred
rights. In each case, the capital gain or loss would be long-term or
short-term capital gain or loss depending upon the U.S. holder's holding
period for the surrendered purchase contracts and surrendered rights,
respectively. If the purchase contracts related to the new FELINE PRIDES
were to have a negative value at the time the exchange of purchase
contracts described above took place, it is possible that the U.S. holder's
loss on the cancellation of the purchase contracts related to the current
FELINE PRIDES (or additional FELINE PRIDES acquired in the secondary
market) would be limited to the fair market value of the rights
surrendered. Alternatively, the U.S. holder could be treated as having
received consideration to enter into the purchase contracts related to the
new FELINE PRIDES in an amount equal to their negative value and to have
paid that amount, in addition to the rights, to be released from its
obligation under the purchase contracts surrendered in the exchange. The
U.S. holder's tax basis in the purchase contracts related to the new FELINE
PRIDES would likely equal their fair market value (but likely would not be
less than zero, even if the new purchase contracts had negative value at
the time they were transferred to the holder). U.S. holders should consult
their tax advisors regarding the exchange of the purchase contracts related
to the current FELINE PRIDES (or additional FELINE PRIDES acquired on the
secondary market) and the rights for the purchase contracts related to the
new FELINE PRIDES.
ALLOCATION OF PURCHASE PRICE. In general, a U.S. holder that
acquires new FELINE PRIDES through the purchase from and immediate
surrender of additional FELINE PRIDES to Cendant or that acquires
additional FELINE PRIDES which such holder is not required to surrender (if
additional FELINE PRIDES are sold to any such persons) should be treated as
acquiring a unit consisting of two components -- in the case of an Income
PRIDES, a trust preferred security and a purchase contract constituting
such Income PRIDES and, in the case of a Growth PRIDES, an interest in a
treasury security and a purchase contract constituting such Growth PRIDES.
The amount paid for each FELINE PRIDES generally will be allocated between
the two components in proportion to their respective fair market values at
the time of purchase. Such allocation will establish the U.S. holder's
initial tax bases in the trust preferred security or interest in the
treasury security, as the case may be, and the purchase contract.
The proper allocation of the purchase price of an additional FELINE
PRIDES is not clear, in part because the purchase contract related to an
additional FELINE PRIDES currently has a negative value and there is no
authority directly on point as to how such negative value should be
allocated. It is possible that the purchase of additional FELINE PRIDES
would be treated as if the U.S. holder received consideration to assume the
obligations under the related purchase contract in an amount equal to that
negative value, and to have paid that amount, in addition to the purchase
price, for the related trust preferred security.
Based upon the above, Cendant will report the fair market value of
each trust preferred security and each interest in a treasury security so
that (1) in the case of new FELINE PRIDES, the amount allocable to the
trust preferred security and interest in the treasury security, as the case
may be, will equal the cash paid for the additional FELINE PRIDES plus the
fair market value of the rights exchanged for that new FELINE PRIDES, and
therefore will be $ and $ , respectively, and the amount allocable to the
purchase contract will be $ , and (2) in the case of additional FELINE PRIDES
(other than any additional FELINE PRIDES that are immediately surrendered
for new FELINE PRIDES), the amount allocable to the trust preferred
security and interest in a treasury security, as the case may be, will
equal the cash paid for that additional FELINE PRIDES plus an amount equal
to the negative value of the related purchase contract, and therefore will
be $ and $ , respectively, and no amount will be allocable to the purchase
contract. These positions will be binding upon each U.S. holder (but not on
the IRS) unless the U.S. holder explicitly discloses a contrary position on
a statement attached to that U.S. holder's timely filed United States
federal income tax return for the taxable year in which a FELINE PRIDES is
acquired. Thus, absent such disclosure, a U.S. holder should allocate the
purchase price for a FELINE PRIDES in accordance with the allocations set
forth above. The remainder of this discussion assumes that these
allocations of the purchase price of new FELINE PRIDES and additional
FELINE PRIDES will be respected for United States federal income tax
purposes. A different allocation could affect the timing and character of
income to a U.S. holder.
OWNERSHIP OF TRUST PREFERRED SECURITIES OR TREASURY SECURITIES. A
U.S. holder will be treated as owning the trust preferred securities or
treasury securities constituting a part of the Income PRIDES or Growth
PRIDES, respectively. Cendant and, by acquiring FELINE PRIDES, each U.S.
holder agree to treat that holder as the owner, for United States federal,
state and local income and franchise tax purposes, of the trust preferred
securities or treasury securities constituting a part of the FELINE PRIDES
beneficially owned by that U.S. holder. Based upon this agreement, Cendant
intends to take the position, and the remainder of this summary assumes,
that U.S. holders of FELINE PRIDES will be treated as the owners of the
trust preferred securities or treasury securities constituting a part of
their FELINE PRIDES for United States federal, state and local income and
franchise tax purposes. The United States federal income tax consequences
of owning the trust preferred securities or treasury securities are
discussed below. See "-- Trust Preferred Securities", "-- Treasury
Securities" and "-- Tax Event Redemption of Trust Preferred Securities."
SALES, EXCHANGES OR OTHER TAXABLE DISPOSITIONS OF FELINE PRIDES.
Upon a sale, exchange or other taxable disposition (collectively, a
"disposition") of FELINE PRIDES, a U.S. holder will be treated as having
sold, exchanged or disposed of the purchase contract and the trust
preferred securities, treasury portfolio or, in the case of Growth PRIDES,
the treasury securities, that constitute those FELINE PRIDES, and will
generally have gain or loss equal to the difference between the portion of
the proceeds to the U.S. holder allocable to the purchase contract and the
trust preferred securities, treasury portfolio or treasury securities, as
the case may be, and that U.S. holder's respective adjusted tax bases in
the purchase contract and the trust preferred securities, treasury
portfolio or treasury securities. Such gain or loss will generally be
capital gain or loss, except to the extent that the U.S. holder is treated
as receiving an amount with respect to accrued but unpaid interest on the
trust preferred securities or the treasury portfolio, which amount will be
treated as ordinary interest income, or to the extent the U.S. holder is
treated as receiving an amount with respect to accrued contract adjustment
payments or deferred contract adjustment payments, which may be treated as
ordinary income, in each case to the extent not previously included in
income. Such capital gain or loss will generally be long-term capital gain
or loss if the U.S. holder held the FELINE PRIDES for more than one year
immediately prior to their disposition. Long-term capital gains of
individuals are eligible for reduced rates of taxation. The deductibility
of capital losses is subject to limitations. If a disposition of FELINE
PRIDES were to occur when the purchase contract had negative value,
although the matter is not free from doubt, the U.S. holder should be
considered to have received additional consideration for the trust
preferred securities, treasury portfolio or treasury securities, as the
case may be, in an amount equal to such negative value and to have paid
that amount to be released from its obligation under the purchase contract.
U.S. holders should consult their tax advisors regarding a disposition of
the FELINE PRIDES at a time when the purchase contract has negative value.
In determining gain or loss, payments to a U.S. holder of contract
adjustment payments or deferred contract adjustment payments properly
excluded from income should either reduce that U.S. holder's adjusted tax
basis in the purchase contract or result in an increase in the amount
realized on the disposition of the purchase contract. Any contract
adjustment payments or deferred contract adjustment payments included in a
U.S. holder's income but not paid should increase the U.S. holder's
adjusted tax basis in the purchase contract. Payments in cash that have
been made by a U.S. holder to create Growth PRIDES but not offset against
payments of contract adjustment payments or deferred contract adjustment
payments may increase the U.S. holder's adjusted tax basis in the purchase
contract or result in a decrease in the amount realized on the disposition
of the purchase contract. See "--Contract Adjustment Payments and Deferred
Contract Adjustment Payments; Delivery of Cash."
TRUST PREFERRED SECURITIES
MERGER OF THE TRUSTS. There is no direct authority addressing the
treatment, under current law, of the merger of the trust that was formed in
connection with the issuance of the current Income PRIDES with the trust
created pursuant to this offering. Cendant intends to take the position,
and the remainder of this summary assumes, that the merger of these trusts
will be treated as though each holder of current Income PRIDES exchanged a
portion of such holder's debentures underlying the current Income PRIDES
for a portion of the debentures issued by Cendant to the trust created
pursuant to this offering. In that event, the exchange of a portion of the
debentures related to the current Income PRIDES for a portion of the
debentures issued pursuant to this offering will not constitute an exchange
of property differing materially either in kind or in extent. As a result,
there will be no immediate United States federal income tax consequences
with respect to this exchange, and a U.S. holder of current Income PRIDES
will have the same adjusted tax basis and holding period in the trust
preferred securities as it had in the trust preferred securities
immediately before the merger. No assurance can be given that the IRS will
not disagree with this characterization of the merger of these trusts, and
U.S. holders should consult their tax advisors concerning the treatment of
the merger for United States federal income tax purposes.
CLASSIFICATION OF THE TRUST. Cendant believes that the trust
created pursuant to this offering will be classified as a grantor trust and
not as an association taxable as a corporation for United States federal
income tax purposes. Cendant, the trust and, by acquiring Income PRIDES or
trust preferred securities, each U.S. holder agree to treat the trust
created pursuant to this offering as a grantor trust for United States
federal income tax purposes. Based upon this agreement, Cendant intends to
take the position, and the remainder of this summary assumes, that each
U.S. holder of trust preferred securities will be treated as owning an
undivided beneficial ownership interest in the debentures and, as further
discussed below, each U.S. holder of trust preferred securities will be
required to include in its gross income its pro rata share of the interest
income or OID that is paid or accrued on the debentures. See "-- Interest
Income and Original Issue Discount."
CLASSIFICATION OF THE DEBENTURES. Cendant believes that the
debentures will be classified as indebtedness for United States federal
income tax purposes. Cendant, the trust and, by acquiring Income PRIDES or
trust preferred securities, each U.S. holder agree to treat the debentures
as indebtedness of Cendant for all United States tax purposes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT. Under the applicable
Treasury regulations and subject to the discussion below regarding
Cendant's right to defer payments of interest on the debentures, the
debentures issued pursuant to this offering will be considered to have been
issued with OID equal to the excess of 100.5% of their principal amount
over the amount of the original purchase price for the additional Income
PRIDES allocated to the debentures unless such excess is de minimis (less
than one-quarter of one percent of 100.5% of the principal amount). If the
debentures are treated as issued with OID, a U.S. holder will be required
to include such OID in income on an economic accrual basis over the period
between the issue date of the debentures and the date immediately preceding
the purchase contract settlement date regardless of the U.S. holder's
method of tax accounting. Consequently, each U.S. holder (including those
using the cash method of tax accounting) will be required to include OID in
income even though Cendant will not actually make current cash payments
with respect to such OID. In addition, stated interest on the debentures
(including the debentures issued by Cendant pursuant to the offering of the
current FELINE PRIDES) will generally be included in income by a U.S.
holder at the time such interest income is paid or accrued in accordance
with that U.S. holder's regular method of tax accounting.
If Cendant were to exercise its right to defer payments of interest
on the debentures, all of a U.S. holder's taxable interest income with
respect to the debentures would thereafter be accounted for on an economic
accrual basis regardless of such U.S. holder's method of tax accounting,
and actual distributions of stated interest on the debentures would not be
reported separately as taxable income. Consequently, each U.S. holder
(including those using a cash basis method of accounting) would be required
to accrue the stated interest on the debentures (as OID) on a daily
economic accrual basis even though Cendant would not make actual cash
payments during the deferral period. Any amount of OID included in a U.S.
holder's gross income would increase that U.S. holder's adjusted tax basis
in its trust preferred securities, and the amount of a distribution
received by a U.S. holder with respect to those trust preferred securities
would reduce the adjusted tax basis of such trust preferred securities.
The Treasury regulations governing the treatment of an issuer's
right to defer payments of interest have not yet been addressed in any
rulings or other interpretations by the IRS and it is possible that the IRS
could take a contrary position. If the IRS were to assert successfully that
the stated interest on the debentures was OID regardless of whether or not
Cendant exercised its right to defer payments of interest on such
debentures, all U.S. holders would be required to include stated interest
on the debentures in income on a daily economic accrual basis as described
above.
U.S. holders that are corporations will not be entitled to a
dividends received deduction with respect to any income recognized with
respect to the trust preferred securities.
DISTRIBUTION OF DEBENTURES TO U.S. HOLDERS OF TRUST PREFERRED
SECURITIES. A distribution by the trust of the debentures as described
under the caption "Description of the Trust Preferred Securities --
Liquidation Distribution Upon Dissolution" would not be a taxable event to
U.S. holders. In the event of such a distribution, a U.S. holder would have
an aggregate adjusted tax basis in the debentures received in the
liquidation equal to the aggregate adjusted tax basis that the U.S. holder
had in its trust preferred securities surrendered in the liquidation of the
trust and the holding period of those debentures would include the period
during which the U.S. holder had held those trust preferred securities. In
addition, a U.S. holder would continue to include interest (or OID) in
respect of debentures received from the trust in the manner described under
"-- Interest Income and Original Issue Discount."
SALES, EXCHANGES OR OTHER TAXABLE DISPOSITIONS OF TRUST PREFERRED
SECURITIES. Gain or loss will be recognized by a U.S. holder on a
disposition of a trust preferred security (including a redemption for cash
or the remarketing of the trust preferred security) in an amount equal to
the difference between the amount realized by the U.S. holder on the
disposition of the trust preferred security (except to the extent that the
amount realized is characterized as a payment in respect of accrued but
unpaid interest on the U.S. holder's allocable share of the debentures that
the U.S. holder has not previously included in gross income, which amount
will be subject to tax as ordinary interest income) and the U.S. holder's
adjusted tax basis in that trust preferred security. Selling expenses
incurred by a U.S. holder, including the remarketing fee, will reduce the
amount of gain or increase the amount of loss recognized by the U.S. holder
upon a disposition of a trust preferred security. Gain or loss realized by
a U.S. holder on a disposition of a trust preferred security generally will
be capital gain or loss and generally will be long-term capital gain or
loss if the U.S. holder held that trust preferred security for more than
one year immediately prior to its disposition. Long-term capital gains of
individuals are eligible for reduced rates of taxation. The deductibility
of capital losses is subject to limitations.
TREASURY SECURITIES
ORIGINAL ISSUE DISCOUNT. A U.S. holder of Growth PRIDES will be
required to treat its ownership interest in the treasury securities
comprising a Growth PRIDES as an interest in a bond that was originally
issued on the date the Growth PRIDES is purchased and that has OID equal to
the excess of the stated amount of the Growth PRIDES over the purchase
price of the Growth PRIDES. A U.S. holder will be required to include that
OID in income on a daily economic accrual basis over the period between the
issue date of the Growth PRIDES and the day immediately preceding the
purchase contract settlement date, regardless of the U.S. holder's method
of tax accounting and in advance of the receipt of cash attributable to
that OID. Amounts of OID included in a U.S. holder's gross income will
increase the U.S. holder's adjusted tax basis in its interest in the
treasury securities.
SALES, EXCHANGES OR OTHER TAXABLE DISPOSITIONS OF TREASURY
SECURITIES. In the event that a U.S. holder obtains the release of treasury
securities by delivering trust preferred securities to the collateral
agent, gain or loss will be recognized by the U.S. holder on a subsequent
disposition of the treasury securities in an amount equal to the difference
between the amount realized by the U.S. holder on the disposition and the
U.S. holder's adjusted tax basis in the treasury securities. Such gain or
loss generally will be capital gain or loss and generally will be long-term
capital gain or loss if the U.S. holder held those treasury securities for
more than one year immediately prior to their disposition. Long-term
capital gains of individuals are eligible for reduced rates of taxation.
The deductibility of capital losses is subject to limitations.
PURCHASE CONTRACTS
CONTRACT ADJUSTMENT PAYMENTS AND DEFERRED CONTRACT ADJUSTMENT
PAYMENTS; DELIVERY OF CASH. There is no direct authority addressing the
treatment, under current law, of the contract adjustment payments and
deferred contract adjustment payments, or the delivery of cash in respect
of excess accrued contract adjustment payments by a U.S. holder of Income
PRIDES upon the creation of Growth PRIDES and such treatment is, therefore,
unclear. Contract adjustment payments and deferred contract adjustment
payments may constitute taxable income to a U.S. holder of FELINE PRIDES
when received or accrued, in accordance with the U.S. holder's regular
method of tax accounting. To the extent that Cendant is required to file
information returns with respect to contract adjustment payments or
deferred contract adjustment payments, it intends to report those payments
as taxable income to each U.S. holder. U.S. holders should consult their
tax advisors concerning the treatment of contract adjustment payments and
deferred contract adjustment payments and the delivery of cash upon the
creation of Growth PRIDES, including the possibility that any contract
adjustment payment or deferred contract adjustment payment may be treated
as a loan, purchase price adjustment, rebate or payment analogous to an
option premium, rather than being includible in income on a current basis,
and that the delivery of cash upon the creation of Growth PRIDES may be
treated as an offset to contract adjustment payments or deferred contract
adjustment payments or as a purchase price adjustment. The treatment of
contract adjustment payments, deferred contract adjustment payments and the
delivery of cash upon the creation of Growth PRIDES could affect a U.S.
holder's adjusted tax basis in a purchase contract or common stock received
under a purchase contract or the amount realized by a U.S. holder upon the
disposition of a FELINE PRIDES or the termination of a purchase contract.
See "-- Acquisition of Common Stock Under a Purchase Contract," "-- Sales,
Exchanges or Other Taxable Dispositions of FELINE PRIDES" and "--
Termination of Purchase Contract."
ACQUISITION OF COMMON STOCK UNDER A PURCHASE CONTRACT. A U.S.
holder of FELINE PRIDES generally will not recognize gain or loss on the
purchase of common stock under a purchase contract, except with respect to
any cash received in lieu of a fractional share of common stock. Subject to
the following discussion, a U.S. holder's aggregate initial tax basis in
the common stock received under a purchase contract should generally equal
the purchase price paid for such common stock plus that U.S. holder's
adjusted tax basis in the purchase contract, if any, less the portion of
that purchase price and adjusted tax basis allocable to the fractional
share. Payments of contract adjustment payments or deferred contract
adjustment payments that have been received in cash by a U.S. holder but
properly excluded from income by that U.S. holder should reduce the U.S.
holder's adjusted tax basis in the purchase contract or the common stock to
be received under that purchase contract; payments in cash that have been
made by a U.S. holder to create Growth PRIDES but not offset against
payments of contract adjustment payments or deferred contract adjustment
payments may increase that U.S. holder's adjusted tax basis in the purchase
contract or the common stock to be received under that purchase contract.
See "-- Contract Adjustment Payments and Deferred Contract Adjustment
Payments." The holding period for common stock received under a purchase
contract will commence on the day following the acquisition of that common
stock.
OWNERSHIP OF COMMON STOCK ACQUIRED UNDER THE PURCHASE CONTRACT. Any
distribution on common stock paid by Cendant out of its current or
accumulated earnings and profits, as determined for United States federal
income tax purposes, will constitute a dividend and will be includible in
income by a U.S. holder when received. Any dividend on the common stock
will be eligible for the dividends received deduction if received by an
otherwise qualifying corporate U.S. holder that meets the holding period
and other requirements for the dividends received deduction.
Upon a disposition of common stock, a U.S. holder generally will
recognize capital gain or loss equal to the difference between the amount
realized and the U.S. holder's adjusted tax basis in the common stock. Such
capital gain or loss generally will be long-term capital gain or loss if
the U.S. holder held that common stock for more than one year immediately
prior to its disposition. Long-term capital gains of individuals are
eligible for reduced rates of taxation. The deductibility of capital losses
is subject to limitations.
EAR1Y SETTLEMENT OF PURCHASE CONTRACT. A U.S. holder of FELINE
PRIDES will not recognize gain or loss on the receipt of its proportionate
share of trust preferred securities, treasury securities or the treasury
portfolio upon early settlement of a purchase contract and will have the
same adjusted tax basis in those trust preferred securities, treasury
securities or the treasury portfolio as before the early settlement. Any
contract adjustment payments or deferred contract adjustment payments that
have been included in a U.S. holder's income but forfeited and not paid
upon early settlement of a purchase contract should increase that U.S.
holder's adjusted tax basis in the common stock received under a purchase
contract.
TERMINATION OF PURCHASE CONTRACT. If a purchase contract
terminates, a U.S. holder of FELINE PRIDES will recognize gain or loss
equal to the difference between the amount realized, if any, upon the
termination and the U.S. holder's adjusted tax basis, if any, in the
purchase contract at the time of the termination. Payments of contract
adjustment payments or deferred contract adjustment payments received by a
U.S. holder but properly excluded from income by the U.S. holder should
either reduce the U.S. holder's adjusted tax basis in the purchase contract
or increase the amount realized on the termination of the purchase
contract. Any contract adjustment payments or deferred contract adjustment
payments included in a U.S. holder's income but not paid should increase
the U.S. holder's adjusted tax basis in the purchase contract; payments in
cash that have been made by a U.S. holder to create Growth PRIDES but not
offset against payments of contract adjustment payments or deferred
contract adjustment payments may increase the U.S. holder's adjusted tax
basis in the purchase contract or result in a deduction on the termination
of the purchase contract. See "-- Contract Adjustment Payments and Deferred
Contract Adjustment Payments." Such gain or loss generally will be capital
gain or loss and generally will be long-term capital gain or loss if the
U.S. holder held the purchase contract for more than one year immediately
prior to its termination. Long- term capital gains of individuals are
eligible for reduced rates of taxation. The deductibility of capital losses
is subject to limitations. A U.S. holder will not recognize gain or loss on
the receipt of its proportionate share of the trust preferred securities,
treasury securities or treasury portfolio upon termination of the purchase
contract and will have the same adjusted tax basis in those trust preferred
securities, treasury securities or treasury portfolio as before that
termination.
ADJUSTMENT TO SETTLEMENT RATE. U.S. holders of FELINE PRIDES might
be treated as receiving a constructive dividend distribution from Cendant
if (1) the settlement rate is adjusted and as a result of that adjustment,
the proportionate interest of U.S. holders of FELINE PRIDES in the assets
or earnings and profits of Cendant is increased and (2) the adjustment is
not made pursuant to a bona fide, reasonable anti-dilution formula. An
adjustment in the settlement rate would not be considered made pursuant to
such a formula if the adjustment were made to compensate a U.S. holder for
certain taxable distributions with respect to the Cendant's common stock.
SUBSTITUTION OF TREASURY SECURITIES TO CREATE OR RECREATE GROWTH PRIDES
A U.S. holder of an Income PRIDES that delivers treasury securities
to the collateral agent in substitution for trust preferred securities will
generally not recognize gain or loss upon the delivery of those treasury
securities or the release of the trust preferred securities to the U.S.
holder. The U.S. holder will continue to take into account items of income
or deduction otherwise includible or deductible, respectively, by that U.S.
holder with respect to those treasury securities and trust preferred
securities, and the U.S. holder's adjusted tax bases in the treasury
securities, the trust preferred securities and the purchase contract will
not be affected by such delivery and release.
SUBSTITUTION OF TRUST PREFERRED SECURITIES TO CREATE OR RECREATE INCOME PRIDES
A U.S. holder of a Growth PRIDES that delivers trust preferred
securities to the collateral agent in substitution for treasury securities
will generally not recognize gain or loss upon the delivery of those trust
preferred securities or the release of the treasury securities to the U.S.
holder. The U.S. holder will continue to take into account items of income
or deduction otherwise includible or deducible, respectively, by that U.S.
holder with respect to those treasury securities and trust preferred
securities, and the U.S. holder's adjusted tax bases in the treasury
securities, the trust preferred securities and the purchase contract will
not be affected by such delivery and release.
TAX EVENT REDEMPTION OF TRUST PREFERRED SECURITIES
A tax event redemption will be a taxable event for U.S. holders of
trust preferred securities which will be subject to tax in the manner
described under "Trust Preferred Securities - Sales, Exchanges or Other
Taxable Dispositions of Trust Preferred Securities."
OWNERSHIP OF TREASURY PORTFOLIO. Cendant, the trust and, by
acquiring Income PRIDES, each U.S. holder agree to treat that U.S. holder
as the owner, for United States federal, state and local income and
franchise tax purposes, of its applicable ownership interest of the
treasury portfolio constituting a part of the Income PRIDES beneficially
owned by that U.S. holder in the event of a tax event redemption prior to
the purchase contract settlement date. Based upon this agreement, each U.S.
holder will include in income any amount earned on its pro rata portion of
the treasury portfolio for all United States federal, state and local
income and franchise tax purposes. The remainder of this summary assumes
that U.S. holders of Income PRIDES will be treated as the owners of the
applicable ownership interest of the treasury portfolio constituting a part
of those Income PRIDES for United States federal, state and local income
and franchise tax purposes.
ORIGINAL ISSUE DISCOUNT. The treasury portfolio will consist of
stripped U.S. treasury securities. Following a tax event redemption prior
to the purchase contract settlement date, a U.S. holder of Income PRIDES
will be required to treat its pro rata portion of each U.S. treasury
security in the treasury portfolio as a bond that was originally issued on
the date the collateral agent acquired the relevant U.S. treasury security
and that has OID equal to the U.S. holder's pro rata portion of the excess
of the amounts payable on that U.S. treasury security over the value of the
U.S. treasury security at the time the collateral agent acquires them on
behalf of holders of Income PRIDES. A U.S. holder will be required to
include that OID in income on a daily economic basis over the life of the
U.S. treasury security. The aggregate amount of this excess will constitute
only a portion of the total amounts payable in respect of the treasury
portfolio. Consequently, a portion of each scheduled interest payment to
U.S. holders will be treated as a return of the U.S. holders' investment in
the treasury portfolio and will not be considered current income for United
States federal income tax purposes.
A U.S. holder, whether on the cash or accrual method of tax
accounting, will be required to include OID (other than OID on short-term
U.S. treasury securities as defined below) in income for United States
federal income tax purposes as it accrues on a constant yield to maturity
basis. See "Trust Preferred Securities-- Interest Income and Original Issue
Discount." In the case of any U.S. treasury security with a maturity of one
year or less from the date of its issue (as "short-term U.S. treasury
security"), in general only accrual basis taxpayers will be required to
include OID in income as it accrues. Unless an accrual basis U.S. holder
elects to accrue the OID on a short-term U.S. treasury security according
to the constant-yield-to-maturity method, such OID will be accrued on a
straight-line basis.
TAX BASIS OF THE TREASURY PORTFOLIO. A U.S. holder's initial tax
basis in its applicable ownership interest of the treasury portfolio will
equal the U.S. holder's pro rata portion of the amount paid by the
collateral agent for the treasury portfolio. A U.S. holder's adjusted tax
basis in the treasury portfolio will be increased by the amount of OID
included in income with respect to the treasury portfolio and decreased by
the amount of cash received in respect of the treasury portfolio.
PLAN OF DISTRIBUTION
We may sell the additional FELINE PRIDES offered in this prospectus
in any of, or any combination of, the following ways:
o directly to purchasers;
o through agents;
o through underwriters; or
o through dealers.
Offers to purchase may be solicited directly by us or by agents
designated by us from time to time. Any agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act of 1933, involved
in the offer or sale of the additional FELINE PRIDES will be named, and any
commissions payable by us to that agent will be described in prospectus
supplement. Unless otherwise indicated, any agent will be acting on a best
efforts basis for the period of its appointment, which is usually five
business days or less.
If an underwriter or underwriters are utilized in the offer or sale
of the additional FELINE PRIDES, we will execute an underwriting agreement
with the underwriters at the time of their sale to the underwriters and the
names of the underwriters and the principal terms of our agreement with the
underwriters will be described in prospectus supplement.
If a dealer is utilized in the offer or sale of additional FELINE
PRIDES, we will sell the additional FELINE PRIDES to that dealer, as
principal. That dealer may then resell them to the public at varying prices
to be determined by that dealer at the time of resale. The name of the
dealer and the principal terms of our agreement with that dealer will be
described in the prospectus supplement.
Agents, underwriters, and dealers may be entitled under agreements
with us to indemnification by us against certain liabilities, including
liabilities under the Securities Act of 1933. Agents, dealers and
underwriters may also be customers of, engage in transactions with, or
perform services for us in the ordinary course of their business.
Underwriters, agents or their controlling persons may engage in
transactions with and perform services for us in the ordinary course of
business.
The place and time of delivery for the additional FELINE PRIDES
will be described in the prospectus supplement.
LEGAL OPINIONS
The validity of the purchase contracts, the common stock issuable
upon their settlement and the debentures will be passed upon for us by Eric
J. Bock, Esq., our Vice President-Legal, and Skadden, Arps, Slate, Meagher
& Flom LLP. Several matters of Delaware law with respect to the validity of
the trust preferred securities offered here will be passed upon for us and
for the trust by Skadden, Arps, Slate, Meagher & Flom LLP. Mr. Bock owns
common stock and options to acquire shares of our common stock.
EXPERTS
The consolidated financial statements of Cendant and its
consolidated subsidiaries, except PHH Corporation ("PHH"), as of December
31, 1996 and for the year ended December 31, 1996 incorporated in this
prospectus by reference from our annual report on Form 10-K/A for the year
ended December 31, 1998 have been audited by Deloitte & Touche LLP as
stated in their report, (which expresses an unqualified opinion and
includes explanatory paragraphs relating to certain litigation as described
in Note 18, and the change in the method of recognizing revenue and
membership solicitation costs as described in Note 2) which is incorporated
herein by reference. The consolidated financial statements of PHH have been
audited by KPMG LLP, as stated in their report incorporated herein by
reference. Such consolidated financial statements of Cendant and its
consolidated subsidiaries are incorporated by reference herein in reliance
upon the respective reports of such firms given upon their authority as
experts in accounting and auditing. All of the foregoing firms are
independent auditors.
The financial statements of PHH Corporation for the year ended
December 31, 1996, are consolidated with those of Cendant. With respect to
the financial statements of PHH Corporation for the year ended December 31,
1996, the Cendant financial statements which are incorporated by reference
in this prospectus, have been incorporated by reference in reliance upon
the report of KPMG LLP, independent auditors, incorporated herein by
reference and upon the authority of such firm as experts in accounting and
auditing.
FORWARD-LOOKING STATEMENTS
We make statements about our future results in this prospectus that
may constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are
based on our current expectations and the current economic environment. We
caution you that these statements are not guarantees of future performance.
They involve a number of risks and uncertainties that are difficult to
predict. Our actual results could differ materially from those expressed or
implied in the forward-looking statements. Important assumptions and other
important factors that could cause our actual results to differ materially
from those in the forward-looking statements, include, but are not limited
to:
o the resolution or outcome of the pending litigation and government
investigations relating to the previously announced accounting
irregularities;
o uncertainty as to our future profitability and our ability to
integrate and operate successfully acquired businesses and the
risks associated with such businesses, including the merger that
created Cendant and the NPC acquisition;
o our ability to successfully divest non-strategic assets and
implement our new Internet strategy;
o our ability to develop and implement operational and financial
systems to manage rapidly growing operations;
o competition in our existing and potential future lines of business;
o our ability to obtain financing on acceptable terms to finance our
growth strategy and for us to operate within the limitations
imposed by financing arrangements; and
o our ability and our vendors', franchisees' and customers' ability
to complete the necessary actions to achieve a year 2000 conversion
for computer systems and applications.
We derived the forward-looking statements in this prospectus,
including the documents incorporated by reference in this prospectus, from
the above factors and from other factors and assumptions, and the failure
of such assumptions to be realized as well as other factors may also cause
actual results to differ materially from those projected. We assume no
obligation to publicly correct or update these forward-looking statements
to reflect actual results, changes in assumptions or changes in other
factors affecting such forward-looking statements or if we later become
aware that they are not likely to be achieved.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the
Securities and Exchange Commission. Our filings with the commission are
available to the public over the Internet at the commission's web site at
http:www.sec.gov. You may also read and copy any document we file at the
commission at the public reference rooms of the commission in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the commission
at 1-800-SEC-0330 for further information on the public reference rooms.
The commission allows us to "incorporate by reference" the
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus and
information that we file later with the commission will automatically
update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the commission
under sections 13(a), 13(c), 14 or 15(d) of the Exchange until we sell all
of the securities.
o Annual Report on Form 10-K/A for the year ended December 31, 1998,
filed on October 13, 1999 with the SEC
o Quarterly Report on Form 10-Q/A for the quarter ended March 31,
1999, filed on October 13, 1999 with the SEC
o Quarterly Report on Form 10-Q/A for the quarter ended June 30,
1999, filed on October 13, 1999 with the SEC
o Current Report on Form 8-K dated April 22, 1999
o Current Report on Form 8-K dated May 25, 1999
o Current Report on Form 8-K dated June 2, 1999
o Current Report on Form 8-K dated June 22, 1999
o Current Report on Form 8-K dated July 9, 1999
o Current Report on Form 8-K dated July 16, 1999
o Current Report on Form 8-K dated July 23, 1999
o Current Report on Form 8-K dated September 16, 1999
o Current Report on Form 8-K dated October 5, 1999
o The description of our common stock contained in the registration
statements on Form 8-A dated July 27, 1984 and August 15, 1989
You may request a copy of these filings at no cost, by writing or
telephoning us at the following:
Investor Relations
Cendant Corporation
9 West 57th Street
New York, NY 10019
Telephone: (212) 413-1800
-------------------------
You should rely only on the information contained or incorporated
by reference in this prospectus. Neither we nor any underwriter has
authorized anyone to provide you with different information. Neither we nor
any underwriter is making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should not
assume that the information contained or incorporated by reference in this
prospectus is accurate as of any date other than the date on the front
cover of this prospectus.
- ----------------------------------------------------------------------------
CENDANT CORPORATION
CENDANT CAPITAL II
CENDANT CAPITAL III
CENDANT CAPITAL IV
CENDANT CAPITAL V
NEW FELINE PRIDESSM
4,000,000
ADDITIONAL FELINE PRIDESSM
6.45% TRUST ORIGINATED
PREFERRED SECURITIES
("TOPRS"SM)
PROSPECTUS
,1999
smService Mark of Merrill Lynch & Co., Inc.
- ---------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission Registration Fee$343,338
*Trustee's Expenses................................$10,000
*Accounting Fees and Expenses......................$100,000
*Legal Fees and Expenses...........................$100,000
*Miscellaneous.....................................$200,000
Total Expenses.....................................$753,338
- ---------------
* Estimated for purposes of completing the information required
pursuant to this Item 14.
The Company will pay all fees and expenses associated with filing
the Registration Statement.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law empowers a
Delaware corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation)
by reason of the fact that such person is or was a director, officer,
employee or agent of such corporation or is or was serving at the request
of such corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise. The
indemnity may include expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
such person in connection with such action, suit or proceeding, provided
that such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interest of the corporation
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe such person's conduct was unlawful. A Delaware corporation
may indemnify directors, officers, employees and other agents of such
corporation in an action by or in the right of a corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the person to be indemnified has been adjudged to be liable to
the corporation. Where a director, officer, employee or agent of the
corporation is successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to above or in defense of any claim,
issue or matter therein, the corporation must indemnify such person against
the expenses (including attorneys' fees) which he or she actually and
reasonably incurred in connection therewith.
The Registrant's By-Laws contain provisions that provide for
indemnification of officers and directors and their heirs and distributees
to full extent permitted by, and in the manner permissible under, the
General Corporation Law of the State of Delaware.
As permitted by Section 102(b)(7) of the General Corporation Law of
the State of Delaware, registrant's Amended and Restated Certificate of
Incorporation contains a provision eliminating the personal liability of a
director to the Registrant or its stockholders for monetary damages for
breach of fiduciary duty as a director, subject to certain exceptions.
The Company maintains, at its expense, a policy of insurance which
insures its directors and officers, subject to certain exclusions and
deductions as are usual in such insurance policies, against certain
liabilities which may be incurred in those capacities.
Article IV of the Declaration of Trust for the Trusts limit the
liability to the Trusts and certain other persons and provides for the
indemnification by the Trusts or the Company of Trustees, the Officers,
other employees and certain other persons.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
EXHIBIT NO. DESCRIPTION PAGE NO.
1.1 Form of Underwriting Agreement (Standard Provisions)
for Debt Securities. (Incorporated by reference to
Exhibit 1.1 to the Company's Form S-3 Registration
Statement No. 333-45227)
1.2 Form of Underwriting Agreement (Standard Provisions)
for Common Stock. (Incorporated by reference to
Exhibit 1.2 to the Company's Form S-3 Registration
Statement No. 333-45227)
1.3 Form of Underwriting Agreement (Standard Provisions)
for Preferred Stock. (Incorporated by reference to
Exhibit 1.3 to the Company's Form S-3 Registration
Statement No. 333-45227)
3.1 Amended and Restated Certificate of Incorporation of
the Registrant (incorporated by reference to Exhibit 3.1
to the Registrant's Form 10-Q for the period ended April
30, 1996).
3.2 Form of Amended and Restated Certificate of Incorporation
of the Registrant as proposed to be amended (incorporated
by reference to Appendix B to the Joint Proxy Statement/
Prospectus included as part of the Registration Statement
on Form S-4 of the Registrant, Registration No. 333-34517).
3.3 Amended and Restated By-Laws of the Registrant (incorporated
by reference to Exhibit 3.2 to the Registrant's Registration
Statement, No. 33-44453, on Form S-4 dated December 19, 1991).
3.4 Form of Amended and Restated By-Laws of the Registrant
as proposed to be amended (incorporated by reference to
Appendix C of the Registrant's Proxy Statement/Prospectus
included as part of the Registration Statement of the
Registrant, Registration No. 333-34517).
4.1 Form of Certificate for the Company's Common Stock,
par value $.01 per share. (Incorporated by reference
to Exhibit 4.1 to the Company's Form S-3 Registration
Statement No. 333-45227)
4.2 Senior Indenture entered between the Company and
The Bank of Nova Scotia Trust Company of New York, as
Trustee. (Incorporated by reference to Exhibit 4.2 to
the Company's Form S-3 Registration Statement No.
333-45227)
4.3 Form of Subordinated Indenture between the
Company and The Bank of Nova Scotia Trust Company of
New York, as Trustee. (Incorporated by reference to
Exhibit 4.3 to the Company's Form S-3 Registration
Statement No. 333-45227)
4.4 Certificate of Trust of Cendant Capital II.
(Incorporated by reference to Exhibit 4.5 to the
Company's Form S-3 Registration Statement No.
333-45227)
4.5 Declaration of Trust of Cendant Capital II.
(Incorporated by reference to Exhibit 4.8 to the
Company's Form S-3 Registration Statement No.
333-45227)
4.6 Certificate of Trust of Cendant Capital III.
(Incorporated by reference to Exhibit 4.6 to the
Company's Form S-3 Registration Statement No. 333-45227)
4.7 Declaration of Trust of Cendant Capital III.
(Incorporated by reference to Exhibit 4.9 to the
Company's Form S-3 Registration Statement No.
333-45227)
4.8 Certificate of Trust of Cendant Capital IV.
4.9 Declaration of Trust of Cendant Capital IV.
4.10 Certificate of Trust of Cendant Capital V.
4.11 Declaration of Trust of Cendant Capital V.
4.12 Form of Amended and Restated Declaration of Trust of
Cendant Capital II, Cendant Capital III, Cendant
Capital IV, and Cendant Capital V.
4.13 Form of Preferred Securities Guarantee Agreement by
Cendant Corporation with respect to Cendant Capital
II, Cendant Capital III, Cendant Capital IV, and
Cendant Capital V.
4.14 Form of Purchase Contract Agreement between Cendant
Corporation and Bank One Trust Company, N.A., as
Purchase Contract Agent.
4.15 Form of Pledge Agreement among Cendant Corporation,
The Chase Manhattan Bank, as Collateral Agent, and
Bank One Trust Company, N.A., as Purchase Contract
Agent.*
4.16 Form of Supplemental Indenture among Cendant
Corporation and the Bank of Nova Scotia Trust Company
of New York as Indenture Trustee.*
4.17 Form of Senior Debenture (included as part of Exhibit
4.16).*
4.18 Form of Preferred Security Certificate (included as
part of Exhibit 4.12).
4.19 Form of Income PRIDES certificate (included as part of
Exhibit 4.14).
4.20 Form of Growth PRIDES certificate (included as part of
Exhibit 4.14).
5.1 Opinion of Eric J. Bock, Esq. regarding the legality
of the Securities being registered by the Company
hereby.
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
regarding the legality of the Securities being
registered by the Cendant Trusts hereby.
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
regarding tax matters.
12.1 Statement re: Computation of Earnings to Fixed Charges.
23.1 Consent of Deloitte & Touche LLP related to the
financial statements of Cendant Corporation.
23.2 Consent of KPMG LLP related to the financial
statements of PHH Corporation.
24.1 Power of Attorney.*
25.1 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of The Bank of Nova Scotia Trust
Company of New York, as Trustee for the Debentures.
25.2 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Trustee under the Preferred Securities of Cendant
Capital II.
25.3 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Trustee under the Preferred Securities Guarantee of
Cendant Capital II.
25.4 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Trustee under the Preferred Securities of Cendant
Capital III.
25.5 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Trustee under the Preferred Securities Guarantee of
Cendant Capital III.
25.6 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Trustee under the Preferred Securities of Cendant
Capital IV.
25.7 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Trustee under the Preferred Securities Guarantee of
Cendant Capital IV.
25.8 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Trustee under the Preferred Securities of Cendant
Capital V.
25.9 Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Trustee under the Preferred Securities Guarantee of
Cendant Capital V.
99.1 Form of Rights Agreement among Cendant Corporation and
Bank One Trust Company, N.A.
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) The Undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement, to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrants hereby undertake that, for purposes
of determining any liability under the Securities Act of 1933, each filing
of each such Registrant's annual report pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof;
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrants pursuant to the foregoing
provisions, or otherwise, the Registrants have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Registrants of expenses incurred or
paid by a director, officer or controlling person of such Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, such Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
(i) The undersigned Registrants hereby undertake that:
(1) For the purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains
a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cendant
Corporation certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement, to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on
October 13, 1999.
CENDANT CORPORATION
By:/s/James E. Buckman
-----------------------------
James E. Buckman
Vice Chairman
General Counsel and
Director
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
* Chairman of the Board, President, October 13, 1999
_____________________________ Chief Executive Officer and
Henry R. Silverman) Director
*
_____________________________ Vice Chairman, General Counsel and October 13, 1999
(James E. Buckman) Director
*
_____________________________ Vice Chairman and Director October 13, 1999
(Stephen P. Holmes)
*
_____________________________ Vice Chairman and Director October 13, 1999
(Michael P. Monaco)
* Senior Executive Vice President
_____________________________ and Chief Financial Officer October 13, 1999
(David M. Johnson) (Principal Financial
Officer)
/s/ Jon F. Danski
_____________________________
(Jon F. Danski) Executive Vice President and
Chief Accounting Officer October 13, 1999
(Principal Accounting Officer)
*
_____________________________ Director October 13, 1999
(Robert D. Kunisch)
* Director October 13, 1999
_____________________________
(John D. Snodgrass)
* Director October 13, 1999
_____________________________
(Leonard S. Coleman)
*
_____________________________ Director October 13, 1999
(Martin L. Edelman)
*
_____________________________ Director October 13, 1999
(Dr. Carole G. Hankin)
*
_____________________________ Director October 13, 1999
(The Rt. Hon. Brian Mulroney,
P.C., LL.D.)
*
_____________________________ Director October 13, 1999
(Robert W. Pittman)
*
_____________________________ Director October 13, 1999
(Leonard Schutzman)
*
_____________________________ Director October 13, 1999
(Robert F. Smith)
*
_____________________________ Director October 13, 1999
(Robert E. Nederlander)
*By:/s/ Eric J. Bock
_________________________
(Eric J. Bock)
attorney-in-fact
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cendant
Capital II certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and that it has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of
New York on October 13, 1999.
CENDANT CAPITAL II
By:/s/Michael P. Monaco
______________________________
Michael P. Monaco,
Trustee
By:/s/James E. Buckman
______________________________
James E. Buckman,
Trustee
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cendant
Capital III certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and that it has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of
New York on October 13, 1999.
CENDANT CAPITAL III
By:/s/Michael P. Monaco
_____________________________
Michael P. Monaco,
Trustee
By:/s/James E. Buckman
_____________________________
James E. Buckman,
Trustee
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cendant
Capital IV certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and that it has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of
New York on October 13, 1999.
CENDANT CAPITAL IV
By:/s/Michael P. Monaco
_____________________________
Michael P. Monaco,
Trustee
By:/s/James E. Buckman
_____________________________
James E. Buckman,
Trustee
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cendant
Capital V certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and that it has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York on
October 13, 1999.
CENDANT CAPITAL V
By:/s/Michael P. Monaco
_____________________________
Michael P. Monaco,
Trustee
By:/s/James E. Buckman
_____________________________
James E. Buckman,
Trustee
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- --------
1.1 Form of Underwriting Agreement (Standard
Provisions) for Debt Securities.
(Incorporated by reference to
Exhibit 1.1 to the Company's Form
S-3 Registration Statement No.
333-45227)
1.2 Form of Underwriting Agreement (Standard
Provisions) for Common Stock.
(Incorporated by reference to
Exhibit 1.2 to the Company's Form
S-3 Registration Statement No.
333-45227)
1.3 Form of Underwriting Agreement (Standard
Provisions) for Preferred Stock.
(Incorporated by reference to
Exhibit 1.3 to the Company's Form
S-3 Registration Statement No.
333-45227)
3.1 Amended and Restated Certificate of
Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1
to the Registrant's Form 10-Q for the
period ended April 30, 1996).
3.2 Form of Amended and Restated Certificate
of Incorporation of the Registrant
as proposed to be amended (incorporated
by reference to Appendix B to the Joint
Proxy Statement/Prospectus included as
part of the Registration Statement
on Form S-4 of the Registrant,
Registration No. 333-34517).
3.3 Amended and Restated By-Laws of the
Registrant (incorporated by reference to
Exhibit 3.2 to the Registrant's Registration
Statement, No. 33-44453, on Form S-4 dated
December 19, 1991).
3.4 Form of Amended and Restated By-Laws of the
Registrant as proposed to be amended
(incorporated by reference to Appendix C
of the Registrant's Proxy Statement/Prospectus
included as part of the Registration
Statement of the Registrant, Registration No.
333-34517).
4.1 Form of Certificate for the Company's
Common Stock, par value $.01 per
share. (Incorporated by reference to
Exhibit 4.1 to the Company's Form
S-3 Registration Statement No.
333-45227)
4.2 Senior Indenture entered between
the Company and The Bank of Nova
Scotia Trust Company of New York, as
Trustee. (Incorporated by reference
to Exhibit 4.2 to the Company's Form
S-3 Registration Statement No.
333-45227)
4.3 Form of Subordinated Indenture between
the Company and The Bank of
Nova Scotia Trust Company of New
York, as Trustee. (Incorporated by
reference to Exhibit 4.3 to the
Company's Form S-3 Registration
Statement No. 333-45227)
4.4 Certificate of Trust of Cendant
Capital II. (Incorporated by
reference to Exhibit 4.5 to the
Company's Form S-3 Registration
Statement No. 333-45227)
4.5 Declaration of Trust of Cendant
Capital II. (Incorporated by
reference to Exhibit 4.8 to the
Company's Form S-3 Registration
Statement No. 333-45227)
4.6 Certificate of Trust of Cendant
Capital III. (Incorporated by
reference to Exhibit 4.6 to the
Company's Form S-3 Registration
Statement No. 333-45227)
4.7 Declaration of Trust of Cendant
Capital III. (Incorporated by
reference to Exhibit 4.9 to the
Company's Form S-3 Registration
Statement No. 333-45227)
4.8 Certificate of Trust of Cendant Capital IV.
4.9 Declaration of Trust of Cendant Capital IV.
4.10 Certificate of Trust of Cendant Capital V.
4.11 Declaration of Trust of Cendant Capital V.
4.12 Form of Amended and Restated Declaration
of Trust of Cendant Capital II,
Cendant Capital III, Cendant Capital
IV, and Cendant Capital V.
4.13 Form of Preferred Securities Guarantee
Agreement by Cendant Corporation
with respect to Cendant Capital II,
Cendant Capital III, Cendant Capital
IV, and Cendant Capital V.
4.14 Form of Purchase Contract Agreement
between Cendant Corporation and Bank
One Trust Company, N.A., as Purchase
Contract Agent.
4.15 Form of Pledge Agreement among Cendant
Corporation, The Chase Manhattan
Bank, as Collateral Agent, and Bank
One Trust Company, N.A., as Purchase
Contract Agent.*
4.16 Form of Supplemental Indenture among
Cendant Corporation and the Bank of
Nova Scotia Trust Company of New
York as Indenture Trustee.*
4.17 Form of Senior Debenture (included as
part of Exhibit 4.16).*
4.18 Form of Preferred Security Certificate
(included as part of Exhibit 4.12).
4.19 Form of Income PRIDES certificate
(included as part of Exhibit 4.14).
4.20 Form of Growth PRIDES certificate
(included as part of Exhibit 4.14).
5.1 Opinion of Eric J. Bock, Esq. regarding
the legality of the Securities being
registered by the Company hereby.
5.2 Opinion of Skadden, Arps, Slate,
Meagher & Flom LLP regarding the
legality of the Securities being
registered by the Cendant Trusts
hereby.
8.1 Opinion of Skadden, Arps, Slate,
Meagher & Flom LLP regarding tax
matters.
12.1 Statement re: Computation of Earnings
to Fixed Charges.
23.1 Consent of Deloitte & Touche LLP
related to the financial statements
of Cendant Corporation.
23.2 Consent of KPMG LLP related to the
financial statements of PHH
Corporation.
24.1 Power of Attorney.*
25.1 Form T-1 Statement of Eligibility under
the Trust Indenture Act of 1939 of
The Bank of Nova Scotia Trust
Company of New York, as Trustee for
the Debentures.
25.2 Form T-1 Statement of Eligibility under
the Trust Indenture Act of 1939 of
Wilmington Trust Company, as Trustee
under the Preferred Securities of
Cendant Capital II.
25.3 Form T-1 Statement of Eligibility under
the Trust Indenture Act of 1939 of
Wilmington Trust Company, as Trustee
under the Preferred Securities
Guarantee of Cendant Capital II.
25.4 Form T-1 Statement of Eligibility under
the Trust Indenture Act of 1939 of
Wilmington Trust Company, as Trustee
under the Preferred Securities of
Cendant Capital III.
25.5 Form T-1 Statement of Eligibility under
the Trust Indenture Act of 1939 of
Wilmington Trust Company, as Trustee
under the Preferred Securities
Guarantee of Cendant Capital III.
25.6 Form T-1 Statement of Eligibility under
the Trust Indenture Act of 1939 of
Wilmington Trust Company, as Trustee
under the Preferred Securities of
Cendant Capital IV.
25.7 Form T-1 Statement of Eligibility
under the Trust Indenture Act of
1939 of Wilmington Trust Company, as
Trustee under the Preferred
Securities Guarantee of Cendant
Capital IV.
25.8 Form T-1 Statement of Eligibility
under the Trust Indenture Act of
1939 of Wilmington Trust Company, as
Trustee under the Preferred
Securities of Cendant Capital V.
25.9 Form T-1 Statement of Eligibility
under the Trust Indenture Act of
1939 of Wilmington Trust Company, as
Trustee under the Preferred
Securities Guarantee of Cendant
Capital V.
99.1 Form of Rights Agreement among Cendant
Corporation and Bank One Trust
Company, N.A.
* Previously filed.
CERTIFICATE OF TRUST
The undersigned, the trustees of Cendant Capital IV, desiring to form
a business trust pursuant to Delaware Business Trust Act, 12 Del. C.
section 3810, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust")
is "Cendant Capital IV."
2. The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
IN WITNESS WHEREOF, the undersigned have executed this
Certificate of Trust as of the date written below.
/s/ Michael P. Monaco
- ---------------------------- WILMINGTON TRUST COMPANY
Name: Michael P. Monaco Not in its individual capacity,
Title: Trustee but solely as Trustee.
/s/ James E. Buckman By: /s/ Joseph B. Feil
--------------------------- -------------------------------
Name: James E. Buckman Name: Joseph B. Feil
Title: Trustee Title:
Dated: August 20, 1999
================================
DECLARATION OF TRUST
Dated as of August 20, 1999
================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Office . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Purpose . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 Authority . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5 Title to Property of the Trust . . . . . . . . . . 4
SECTION 2.6 Powers of the Trustees . . . . . . . . . . . . . . 4
SECTION 2.7 Filing of Certificate of Trust . . . . . . . . . . 6
SECTION 2.8 Duration of Trust. . . . . . . . . . . . . . . . . 6
SECTION 2.9 Responsibilities of the Sponsor . . . . . . . . . 6
Section 2.10 Declaration Binding on Securities Holders . . . . 7
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3 Delaware Trustee . . . . . . . . . . . . . . . . . 8
SECTION 3.4 Institutional Trustee.
Section 3.5 Not Responsible for Recitals or Sufficiency of
Declaration. . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation . . . . . . . . . . . . . . . . . . . 9
SECTION 4.2 Fiduciary Duty . . . . . . . . . . . . . . . . . . 9
SECTION 4.3 Indemnification . . . . . . . . . . . . . . . . . 10
SECTION 4.4 Outside Businesses . . . . . . . . . . . . . . . . 13
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.2 Termination of Trust . . . . . . . . . . . . . . . 14
SECTION 5.3 Governing Law . . . . . . . . . . . . . . . . . . 15
SECTION 5.4 Headings . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.5 Successors and Assigns . . . . . . . . . . . . . . 16
SECTION 5.6 Partial Enforceability . . . . . . . . . . . . . . 16
SECTION 5.7 Counterparts . . . . . . . . . . . . . . . . . . . 16
DECLARATION OF TRUST
OF
Cendant Capital IV
DECLARATION OF TRUST ("Declaration") dated August 20, 1999 and
effective as of August 31, 1999 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"),
Cendant Corporation, a Delaware corporation, as trust sponsor (the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust
(the "Trust") pursuant to the Delaware Business Trust Act 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 hereinafter
defined); and
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute 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.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections are
to Articles and Sections of this Declaration unless otherwise
specified; and
(e) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York or Wilmington, Delaware are authorized
or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code section3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security denominated as such and
representing an undivided beneficial interest in the assets of the Trust
with such terms as may be set out in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Regular Trustee; (b)
any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of
any Regular Trustee; or (d) any employee or agent of the Trust or its
Affiliates.
"Covered Person" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii)
the Trust's Affiliates and (b) any holder of Securities.
"Debenture Issuer" means Cendant Corporation in its capacity as
the issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer and acquired by the Trust.
"Debenture Trustee" means The Bank of Nova Scotia Trust Company
of New York, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).
"Holder" means the person in whose name a certificate
representing a Security is registered.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the indenture dated as of February 24, 1998, among
Debenture Issuer and the Debenture Trustee and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"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 Security" means a security denominated as such and
representing an undivided beneficial interest in the assets of the Trust
with such terms as may be set out in any amendment to this Declaration.
"Regular Trustee" has the meaning set forth in Section 3.1.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means Cendant Corporation in its capacity as sponsor of
the Trust.
"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.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Cendant Capital
IV." The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o Cendant
Corporation, 6 Sylvan Way, Parsippany, New Jersey 07054. At any time, the
Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire
the Debentures, and (b) except as otherwise limited herein, to engage in
only those other activities necessary, or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to
be undertaken) any activity that would cause the Trust not to be classified
for United States federal income tax purposes as a grantor trust.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Regular Trustees in
accordance with their powers shall constitute the act of and serve to bind
the Trust. In dealing with the Regular Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the
Regular Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Regular
Trustees as set forth in this Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
SECTION 2.6 Powers of the Trustees.
The Regular Trustees shall have the exclusive power 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 the Securities shall be
limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a registration
statement 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 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 New York Stock Exchange or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared
by the Sponsor relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into an underwriting agreement and
pricing agreement providing for the sale of the Preferred
Securities;
(c) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors,
advisors, and consultants and provide for reasonable compensation for
such services;
(d) to incur expenses which are necessary or incidental to carry
out any of the purposes of this Declaration; and
(e) 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.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust
in the form attached hereto as Exhibit A with the Secretary of State of the
State of Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.
SECTION 2.9 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 for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States 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;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any 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
class of Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and
pricing agreement providing for the sale of the Preferred Securities.
Section 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a Holder of a Security or
any interest therein in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be three (3), and
thereafter the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the Sponsor. The
Sponsor is entitled to appoint or remove without cause any Trustee at any
time; provided, however, that the number of Trustees shall in no event be
less than two (2); provided further that one Trustee, in the case of a
natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its
principal place of business in the State of Delaware (the "Delaware
Trustee"); provided further that there shall be at least one trustee who is
an employee or officer of, or is affiliated with the Sponsor (each, a
"Regular Trustee").
SECTION 3.2 Regular Trustees.
The initial Regular Trustees shall be:
Michael P. Monaco
James E. Buckman
(a) Except as expressly set forth in this Declaration, any power
of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 2.6 provided, that, the registration statement referred
to in Section 2.6(b)(i), including any amendments thereto, shall be signed
by a majority of the Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Regular
Trustees have power and authority to cause the Trust to execute pursuant to
Section 2.6.
SECTION 3.3 Delaware Trustee.
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North,
1100 North Market Street,
Wilmington, Delaware 19890
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees described in this Declaration. 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. Notwithstanding
anything herein to the contrary, the Delaware Trustee shall not be liable
for the acts or omissions to act of the Trust, of the Sponsor or of the
Regular Trustees except that such limitation shall not limit the liability,
if any, of the Delaware Trustee to a holder for acts that the Delaware
Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act or for the gross negligence or
willful misconduct of the Delaware Trustee. The Delaware Trustee may, at
any time resign as Trustee hereunder upon 30 days' prior written notice of
such resignation to the Sponsor. Upon its receipt of such notice of
resignation, the Sponsor promptly shall appoint a successor Delaware
Trustee (each, a "Successor Trustee") and such resignation shall take
effect when the Successor Trustee accepts in writing the Successor
Trustee's appointment as successor Delaware Trustee. If within such 30-day
period, the Sponsor has failed to take appropriate steps to appoint a
successor Trustee, the Delaware Trustee may, but shall not be required to,
petition any court of competent jurisdiction for the appointment of a
Successor Trustee. Such court may thereupon appoint a Successor Trustee
after such notice to the Sponsor as such court may deem proper and
prescribe. The resignation of the Delaware Trustee shall not be deemed to
constitute bad faith for the purposes of Section 4.2 (b) hereof.
SECTION 3.4 Institutional Trustee.
Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint a trustee (the "Institutional
Trustee") meeting the requirements of an eligible trustee of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the
Institutional Trustee and the Delaware Trustee.
Section 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration 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.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by
this Declaration or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's gross negligence or willful misconduct with respect to
such acts or omissions; and
(b) an Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who if selected by such
Indemnified Person has been selected with reasonable care, 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 4.2 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, 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 Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that are,
fair and reasonable to the Trust or any holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified Person at law or in
equity or otherwise; and
(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 4.3 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or
in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 4.3(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 4.3(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 4.3(a) shall be paid by the Debenture Issuer
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Debenture
Issuer as authorized in this Section 4.3(a). Notwithstanding the
foregoing, no advance shall be made by the Debenture Issuer if a
determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular
Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs,
by independent legal counsel in a written opinion or (iii) the Common
Security Holder of the Trust, that, based upon the facts known to the
Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in
bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the Trust, or, with respect to
any criminal proceeding, that such Company Indemnified Person believed
or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular
Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty
to the Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 4.3(a)
shall not be deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested directors
of the Debenture Issuer or Preferred Security Holders of the Trust or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. All rights to
indemnification under this Section 4.3(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this
Section 4.3(a) is in effect. Any repeal or modification of this
Section 4.3(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 4.3(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 4.3(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a Company Indemnified Person and shall inure to the
benefit of the heirs, executors and administrators of such a person.
(b)(i) The Debenture Issuer agrees to indemnify the (1) the
Delaware Trustee, (2) any Affiliate, to the full extent permitted by law,
of the Delaware Trustee, and (3) any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or
agents of the Delaware Trustee (each of the Persons in (1) through (3)
being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without gross negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust
or trusts hereunder, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against, or investigating, any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. (ii) To the fullest extent permitted by
applicable law, expenses (including reasonable and documented legal fees)
incurred by a Fiduciary 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
undertaking by or on behalf of the Fiduciary 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 4.3 (b) (i). (iii) The
obligation to indemnify and advance expenses as set forth in this Section
4.3(b) shall survive the termination of this Declaration and shall survive
the resignation or removal of the Delaware Trustee.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware Trustee may
engage in or possess an interest in other business ventures of any nature
or description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent
ventures or the income or profits derived therefrom and the pursuit of any
such venture, even if competitive with the business of the Trust, shall not
be deemed wrongful or improper. No Covered Person, the Sponsor or the
Delaware 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 and the Delaware 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 and the Delaware 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 may act on
any committee or body of holders of, securities or other obligations of the
Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Regular Trustees and the Sponsor; provided, however, if the amendment
affects the rights, powers, duties, obligations or immunities of the
Delaware Trustee, the amendment shall not be effective unless approved in
writing by the Delaware Trustee.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force or
effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Sponsor or the revocation of
the Sponsor's charter or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution
of the Sponsor, or the Trust; and
(iv) before the issue of any Securities, with the consent
of all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable upon completion of winding up by
the Trustees after the occurrence of an event referred to in Section
5.2(a), the Trustees shall file a certificate of cancellation with the
Secretary of State of the State of Delaware.
SECTION 5.3 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to
be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 5.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to
persons or circumstances other than those to which it is held invalid,
shall not be affected thereby.
SECTION 5.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature
pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused this Declaration
of Trust of Cendant Capital IV to be executed as of the day and year first
above written.
/s/ Michael P. Monaco
-------------------------------------
Name: Michael P. Monaco
Title: Regular Trustee
/s/ James E. Buckman
-------------------------------------
Name: James E. Buckman
Title: Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ Joseph B. Feil
----------------------------------
Name: Joseph B. Feil
Title:
CENDANT CORPORATION, as Sponsor and
Debenture Issuer
By: /s/ Michael P. Monaco
---------------------------------
Name: Michael P. Monaco
Title: Vice Chairman and
Chief Executive Officer
CERTIFICATE OF TRUST
The undersigned, the trustees of Cendant Capital V, desiring to form a
business trust pursuant to Delaware Business Trust Act, 12 Del. C.
section 3810, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust")
is "Cendant Capital V."
2. The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
IN WITNESS WHEREOF, the undersigned have executed this
Certificate of Trust as of the date written below.
/s/ Michael P. Monaco
---------------------------- WILMINGTON TRUST COMPANY
Name: Michael P. Monaco Not in its individual capacity,
Title: Trustee but solely as Trustee.
/s/ James E. Buckman By: /s/ Joseph B. Feil
---------------------------- ------------------------------
Name: James E. Buckman Name: Joseph B. Feil
Title: Trustee Title:
Dated: August 20, 1999
================================
DECLARATION OF TRUST
Dated as of August 20, 1999
================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Office . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Purpose . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 Authority . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5 Title to Property of the Trust . . . . . . . . . . 4
SECTION 2.6 Powers of the Trustees . . . . . . . . . . . . . . 4
SECTION 2.7 Filing of Certificate of Trust . . . . . . . . . . 6
SECTION 2.8 Duration of Trust. . . . . . . . . . . . . . . . . 6
SECTION 2.9 Responsibilities of the Sponsor . . . . . . . . . 6
Section 2.10 Declaration Binding on Securities Holders . . . . 7
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3 Delaware Trustee . . . . . . . . . . . . . . . . . 8
SECTION 3.4 Institutional Trustee.
Section 3.5 Not Responsible for Recitals or Sufficiency of
Declaration. . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation . . . . . . . . . . . . . . . . . . . 9
SECTION 4.2 Fiduciary Duty . . . . . . . . . . . . . . . . . . 9
SECTION 4.3 Indemnification . . . . . . . . . . . . . . . . . 10
SECTION 4.4 Outside Businesses . . . . . . . . . . . . . . . . 13
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.2 Termination of Trust . . . . . . . . . . . . . . . 14
SECTION 5.3 Governing Law . . . . . . . . . . . . . . . . . . 15
SECTION 5.4 Headings . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.5 Successors and Assigns . . . . . . . . . . . . . . 16
SECTION 5.6 Partial Enforceability . . . . . . . . . . . . . . 16
SECTION 5.7 Counterparts . . . . . . . . . . . . . . . . . . . 16
DECLARATION OF TRUST
OF
Cendant Capital V
DECLARATION OF TRUST ("Declaration") dated August 20, 1999 and
effective as of August 31, 1999 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"),
Cendant Corporation, a Delaware corporation, as trust sponsor (the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust
(the "Trust") pursuant to the Delaware Business Trust Act 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 hereinafter
defined); and
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute 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.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections are
to Articles and Sections of this Declaration unless otherwise
specified; and
(e) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York or Wilmington, Delaware are authorized
or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code section3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security denominated as such and
representing an undivided beneficial interest in the assets of the Trust
with such terms as may be set out in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Regular Trustee; (b)
any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of
any Regular Trustee; or (d) any employee or agent of the Trust or its
Affiliates.
"Covered Person" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii)
the Trust's Affiliates and (b) any holder of Securities.
"Debenture Issuer" means Cendant Corporation in its capacity as
the issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer and acquired by the Trust.
"Debenture Trustee" means The Bank of Nova Scotia Trust Company
of New York, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).
"Holder" means the person in whose name a certificate
representing a Security is registered.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the indenture dated as of February 24,1998, among
Debenture Issuer and the Debenture Trustee and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"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 Security" means a security denominated as such and
representing an undivided beneficial interest in the assets of the Trust
with such terms as may be set out in any amendment to this Declaration.
"Regular Trustee" has the meaning set forth in Section 3.1.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means Cendant Corporation in its capacity as sponsor of
the Trust.
"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.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Cendant Capital
V." The Trust's activities may be conducted under the name of the Trust or
any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o Cendant
Corporation, 6 Sylvan Way, Parsippany, New Jersey 07054. At any time, the
Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire
the Debentures, and (b) except as otherwise limited herein, to engage in
only those other activities necessary, or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to
be undertaken) any activity that would cause the Trust not to be classified
for United States federal income tax purposes as a grantor trust.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Regular Trustees in
accordance with their powers shall constitute the act of and serve to bind
the Trust. In dealing with the Regular Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the
Regular Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Regular
Trustees as set forth in this Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
SECTION 2.6 Powers of the Trustees.
The Regular Trustees shall have the exclusive power 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 the Securities shall be
limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a registration
statement 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 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 New York Stock Exchange or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared
by the Sponsor relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into an underwriting agreement and
pricing agreement providing for the sale of the Preferred
Securities;
(c) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors,
advisors, and consultants and provide for reasonable compensation for
such services;
(d) to incur expenses which are necessary or incidental to carry
out any of the purposes of this Declaration; and
(e) 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.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust
in the form attached hereto as Exhibit A with the Secretary of State of the
State of Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.
SECTION 2.9 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 for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States 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;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any 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
class of Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and
pricing agreement providing for the sale of the Preferred Securities.
Section 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a Holder of a Security or
any interest therein in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be three (3), and
thereafter the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the Sponsor. The
Sponsor is entitled to appoint or remove without cause any Trustee at any
time; provided, however, that the number of Trustees shall in no event be
less than two (2); provided further that one Trustee, in the case of a
natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its
principal place of business in the State of Delaware (the "Delaware
Trustee"); provided further that there shall be at least one trustee who is
an employee or officer of, or is affiliated with the Sponsor (each, a
"Regular Trustee").
SECTION 3.2 Regular Trustees.
The initial Regular Trustees shall be:
Michael P. Monaco
James E. Buckman
(a) Except as expressly set forth in this Declaration, any power
of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 2.6 provided, that, the registration statement referred
to in Section 2.6(b)(i), including any amendments thereto, shall be signed
by a majority of the Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Regular
Trustees have power and authority to cause the Trust to execute pursuant to
Section 2.6.
SECTION 3.3 Delaware Trustee.
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North,
1100 North Market Street,
Wilmington, Delaware 19890
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees described in this Declaration. 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. Notwithstanding
anything herein to the contrary, the Delaware Trustee shall not be liable
for the acts or omissions to act of the Trust, of the Sponsor or of the
Regular Trustees except that such limitation shall not limit the liability,
if any, of the Delaware Trustee to a holder for acts that the Delaware
Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act or for the gross negligence or
willful misconduct of the Delaware Trustee. The Delaware Trustee may, at
any time resign as Trustee hereunder upon 30 days' prior written notice of
such resignation to the Sponsor. Upon its receipt of such notice of
resignation, the Sponsor promptly shall appoint a successor Delaware
Trustee (each, a "Successor Trustee") and such resignation shall take
effect when the Successor Trustee accepts in writing the Successor
Trustee's appointment as successor Delaware Trustee. If within such 30-day
period, the Sponsor has failed to take appropriate steps to appoint a
successor Trustee, the Delaware Trustee may, but shall not be required to,
petition any court of competent jurisdiction for the appointment of a
Successor Trustee. Such court may thereupon appoint a Successor Trustee
after such notice to the Sponsor as such court may deem proper and
prescribe. The resignation of the Delaware Trustee shall not be deemed to
constitute bad faith for the purposes of Section 4.2 (b) hereof.
SECTION 3.4 Institutional Trustee.
Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint a trustee (the "Institutional
Trustee") meeting the requirements of an eligible trustee of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the
Institutional Trustee and the Delaware Trustee.
Section 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration 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.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by
this Declaration or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's gross negligence or willful misconduct with respect to
such acts or omissions; and
(b) an Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who if selected by such
Indemnified Person has been selected with reasonable care, 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 4.2 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, 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 Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that are,
fair and reasonable to the Trust or any holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified Person at law or in
equity or otherwise; and
(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 4.3 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or
in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 4.3(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 4.3(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 4.3(a) shall be paid by the Debenture Issuer
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Debenture
Issuer as authorized in this Section 4.3(a). Notwithstanding the
foregoing, no advance shall be made by the Debenture Issuer if a
determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular
Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs,
by independent legal counsel in a written opinion or (iii) the Common
Security Holder of the Trust, that, based upon the facts known to the
Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in
bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the Trust, or, with respect to
any criminal proceeding, that such Company Indemnified Person believed
or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular
Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty
to the Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section 4.3(a)
shall not be deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested directors
of the Debenture Issuer or Preferred Security Holders of the Trust or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. All rights to
indemnification under this Section 4.3(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this
Section 4.3(a) is in effect. Any repeal or modification of this
Section 4.3(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 4.3(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 4.3(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a Company Indemnified Person and shall inure to the
benefit of the heirs, executors and administrators of such a person.
(b)(i) The Debenture Issuer agrees to indemnify the (1) the
Delaware Trustee, (2) any Affiliate, to the full extent permitted by law,
of the Delaware Trustee, and (3) any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or
agents of the Delaware Trustee (each of the Persons in (1) through (3)
being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without gross negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust
or trusts hereunder, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against, or investigating, any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. (ii) To the fullest extent permitted by
applicable law, expenses (including reasonable and documented legal fees)
incurred by a Fiduciary 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
undertaking by or on behalf of the Fiduciary 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 4.3 (b) (i). (iii) The
obligation to indemnify and advance expenses as set forth in this Section
4.3(b) shall survive the termination of this Declaration and shall survive
the resignation or removal of the Delaware Trustee.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware Trustee may
engage in or possess an interest in other business ventures of any nature
or description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent
ventures or the income or profits derived therefrom and the pursuit of any
such venture, even if competitive with the business of the Trust, shall not
be deemed wrongful or improper. No Covered Person, the Sponsor or the
Delaware 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 and the Delaware 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 and the Delaware 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 may act on
any committee or body of holders of, securities or other obligations of the
Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Regular Trustees and the Sponsor; provided, however, if the amendment
affects the rights, powers, duties, obligations or immunities of the
Delaware Trustee, the amendment shall not be effective unless approved in
writing by the Delaware Trustee.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force or
effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Sponsor or the revocation of
the Sponsor's charter or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution
of the Sponsor, or the Trust; and
(iv) before the issue of any Securities, with the consent
of all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable upon completion of winding up by
the Trustees after the occurrence of an event referred to in Section
5.2(a), the Trustees shall file a certificate of cancellation with the
Secretary of State of the State of Delaware.
SECTION 5.3 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to
be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 5.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to
persons or circumstances other than those to which it is held invalid,
shall not be affected thereby.
SECTION 5.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature
pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused this Declaration
of Trust of Cendant Capital V to be executed as of the day and year first
above written.
/s/ Michael P. Monaco
-----------------------------------
Name: Michael P. Monaco
Title: Regular Trustee
/s/ James E. Buckman
-----------------------------------
Name: James E. Buckman
Title: Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ Joseph B. Feil
--------------------------------
Name: Joseph B. Feil
Title:
CENDANT CORPORATION, as Sponsor and
Debenture Issuer
By: /s/ Michael P. Monaco
--------------------------------
Name: Michael P. Monaco
Title: Vice Chairman and
Chief Executive Officer
Exhibit 4.12
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
Cendant Capital II, Cendant Capital III,
Cendant Capital IV and Cendant Capital V
Dated as of [ ]
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1
DEFINITIONS...............................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.............................9
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES...............................9
SECTION 2.3 REPORTS BY THE INSTITUTIONAL TRUSTEE........................10
SECTION 2.4 PERIODIC REPORTS TO INSTITUTIONAL TRUSTEE...................10
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT............10
SECTION 2.6 EVENTS OF DEFAULT; WAIVER...................................10
SECTION 2.7 EVENT OF DEFAULT; NOTICE....................................12
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.........................................................12
SECTION 3.2 OFFICE.......................................................12
SECTION 3.3 PURPOSE......................................................12
SECTION 3.4 AUTHORITY....................................................13
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST...............................13
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES....................13
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.........16
SECTION 3.8 POWERS AND DUTIES OF THE INSTITUTIONAL TRUSTEE...............16
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE INSTITUTIONAL
TRUSTEE......................................................18
SECTION 3.10 CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE......................20
SECTION 3.11 DELAWARE TRUSTEE.............................................22
SECTION 3.12 EXECUTION OF DOCUMENTS.......................................22
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.......22
SECTION 3.14 DURATION OF TRUST............................................22
SECTION 3.15 MERGERS......................................................22
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES......................24
SECTION 4.2 RIGHTS AND RESPONSIBILITIES OF THE SPONSOR...................24
SECTION 4.3 RIGHT TO PROCEED.............................................24
SECTION 4.4 EXPENSES.....................................................25
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES...........................................25
SECTION 5.2 DELAWARE TRUSTEE.............................................26
SECTION 5.3 INSTITUTIONAL TRUSTEE; ELIGIBILITY...........................26
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE
TRUSTEE GENERALLY............................................27
SECTION 5.5 REGULAR TRUSTEES.............................................27
SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.............28
SECTION 5.7 VACANCIES AMONG TRUSTEES.....................................29
SECTION 5.8 EFFECT OF VACANCIES..........................................29
SECTION 5.9 MEETINGS.....................................................29
SECTION 5.10 DELEGATION OF POWER..........................................30
SECTION 5.11 MERGER, CONVERSION. CONSOLIDATION OR SUCCESSION
TO BUSINESS..................................................30
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS................................................30
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES......................31
SECTION 7.2 PAYING AGENT.................................................31
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST.........................................32
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES.......................................33
SECTION 9.2 TRANSFER OF CERTIFICATES.....................................33
SECTION 9.3 DEEMED SECURITYHOLDERS.......................................33
SECTION 9.4 BOOK ENTRY INTERESTS.........................................34
SECTION 9.5 NOTICES TO CLEARING AGENCY...................................34
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.....................35
SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES...................35
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES............35
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS
OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY....................................................36
SECTION 10.2 EXCULPATION..................................................36
SECTION 10.3 FIDUCIARY DUTY...............................................37
SECTION 10.4 INDEMNIFICATION..............................................37
SECTION 10.5 OUTSIDE BUSINESSES...........................................40
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR..................................................40
SECTION 11.2 CERTAIN ACCOUNTING MATTERS...................................40
SECTION 11.3 BANKING......................................................41
SECTION 11.4 WITHHOLDING..................................................41
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS...................................................41
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY
WRITTEN CONSENT..............................................43
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL
TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF INSTITUTIONAL
TRUSTEE......................................................44
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE...........45
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES......................................................46
SECTION 14.2 GOVERNING LAW................................................47
SECTION 14.3 INTENTION OF THE PARTIES.....................................47
SECTION 14.4 HEADINGS.....................................................47
SECTION 14.5 SUCCESSORS AND ASSIGNS.......................................47
SECTION 14.6 PARTIAL ENFORCEABILITY.......................................47
SECTION 14.7 COUNTERPARTS.................................................47
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
Cendant Capital II, Cendant Capital III,
Cendant Capital IV and Cendant Capital V
[ DATE ]
AMENDED AND RESTATED DECLARATION OF TRUST (the "Declaration")
dated and effective as of [ ] by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the Holders (as defined herein), from
time to time, of the securities representing undivided beneficial interests
in the assets of the Trust to be issued pursuant to this Declaration;
WHEREAS,[ ] (the "Original Delaware Trustee"), [ ], as trustees,
and the Sponsor established Cendant Capital II, Cendant Capital III,
Cendant Capital IV and Cendant Capital V (the "Trust"), a trust under the
Business Trust Act (as defined herein) pursuant to a Declaration of Trust
dated as of [DATE] (the "Original Declaration") and a Certificate of Trust
filed with the Secretary of State of the State of Delaware on [DATE] 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 defined
herein);
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 Trust and Holders, from time to
time, of the securities representing undivided beneficial interests in the
assets of the Trust issued hereunder, subject to the provisions of this
Declaration.
ARTICLE II
INTERPRETATION AND DEFINITIONS
SECTION 2.1 DEFINITIONS
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
"Applicable Ownership Interest" has the meaning set
forth in Annex I hereto.
"Applicable Principal Amount" has the meaning set
forth in Annex I hereto.
"Authorized Newspaper" means a daily newspaper, in the
English language, customarily published on each day that is a Business Day
in The City of New York, whether or not published on days that are Legal
Holidays, and of general circulation in The City of New York. The
Authorized Newspaper for the Purposes of the Reset Spread Announcement
Date, is currently anticipated to be The Wall Street Journal.
"Authorized Officer" of a Person means any Person
that is authorized to bind such Person.
"Book Entry Interest" means a beneficial interest in a
Global Certificate, ownership and transfers of which shall be maintained
and made through book entries by a Clearing Agency as described in Section
9.4.
"Business Day" means any day other than Saturday, Sunday
or any day on which banking institutions in New York City, in the State of
New York, are permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as it may be amended from
time to time, or any successor legislation.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is
acting as depositary for the Preferred Securities and in whose name or in
the name of a nominee of that organization shall be registered a Global
Certificate and which shall undertake to effect book entry transfers and
pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from time to
time the Clearing Agency effects book entry transfers and pledges of
securities deposited with the Clearing Agency.
"Closing Date" means the "Closing Time" and each "Date of
Delivery" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor legislation.
"Commission" means the Securities and Exchange
Commission.
"Common Security" has the meaning specified in
Section 7.1.
"Common Securities Guarantee" means the guarantee
agreement to be dated as of [ ] of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive
certificate in fully registered form representing a Common Security
substantially in the form of Exhibit A-2.
"Company Indemnified Person" means (a) any Regular
Trustee; (b) any Affiliate of any Regular Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or
agents of any Regular Trustee; or (d) any officer, employee or agent of the
Trust or its Affiliates.
"Corporate Trust Office" means the office of the
Institutional Trustee at which the corporate trust business of the
Institutional Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Declaration is
located at
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the
Trust or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Cendant Corporation, a Delaware
corporation, in its capacity as issuer of the Debentures under the
Indenture.
"Debenture Trustee" means [ ], as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Debentures" means the series of ____% Subordinated
Debentures to be issued by the Debenture Issuer under the Indenture, a
specimen certificate for such series of Debentures being Exhibit B.
"Debenture Repayment Price" means, with respect to any
Debentures put to the Sponsor on [ ], an amount per Debenture equal to $[
], plus accumulated and unpaid interest (including deferred interest, if
any). "Definitive Preferred Security Certificates" has the meaning set
forth in Section 9.4.
"Delaware Trustee" has the meaning set forth in
Section 5.2.
"Direction" by a Person means a written direction
signed:
(a) if the Person is a natural person, by that
Person; or
(b) in any other case, in the name of such Person by one
or more Authorized Officers of that Person.
"Direct Action" has the meaning specified in Section
3.8(e).
"Distribution" means a distribution payable to
Holders of Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" in respect of the Securities means an
Event of Default (as defined in the Indenture) has occurred and is
continuing in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, or any successor legislation.
"Failed Remarketing" has the meaning specified in Section
5.4(b) of the Purchase Contract Agreement.
"Fiduciary Indemnified Person" has the meaning set forth
in Section 10.4(b).
"Global Certificate" has the meaning set forth in Section
9.4.
"Holder" or "holder" means a Person in whose name a
Certificate representing a Security is registered, such Person being a
beneficial owner within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person
or a Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of [DATE], among
the Debenture Issuer and the Debenture Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" means the Trustee meeting the
eligibility requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth
in Section 3.8(c).
"Investment Company" means an investment company as
defined in the Investment Company Act.
"Investment Company Act" means the Investment Company Act
of 1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I hereto.
"Legal Action" has the meaning set forth in Section
3.6(g).
"Majority in liquidation amount of the Securities" means,
except as provided in the terms and conditions of the Preferred Securities
set forth in Annex I hereto or by the Trust Indenture Act, Holder(s) of
outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities 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.
"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 the officers signing the Officers'
Certificate have read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by the officer in rendering the Officers'
Certificate;
(c) a statement that such officers have made such examination or
investigation as, in such officers' opinion, is necessary to enable such
officers 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 such officers,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section
7.2.
"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.
"Pledge Agreement" means the Pledge Agreement dated as of
[ ] among the Sponsor, [ ], as collateral agent (the "Collateral Agent"),
and Wilmington Trust Company, as purchase contract agent (the "Purchase
Contract Agent").
"Preferred Securities Guarantee" means the guarantee
agreement to be dated as of [DATE] of the Sponsor in respect of the
Preferred Securities.
"Preferred Security" has the meaning specified in
Section 7.1.
"Preferred Security Beneficial Owner" means, with respect
to a Book Entry Interest, a Person who is the beneficial owner of such Book
Entry Interest, as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between
the Trust, the Debenture Issuer, and the underwriters designated by the
Regular Trustees with respect to the offer and sale of the Preferred
Securities.
"Primary Treasury Dealer" has the meaning set forth
in Annex I hereto.
"Purchase Contract Agreement" means the Purchase Contract
Agreement dated as of [ ] among Wilmington Trust Company, as Purchase
Contract Agent, and the Sponsor.
"Purchase Contract Settlement Date" means [
].
"Put Option" has the meaning set forth in Annex I
hereto.
"Quorum" means a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them.
"Quotation Agent" has the meaning set forth in Annex
I hereto.
"Redemption Amount" has the meaning set forth in
Annex I hereto.
"Redemption Price" has the meaning set forth in Annex
I hereto.
"Regular Trustee" has the meaning set forth in
Section 5.1.
"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.
"Reset Agent" means a nationally recognized investment
banking firm chosen by the Sponsor to determine the Reset Rate. It is
currently anticipated that Merrill Lynch & Co. will act in such capacity.
"Reset Announcement Date" means the tenth (10) Business
Day immediately preceding the Purchase Contract Settlement Date.
"Reset Rate" means the distribution rate per annum (to be
determined by the Reset Agent), equal to the sum of (X) the Reset Spread
and (Y) the rate of interest on the Two-Year Benchmark Treasury in effect
on the third Business Day immediately preceding Purchase Contract
Settlement Date, that the Preferred Securities should bear in order for
te Preferred Securities to have an approximate market value of [ %] of
their aggregate liquidation amount on the third Business Day immediately
preceding the Purchase Contract Settlement Date; provided, that the Sponsor
may limit such Reset Spread to be no higher than [ ] basis points [ %].
"Reset Spread" means a spread amount to be determined by
the Reset Agent on the tenth (10) Business Day immediately preceding the
Purchase Contract Settlement Date.
"Responsible Officer" means, with respect to the
Institutional Trustee, any officer within the Corporate Trust Office of the
Institutional Trustee, including, without limitation, any vice-president,
any assistant vice-president, any assistant secretary, the treasurer, any
assistant treasurer or other officer of the Corporate Trust Office of the
Institutional Trustee assigned by the Institutional Trustee to administer
its corporate trust matters and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Rule 3a-5" means Rule 3a-5 under the Investment
Company Act.
"Securities" means the Common Securities and the
Preferred Securities.
"Securities Guarantees" means the Common Securities
Guarantee and the Preferred Securities Guarantee.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, or any successor legislation.
"Sponsor" means Cendant Corporation, a Delaware
corporation, or any successor entity in a merger or consolidation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I
hereto.
"Tax Event Redemption" has the meaning set forth in
Annex I hereto.
"Tax Event Redemption Date" has the meaning set forth
in Annex I hereto.
" [ ]% in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a
single class or, as the context may require, Holders of outstanding
Preferred Securities or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of [ ]% or more of the
aggregate liquidation amount (including the stated amount that would be
paid on repayment, 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.
"Termination Event" has the meaning set forth in Section
1 of the Purchase Contract Agreement.
"Treasury Portfolio" has the meaning set forth in
Annex I hereto.
"Treasury Portfolio Purchase Price" has the meaning set
forth in Annex I hereto.
"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).
"Treasury Securities" has the meaning set forth in
Section 1 of the Purchase Contract Agreement.
"Trustee" or "Trustees" means each Person who has signed
this Declaration as a trustee, so long as such Person shall continue in
office in accordance with the terms hereof, and all other Persons who may
from time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee
or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.
"Two-Year Benchmark Treasury" means direct obligations of
the United States (which may be obligations traded on a when-issued basis
only) having a maturity comparable to the remaining term to maturity of the
Preferred Securities, as agreed upon by the Sponsor and the Reset Agent.
The rate for the Two-Year Benchmark Treasury will be the bid side rate
displayed at 10:00 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date in the Telerate
system (or if the Telerate system is (a) no longer available on the third
Business Day immediately preceding the Purchase Contract Settlement Date or
(b) in the opinion of the Reset Agent (after consultation with the Sponsor)
no longer an appropriate system from which to obtain such rate, such other
nationally recognized quotation system as, in the opinion of the Reset
Agent (after consultation with the Sponsor) is appropriate). If such rate
is not so displayed, the rate for the Two-Year Benchmark Treasury shall be,
as calculated by the Reset Agent, the yield to maturity for the Two-Year
Benchmark Treasury, expressed as a bond equivalent on the basis of a year
of 365 or 366 days, as applicable, and applied on a daily basis, and
computed by taking the arithmetic mean of the secondary market bid rates,
as of 10:30 A.M., New York City time, on the third Business Day immediately
preceding the Purchase Contract Settlement Date of three leading United
States government securities dealers selected by the Reset Agent (after
consultation with the Sponsor) (which may include the Reset Agent or an
Affiliate thereof).
"Underwriting Agreement" means the Underwriting Agreement
for the offering and sale of Preferred Securities.
ARTICLE III
TRUST INDENTURE ACT
SECTION 3.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall,
to the extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee 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 ss.ss. 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) Any 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 3.2 LISTS OF HOLDERS OF SECURITIES.
(b) Each of the Sponsor and the Regular Trustees, on behalf of the
Trust, shall provide the Institutional Trustee (i) within 14 days after
each record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of
the Holders of the Securities ("List of Holders") as of such record date,
provided that neither the Sponsor nor the Regular Trustees, on behalf of
the Trust, shall be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of Holders
given to the Institutional Trustee by the Sponsor and the Regular Trustees
on behalf of the Trust, and (ii) at any other time, within 30 days of
receipt by the Trust of a written request by the Institutional Trustee for
a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Institutional Trustee. The Institutional Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in the Lists of Holders given to it or which it
receives in the capacity as Paying Agent (if acting in such capacity),
provided that the Institutional Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(d) The Institutional Trustee shall comply with its obligations
under ss.ss. 311(a), 310(b) and 312(b) of the Trust Indenture Act.
SECTION 3.3 REPORTS BY THE INSTITUTIONAL TRUSTEE.
Within 60 days after [ ] of each year, commencing [ ], the
Institutional Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by ss.313 of the Trust Indenture
Act, if any, in the form and in the manner provided by ss.313 of the Trust
Indenture Act. The Institutional Trustee shall also comply with the
requirements of ss.313(d) of the Trust Indenture Act.
SECTION 3.4 PERIODIC REPORTS TO INSTITUTIONAL TRUSTEE.
Each of the Sponsor and the Regular Trustees, on behalf of the
Trust, shall provide to the Institutional Trustee such documents, reports
and information as required by ss.314 (if any) and the compliance
certificate required by ss.314 of the Trust Indenture Act in the form, in
the manner and at the times required by ss.314 of the Trust Indenture Act.
SECTION 3.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Regular Trustees, on behalf of the
Trust, shall provide to the Institutional Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Declaration that relate to any of the matters set forth in ss. 314(c) of
the Trust Indenture Act. Any certificate or opinion required to be given by
an officer pursuant to ss. 314(c) (1) may be given in the form of an
Officers' Certificate.
SECTION 3.6 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 underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under this Declaration shall also not be waivable; or
(ii) 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 this 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.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a) (1)(B) of the Trust Indenture Act and such ss. 316(a) (1) (B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and
the Preferred 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 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 underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such
Event of Default under this Declaration as provided below in this
Section 2.6(b), the Event of Default under this 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 this Declaration
as provided below in this Section 2.6(b), the Event of Default
under this Declaration may only be waived by the vote of the
Holders of at least the proportion in liquidation amount of the
Common 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 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 Institutional Trustee will be deemed to be acting
solely on behalf of the Holders of the Preferred Securities and only the
Holders of the Preferred Securities will have the right to direct the
Institutional Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted
by the Trust Indenture Act. Subject to the foregoing provisions of this
Section 2.6(b), upon 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
Institutional Trustee at the direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default with
respect to the Preferred Securities under this Declaration. Any waiver of
an Event of Default under the Indenture by the Institutional Trustee at the
direction of the Holders of the Preferred Securities shall also be deemed
to constitute a waiver by the Holders of the Common Securities of the
corresponding Event of Default under this Declaration with respect to the
Common Securities for all purposes of this Declaration without further act,
vote or consent of the Holders of the Common Securities. The foregoing
provisions of this Section 2.6(c) shall be in lieu of ss.316(a)(1)(B) of the
Trust Indenture Act and such ss. 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 3.7 EVENT OF DEFAULT; NOTICE.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, actually known to a Responsible Officer
of the Institutional Trustee, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all such defaults
with respect to the Securities, unless such defaults have been cured before
the giving of such notice (the term "defaults" for the purposes of this
Section 2.7(a) being hereby defined to be an Event of Default as defined in
the Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Responsible
Officer of the Institutional Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the
Securities.
(b) The Institutional Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 5.1 and 5.3 of the Indenture; or
(ii) any default as to which the Institutional Trustee shall
have received written notice or of which a Responsible Officer of
the Institutional Trustee charged with the administration of this
Declaration shall have actual knowledge.
ARTICLE V
ORGANIZATION
SECTION 5.1 NAME.
The Trust is named "Cendant Capital II, Cendant Capital III,
Cendant Capital IV and Cendant Capital V," as such name may be modified
from time to time by the Regular Trustees following written notice to the
Holders of the Securities. The Trust's activities may be conducted under
the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 5.2 OFFICE.
The address of the principal office of the Trust is c/o Cendant
Corporation, 9 West 57th Street, New York, New York 10019. On ten Business
Days written notice to the Institutional Trustee and Holders of the
Securities, the Regular Trustees may designate another principal office.
SECTION 5.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to issue
and sell the Securities and use the gross proceeds from such sale to
acquire the Debentures, and (b) except as otherwise set forth herein, to
engage in only those other activities necessary, appropriate, convenient 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. It is the intent of the parties to this
Declaration for the Trust to be classified as a grantor trust for United
States federal income tax purposes under Subpart E of Subchapter J of the
Code, pursuant to which the owners of the Preferred Securities and the
Common Securities will be the owners of the Trust for United States federal
income tax purposes, and such owners will include directly in their gross
income the income, gain, deduction or loss of the Trust as if the Trust did
not exist. By the acceptance of this Trust neither the Trustees, the
Sponsor nor the Holders of the Preferred Securities or Common Securities
will take any position for United States federal income tax purposes which
is contrary to the classification of the Trust as a grantor trust.
SECTION 5.4 AUTHORITY.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall
have exclusive and complete authority to carry out the purposes of the
Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an
action taken by the Institutional Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind
the Trust. In dealing with the Trustees acting on behalf of the Trust, no
Person shall be required to inquire into the authority of the Trustees to
bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 5.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the Debentures
and the Institutional Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. A Holder 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 5.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the 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 to a simultaneous issuance of both
Preferred Securities and Common Securities on each Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement and the prospectus relating to the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments or supplements, thereto, pertaining to the Preferred
Securities and any other securities of the Sponsor which the
Sponsor may desire to include in such registration statement;
(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 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 New York Stock Exchange, Inc. or any other
national stock exchange or the Nasdaq Stock Market's National
Market for listing upon notice of issuance of any Preferred
Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared
by the Sponsor, relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement providing for the sale of the Preferred
Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of
record in the name of the Institutional Trustee for the benefit of the
Trust and the Holders of the Preferred Securities and the Holders of Common
Securities;
(d) to give the Sponsor and the Institutional Trustee prompt
written notice of the occurrence of a Tax Event or an Investment Company
Event; provided that the Regular Trustees shall consult with the Sponsor
before taking or refraining from taking any Ministerial Action in relation
to a Tax Event or Investment Company 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 ss.316(c) of the Trust Indenture Act,
Distributions, voting rights, repayments, 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 Regular Trustees pursuant to the terms of the Securities and this
Declaration;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against
the Trust ("Legal Action"), unless pursuant to Section 3.8(e) the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary, appropriate, convenient
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 Debenture as authorized by the Indenture, or (ii) to
extend the maturity date of the Debentures if so authorized by the
Indenture, provided that any such extension of the maturity date will not
adversely affect the Federal income tax status of the Trust;
(n) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory 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;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes, provided that such
action relating to this clause (iii) does not adversely affect the
interests of Holders;
(p) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular Trustees,
on behalf of the Trust;
(q) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
necessary, appropriate, convenient or incidental to the foregoing; and
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none
of the powers or the authority of the Institutional Trustee set forth in
Section 3.8. No permissive power or authority available to the Regular
Trustees shall be construed to be a duty.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Sponsor.
SECTION 5.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) shall cause the Trust not to, engage in any activity
other than as required or authorized by this Declaration. In particular,
the Trust shall not and the Trustees (including the Institutional Trustee)
shall 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;
(iv) make any loans or incur any indebtedness for borrowed
money, 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 (except to the extent expressly authorized in this
Declaration or by the terms of the Securities);
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration or Annex I,
(A) direct the time, method and place of exercising any trust or
power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any
declaration that the principal of all the Debentures shall be due
and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent
shall be required unless the Trust shall have 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 5.8 POWERS AND DUTIES OF THE INSTITUTIONAL TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held
of record in the name of the Institutional Trustee in trust for the benefit
of the Trust and the Holders of the Securities. The right, title and
interest of the Institutional Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as
Institutional Trustee in accordance with Section 5.6. Such vesting and
cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Institutional Trustee Account") in the name of
and under the exclusive control of the Institutional Trustee on
behalf of the Trust and the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Debentures
held by the Institutional Trustee, deposit such funds into the
Institutional Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from
the Institutional Trustee Account in accordance with Section 6.1.
Funds in the Institutional Trustee Account shall be held
uninvested until disbursed in accordance with this Declaration.
The Institutional Trustee Account shall be an account that is
maintained with a banking institution the rating on whose
long-term unsecured indebtedness is rated at least "A" or above by
a "nationally recognized statistical rating organization", as that
term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as shall be
necessary, appropriate, convenient or incidental to effect the
repayment of the Preferred Securities and the Common Securities to
the extent the Debentures mature or are redeemed or the Put Option
is exercised; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary,
appropriate, convenient or incidental 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 Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities and this Declaration.
(e) The Institutional Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration,
the Business Trust Act or the Trust Indenture Act; provided, however, that
if the Institutional Trustee fails to enforce its rights under the
Debentures after a Holder of Preferred Securities has made a written
request, such Holder of Preferred Securities may, to the fullest extent
permitted by applicable law, institute a legal proceeding against the
Debenture Issuer without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such
event is attributable to the failure of the Debenture Issuer to pay
interest on or principal of 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 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 (a "Direct Action") on or after the respective due date specified in
the Debentures. In connection with such Direct Action, the rights of the
Holders of Common Securities will be subrogated to the rights of such
Holders of Preferred Securities. In connection with such Direct Action, the
Debenture Issuer shall be subrogated to the rights of such Holder of
Preferred Securities with respect to payments on the Preferred Securities
under this Declaration to the extent of any payment made by the Debenture
Issuer to such Holder of Preferred Securities in such Direct Action. 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 Institutional Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and
has accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Institutional Trustee occurs and is continuing,
the Institutional Trustee shall, for the benefit of Holders of the
Securities, enforce its rights as holder of the Debentures subject to the
rights of the Holders pursuant to the terms of such Securities and this
Declaration.
(h) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the
Regular Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Institutional
Trustee shall not take any action that is inconsistent with the purposes
and functions of the Trust set out in Section 3.3.
SECTION 5.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE INSTITUTIONAL
TRUSTEE.
(a) The Institutional Trustee, before the occurrence of any Event
of Default and after the curing or waiver of all Events of Default that may
have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants shall
be read into this Declaration against the Institutional Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant
to Section 2.6) of which a Responsible Officer of the Institutional Trustee
has actual knowledge, the Institutional Trustee shall exercise such of the
rights and powers vested in it by this Declaration, and use the same degree
of care and skill in their exercise, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the
Institutional Trustee shall be determined solely by the
express provisions of this Declaration and the
Institutional Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Declaration, and no
implied covenants or obligations shall be read into this
Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part
of the Institutional Trustee, the Institutional Trustee
may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the
Institutional Trustee and conforming to the requirements
of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof
are specifically required to be furnished to the
Institutional Trustee, the Institutional Trustee shall
be under a duty to examine the same to determine whether
or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of
the Institutional Trustee, unless it shall be proved that the
Institutional Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Securities relating
to the time, method and place of conducting any proceeding for any
remedy available to the Institutional Trustee, or exercising any
trust or power conferred upon the Institutional Trustee under this
Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under
the terms of this Declaration or indemnity reasonably satisfactory
to the Institutional Trustee against such risk or liability is not
reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures
and the Institutional Trustee Account shall be to deal with such
property in a similar manner as the Institutional Trustee deals
with similar property for its fiduciary accounts generally,
subject to the protections and limitations on liability afforded
to the Institutional Trustee under this Declaration, the Business
Trust Act and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree with the Sponsor. Money held by the Institutional Trustee
need not be segregated from other funds held by it except in
relation to the Institutional Trustee Account maintained by the
Institutional Trustee pursuant to Section 3.8(c)(i) and except to
the extent otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor
with their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of
the Regular Trustees or the Sponsor.
SECTION 5.10 CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed, sent or presented by
the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officer's Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any
action hereunder, the Institutional Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely upon an Officer's
Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees;
(iv) the Institutional Trustee shall have no duty to see to
any recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration
thereof;
(v) the Institutional Trustee may consult with counsel or
other experts and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope
of such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include
any of its employees. The Institutional Trustee shall have the
right at any time to seek instructions concerning the
administration of this Declaration from any court of competent
jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless such
Holder shall have provided to the Institutional Trustee security
and indemnity, reasonably satisfactory to the Institutional
Trustee, against the costs, expenses (including attorneys' fees
and expenses and the expenses of the Institutional Trustee's
agents, nominees or custodians) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Institutional
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Institutional Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit;
(viii) the Institutional Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, nominees or
attorneys and the Institutional Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as to the
authority of the Institutional Trustee to so act or as to its
compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the
Institutional Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Institutional Trustee (i)
may request instructions from the Holders of the Securities which
instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be
entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii)
may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii) shall
be protected in conclusively relying on or acting in or accordance
with such instructions; and
(xi) except as otherwise expressly provided by this
Declaration, the Institutional Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts
or exercise any right, power, duty or obligation conferred or imposed on
it, in any jurisdiction in which it shall be illegal, or in which the
Institutional Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts, or to exercise any
such right, power, duty or obligation. No permissive power or authority
available to the Institutional Trustee shall be construed to be a duty.
SECTION 5.11 DELAWARE TRUSTEE.
[TO COME]
SECTION 5.12 EXECUTION OF DOCUMENTS.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there
are only two, any Regular Trustee or, if there is only one, such Regular
Trustee is authorized to execute on behalf of the Trust any documents that
the Regular Trustees have the power and authority to execute pursuant to
Section 3.6; provided that, the registration statement referred to in
Section 3.6(b)(i), including any amendments thereto, shall be signed by all
of the Regular Trustees.
SECTION 5.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration shall be taken as the
statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part
thereof. The Trustees make no representations as to the validity or
sufficiency of this Declaration or the Securities.
SECTION 5.14 DURATION OF TRUST.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall dissolve on [ ].
SECTION 5.15 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that if the Trust is not the surviving entity:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the
obligations of the Trust under the Securities; or
(B) substitutes for the Preferred Securities
other securities having substantially the same terms as
the Preferred Securities (the "Successor Securities"), so
long as the Successor Securities rank the same as the
Preferred Securities rank with respect to Distributions
and payments upon liquidation, redemption, repayment and
otherwise and substitutes for the Common Securities other
securities having substantially the same terms as the
Common Securities (the "Successor Common Securities"), so
long as the Successor Common Securities rank the same as
the Common Securities rank with respect to Distributions
and payments upon liquidation, redemption, repayment and
otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of
the Successor Entity that possesses the same powers and duties as
the Institutional Trustee as the holder of the Debentures;
(iii) if necessary, the Preferred Securities or any Successor
Securities will be listed, or any Successor Securities will be
listed upon notification of issuance, on any national securities
exchange or with another organization on which the Preferred
Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges
of the Holders of the Securities (including any Successor
Securities and any Successor Common Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the new entity);
(vi) such Successor Entity has a purpose 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 to the Trust experienced in such
matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new
entity);
(B) following such merger, consolidation, amalgamation
or replacement, neither the Trust nor the Successor Entity
will be required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation
or replacement, the Trust (or the Successor Entity) will
continue to be classified as a grantor trust for United States
federal income tax purposes; and
(viii) the Sponsor guarantees the obligations of
such Successor Entity under the Successor Securities at least to
the extent provided by the Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by
any other entity or permit any other entity to consolidate, amalgamate,
merge with or into, or replace it if such consolidation, amalgamation,
merger or replacement would cause the Trust or Successor Entity to be
classified as other than a grantor trust for United States federal income
tax purposes.
ARTICLE VII
SPONSOR
SECTION 7.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to [ ]% of the
capital of the Trust, at the same time as the Preferred Securities are sold.
SECTION 7.2 RIGHTS AND RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue, sale and, if necessary, the
remarketing of the Preferred Securities, the Sponsor shall have the
exclusive right and responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto (which registration statement may also
include other securities of the Sponsor);
(b) if necessary, to determine the States 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;
(c) if necessary, to prepare for filing by the Trust of an
application to the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing upon notice of issuance
of any Preferred Securities;
(d) if necessary, to prepare for filing by the Trust with the
Commission of a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b) of the
Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Remarketing Agreement, the
Remarketing Underwriting Agreement, the Underwriting Agreement and the
Pricing Agreement providing for the sale of the Preferred Securities.
SECTION 7.3 RIGHT TO PROCEED.
The Sponsor acknowledges the rights of Holders to institute a
Direct Action as set forth in Section 3.8(e) hereto.
SECTION 7.4 EXPENSES.
In connection with the offering, sale and issuance of the
Debentures to the Institutional Trustee and in connection with the sale of
the Securities by the Trust, the Sponsor, in its capacity as borrower with
respect to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters
payable pursuant to the Underwriting Agreement and Pricing Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of the Indenture;
(b) be responsible for and shall pay all debts and obligations
(other than with respect to the Securities) and all costs and expenses of
the Trust (including, but not limited to, costs and expenses relating to
the organization, maintenance and dissolution of the Trust, the offering,
sale and issuance of the Securities (including commissions to the
underwriters in connection therewith), the fees and expenses (including
reasonable counsel fees and expenses) of the Institutional Trustee, the
Delaware Trustee and the Regular Trustees (including any amounts payable
under Article X of this Declaration), the costs and expenses relating to
the operation of the Trust, including, without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses
incurred in connection with the acquisition, financing, and disposition of
Trust assets and the enforcement by the Institutional Trustee of the rights
of the Holders of the Securities;
(c) be primarily liable for any indemnification obligations
arising under Section 10.4 with respect to this Declaration; and
(d) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs
and expenses with respect to such taxes of the Trust.
The Sponsor's obligations under this Section 4.4 shall be for the
benefit of, and shall be enforceable by, any person to whom such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or
not such Creditor has received notice hereof. Any such Creditor may enforce
the Sponsor's obligations under this Section 4.4 directly against the
Sponsor and the Sponsor irrevocably waives any right or remedy to require
that any such Creditor take any action against the Trust or any other
Person before proceeding against the Sponsor. The Debenture Issuer agrees
to execute such additional agreements as may be necessary or desirable in
order to give full effect to the provisions of this Section 4.4.
ARTICLE IX
TRUSTEES
SECTION 9.1 NUMBER OF TRUSTEES.
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees
may be increased or decreased by vote of the holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; provided, however, that, the
number of Trustees shall in no event be less than two (2); provided further
that (1) one Trustee, shall meet the requirements of Section 5.2 (a) and
(b); (2) there shall be at least one Trustee who is an employee or officer
of, or is affiliated with the Sponsor (a "Regular Trustee"); and (3) one
Trustee shall be the Institutional Trustee for so long as this Declaration
is required to qualify as an indenture under the Trust Indenture Act, and
such Institutional Trustee may also serve as Delaware Trustee if it meets
the applicable requirements.
SECTION 9.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, provided that, if the Institutional Trustee
has its principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law, then the Institutional Trustee
shall also be the Delaware Trustee and Section 3.11 shall have no
application.
(c) The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19801
SECTION 9.3 INSTITUTIONAL TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee for so long as this Declaration is required to
qualify as an Indenture under the Trust Indenture Act, 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 750 million
U.S. dollars ($750,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in ss. 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions of
ss. 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee and the Indenture shall be
deemed to be specifically described in this Declaration and the Indenture
for purposes of clause (i) of the first proviso contained in Section 310(b)
of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company
6 Sylvan Way
Parsippany, New Jersey 07054
SECTION 9.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE
TRUSTEE GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity that shall
act through one or more Authorized Officers.
SECTION 9.5 REGULAR TRUSTEES.
The initial Regular Trustees shall be:
[ ]
[ ]
[ ]
[ }
(a) Except as expressly set forth in this Declaration and except
if a meeting of the Regular Trustees is called with respect to any matter
over which the Regular Trustees have power to act, any power of the Regular
Trustees may be exercised by, or with the consent of, any one such Regular
Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any
Regular Trustee is authorized to execute on behalf of the Trust any
documents which the Regular Trustees have the power and authority to cause
the Trust to execute pursuant to Section 3.6, provided, that, the
registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by all of the Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents that the Regular
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.6.
SECTION 9.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.6(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of
the Holders of a Majority in liquidation amount of the Common
Securities voting as a class at a meeting of the Holders of
the Common Securities.
(b) (i) The Trustee that acts as Institutional Trustee
shall not be removed in accordance with Section 5.6(a) until a
successor Institutional Trustee possessing the qualifications
to act as Institutional Trustee under Sections 5.2 and 5.3 (a
"Successor Institutional Trustee") has been appointed and has
accepted such appointment by written instrument executed by
such Successor Institutional Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) The Trustee that acts as Delaware Trustee shall
not be removed in accordance with Section 5.6(a) until a
successor Trustee possessing the qualifications to act as
Delaware Trustee under Sections 5.2 and 5.4 (a "Successor
Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and the
Sponsor.
(e) A Trustee appointed to office shall hold office until such
Trustee's successor shall have been appointed or until such Trustee's
death, removal or resignation. 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
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee
has been appointed and has accepted such appointment
by instrument executed by such Successor
Institutional Trustee and delivered to the Trust,
the Sponsor and the resigning Institutional Trustee;
or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof
distributed to the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Delaware Trustee and delivered
to the Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use all reasonable
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee, as the case may be, if the Institutional Trustee or
the Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in
this Section 5.6 within 60 days after delivery to the Sponsor and the Trust
of an instrument of resignation, the resigning Institutional Trustee or
Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Institutional Trustee or
Successor Delaware Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper and prescribe, appoint a
Successor Institutional Trustee or Successor Delaware Trustee, as the case
may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Institutional Trustee or
Successor Delaware Trustee, as the case may be.
SECTION 9.7 VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the number
of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees
or, if there are more than two Regular Trustees, a majority of the Regular
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section
5.6. SECTION 9.8 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. Whenever a vacancy among
the Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6, the
Regular Trustees in office, regardless of their number, shall have all
the powers granted to the Regular Trustees and shall discharge all the
duties imposed upon the Regular Trustees by this Declaration.
SECTION 9.9 MEETINGS.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any
telephonic meetings of the Regular Trustees or any committee thereof shall
be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours
before a meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of a Regular Trustee at a meeting shall constitute
a waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Regular Trustees may be taken at (i) a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
(ii) without a meeting by the unanimous written consent of the Regular
Trustees. In the event there is only one Regular Trustee, any and all
action of such Regular Trustee shall be evidenced by a written consent of
such Regular Trustee.
SECTION 9.10 DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in
Section 3.6, including any registration statement or amendment thereto
filed with the Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as
set forth herein.
SECTION 9.11 MERGER, CONVERSION. CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Institutional Trustee or the
Delaware Trustee, as the case may be, may be merged or converted or with
which either may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be a party, or any
corporation succeeding to all or substantially all the corporate trust
business of the Institutional Trustee or the Delaware Trustee, as the case
may be, shall be the successor of the Institutional Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.
ARTICLE XI
DISTRIBUTIONS
SECTION 11.1 DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the 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 Interest (as defined in the Indenture)), premium and/or
principal on the Debentures held by the Institutional Trustee (the amount
of any such payment being a "Payment Amount"), the Institutional Trustee
shall and is directed, to the extent funds are available for that purpose,
to make a distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE XIII
ISSUANCE OF SECURITIES
SECTION 13.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall, on behalf of the Trust, issue one
class of preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I
(the "Preferred Securities") and one class of common securities
representing undivided beneficial interests in the assets of the Trust
having such terms as are set forth in Annex I (the "Common Securities").
The Trust shall issue no securities or other interests in the assets of the
Trust other than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature
of any present or any future Regular Trustee. In case any Regular Trustee
who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust,
such Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons who, at
the actual date of execution of such Certificate, shall be the Regular
Trustees of the Trust, although at the date of the execution and delivery
of the Declaration any such person was not such a Regular Trustee.
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as may be
required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of
the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
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 13.2 PAYING AGENT.
In the event that the Preferred Securities are not in book-entry
only form, the Trust shall maintain in the borough of Manhattan, City of
New York, State of New York, an office or agency where the Preferred
Securities may be presented for payment ("Paying Agent"), and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act.
The Trust may appoint the Paying Agent and may appoint one or more
additional paying agents in such other locations as it shall determine. The
term "Paying Agent" includes any additional paying agent. The Trust may
change any Paying Agent without prior notice to any Holder. The Trust shall
notify the Institutional Trustee of the name and address of any Paying
Agent not a party to this Declaration. If the Trust fails to appoint or
maintain another entity as Paying Agent, the Institutional Trustee shall
act as such. The Trust or any of its Affiliates (including the Sponsor) may
act as Paying Agent. The Institutional Trustee shall initially act as
Paying Agent for the Preferred Securities and the Common Securities.
ARTICLE XV
TERMINATION OF TRUST
SECTION 15.1 TERMINATION OF TRUST.
(a) The Trust shall terminate:
(i) upon a Termination Event;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Sponsor; or the
revocation of the Sponsor's charter and the expiration of 90
days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial dissolution
of the Holder of the Common Securities, the Sponsor or the
Trust;
(iv) upon the occurrence and continuation of an
Investment Company Event pursuant to which the Trust shall
have been dissolved in accordance with the terms of the
Securities and all of the Debentures endorsed thereon shall
have been distributed to the Holders of Securities in
exchange for all of the Securities;
(v) when all 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; or
(vi) before the issuance of any Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon completion of the winding-up of the
Trust and its termination, the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 4.4 and Article X shall survive the
termination of the Trust.
ARTICLE XVII
TRANSFER OF INTERESTS
SECTION 17.1 TRANSFER OF SECURITIES.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and
in the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and
void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of
the Sponsor; provided that, any such transfer is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such
transfer would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
SECTION 17.2 TRANSFER OF CERTIFICATES.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected
without charge but only upon payment (with such indemnity as the Regular
Trustees may require) in respect of any tax or other government charges
that may be imposed in relation to it. Upon surrender for registration of
transfer of any Certificate, the Regular Trustees shall cause one or more
new Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer
shall be accompanied by a written instrument of transfer in form
satisfactory to the Regular Trustees duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Certificate surrendered
for registration of transfer shall be canceled by the Regular Trustees. A
transferee of a Certificate shall be entitled to the rights and subject to
the obligations of a Holder hereunder upon the receipt by such transferee
of a Certificate. By acceptance of a Certificate, each transferee shall be
deemed to have agreed to be bound by this Declaration.
SECTION 17.3 DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole
holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the
Securities represented by such Certificate on the part of any Person,
whether or not the Trust shall have actual or other notice thereof.
SECTION 17.4 BOOK ENTRY INTERESTS.
The Preferred Securities Certificates, on original issuance, in
addition to being issued in the form of one or more definitive, fully
registered Preferred Securities Certificate (each a "Definitive Preferred
Securities Certificate") registered initially in the books and records of
the Trust in the name of [NAME], as Purchase Contract Agent, will be issued
in the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the
initial Clearing Agency, by, or on behalf of, the Trust. Such Global
Certificate(s) shall initially be registered on the books and records of
the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred
Security Beneficial Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Beneficial Owner's
interests in such Global Certificate(s), except as provided in Section 9.7.
Except for the Definitive Preferred Security Certificates as specified
herein and the definitive, fully registered Preferred Securities
Certificates that have been issued to the Preferred Security Beneficial
Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force
and effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Certificate(s) and receiving approvals,
votes or consents hereunder) as the Holder of the Preferred Securities and
the sole holder of the Global Certificate(s) and shall have no obligation
to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants to receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants; provided,
that, solely for the purposes of determining whether the Holders of the
requisite amount of Preferred Securities have voted on any matter provided
for in this Declaration, so long as Definitive Preferred Security
Certificates have not been issued, the Trustees may conclusively rely on,
and shall be protected in relying on, any written instrument (including a
proxy) delivered to the Trustees by the Clearing Agency setting forth the
Preferred Security Beneficial Owners' votes or assigning the right to vote
on any matter to any other Persons either in whole or in part.
SECTION 17.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until definitive
fully registered Preferred Security Certificates shall have been issued to
the Preferred Security Beneficial Owners pursuant to Section 9.7 or
otherwise, the Regular Trustees shall give all such notices and
communications specified herein to be given to the Preferred Security
Holders to the Clearing Agency, and shall have no notice obligations to the
Preferred Security Beneficial Owners.
SECTION 17.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to such Preferred Securities.
SECTION 17.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with respect
to the Preferred Securities, then:
(c) definitive fully registered Preferred Security Certificates
shall be prepared by the Regular Trustees on behalf of the Trust with
respect to such Preferred Securities; and
(d) upon surrender of the Global Certificate(s) by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause definitive fully registered Preferred Securities Certificates
to be delivered to Preferred Security Beneficial Owners in accordance with
the instructions of the Clearing Agency. Neither the Trustees nor the Trust
shall be liable for any delay in delivery of such instructions and each of
them may conclusively rely on and shall be protected in relying on, said
instructions of the Clearing Agency. The definitive fully registered
Preferred Security Certificates shall be printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the
Regular Trustees, as evidenced by their execution thereof, and may have
such letters, numbers or other marks of identification or designation and
such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange
on which Preferred Securities may be listed, or to conform to usage.
SECTION 17.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificate should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them and the Trust
harmless, then, in the absence of notice that such Certificate shall have
been acquired by a bona fide purchaser, any Regular Trustee on behalf of
the Trust shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under
this Section 9.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant
to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or
not the lost, stolen or destroyed Certificate shall be found at any time.
ARTICLE XIX
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 19.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the
Debentures, 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 ss. 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 19.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by
this Declaration or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's gross negligence or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Securities
might properly be paid.
SECTION 19.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to
the Trust or to any other Covered Person, an Indemnified Person acting
under this Declaration shall not be liable to the Trust or to any other
Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity (other than the duties imposed on the
Institutional Trustee under the Trust Indenture Act), are agreed by the
parties hereto to replace such other duties and liabilities of such
Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Trust or any Holder of
Securities, the Indemnified Person shall resolve such conflict
of interest, take such action or provide such terms,
considering in each case the relative interest of each party
(including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry
practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made,
taken or provided by the Indemnified Person shall not
constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(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 19.4 INDEMNIFICATION.
(a) (i) The Sponsor shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action,
suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause
to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
Trust to procure a judgment in its favor by reason of the fact
that he is or was a Company Indemnified Person against expenses
(including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Trust and except that no such indemnification shall be made in
respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the
Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall
deem proper.
(iii) Any indemnification under paragraphs (i) and (ii)
of this Section 10.4(a) (unless ordered by a court) shall be made
by the Sponsor only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified
Person is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (i) and
(ii). Such determination shall be made (1) by the Regular Trustees
by a majority vote of a quorum consisting of such Regular Trustees
who were not parties to such action, suit or proceeding, (2) if
such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the
Common Security Holder of the Trust.
(iv) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a)
shall be paid by the Debenture Issuer in advance of the final
disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to
repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the Debenture Issuer
as authorized in this Section 10.4(a). Notwithstanding the
foregoing, no advance shall be made by the Debenture Issuer if a
determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular
Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or
(iii) the Common Security Holder of the Trust, that, based upon
the facts known to the Regular Trustees, independent legal counsel
or Common Security Holder at the time such determination is made,
such person acted in bad faith or in a manner that such person did
not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to
believe his conduct was unlawful. In no event shall any advance be
made in instances where the Regular Trustees, independent legal
counsel or Common Security Holder reasonably determine that such
person deliberately breached such person's duty to the Trust or
its Common or Preferred Security Holders.
(v) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights
to which those seeking indemnification and advancement of expenses
may be entitled under any agreement, vote of shareholders or
disinterested directors of the Sponsor or Preferred Security
Holders of the Trust or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this
Section 10.4(a) shall be deemed to be provided by a contract
between the Sponsor and each Company Indemnified Person who serves
in such capacity at any time while this Section 10.4(a) is in
effect. Any repeal or modification of this Section 10.4(a) shall
not affect any rights or obligations then existing.
(vi) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status
as such, whether or not the Sponsor would have the power to
indemnify him against such liability under the provisions of this
Section 10.4(a).
(vii) For purposes of this Section 10.4(a), references
to "the Trust" shall include, in addition to the resulting or
surviving entity, any constituent entity (including any
constituent of a constituent) absorbed in a consolidation or
merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand
in the same position under the provisions of this Section 10.4(a)
with respect to the resulting or surviving entity as such person
would have with respect to such constituent entity if its separate
existence had continued.
(viii) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue as
to a person who has ceased to be a Company Indemnified Person and
shall inure to the benefit of the successors, heirs, executors and
administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Institutional Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee
or the Delaware Trustee, and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees or
agents of the Institutional Trustee or the Delaware Trustee (each of the
Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless
against, any loss, liability or expense incurred without gross negligence
and, in the case of the Institutional Trustee, pursuant to Section 3.9,
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder. The provisions of this Section 10.4(b) shall
survive the satisfaction and discharge of this Declaration or the
resignation or removal of the Institutional Trustee or the Delaware
Trustee, as the case may be.
SECTION 19.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust
and the Holders of Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive
with the business of the Trust, shall not be deemed wrongful or improper.
No Covered Person, the Sponsor, the Delaware Trustee or the Institutional
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered
Person, the Sponsor, the Delaware Trustee and the Institutional Trustee
shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the Delaware Trustee
and the Institutional Trustee may engage or be interested in any financial
or other transaction with the Sponsor or any Affiliate of the Sponsor, or
may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XXI
ACCOUNTING
SECTION 21.1 FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 21.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Trust
shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted
accounting principles, consistently applied. The Trust shall use the
accrual method of accounting for United States federal income tax purposes.
The books of account and the records of the Trust shall be examined by and
reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Regular Trustees.
(b) The Trust 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 Trust shall endeavor to
deliver all such statements within 30 days after the end of each Fiscal
Year of the Trust.
(c) The Trust 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 Trust on behalf of the Trust with any state or local taxing
authority.
SECTION 21.3 BANKING.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided however, that all payments of
funds in respect of the Debentures held by the Institutional Trustee shall
be made directly to the Institutional Trustee Account and no other funds of
the Trust shall be deposited in the Institutional Trustee Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that the Institutional Trustee shall designate the
signatories for the Institutional Trustee Account.
SECTION 21.4 WITHHOLDING.
The Trust 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 Trust shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder, shall remit amounts withheld with respect
to the Holder to applicable jurisdictions. To the extent that the Trust is
required to withhold and pay over any amounts to any authority with respect
to distributions or allocations to any Holder, the amount withheld shall be
deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, 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 XXIII
AMENDMENTS AND MEETINGS
SECTION 23.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by
a written instrument approved and executed by the Regular Trustees (or, if
there are more than two Regular Trustees, a majority of the Regular
Trustees); and
(i) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, also by
the Institutional Trustee; and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, also by the
Delaware Trustee;
(b) no amendment shall be made:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officer's
Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of
the Institutional Trustee, the Institutional Trustee shall have
first received:
(A) an Officer's Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted
by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers
of the Institutional Trustee in contravention of the
Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment
Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would materially and adversely
affect the rights, privileges or preferences of any Holder of Securities may
be effected only with such additional requirements as may be set forth in
the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with
any other provision of this Declaration;
(iii) add to the covenants, restrictions or
obligations of the Sponsor;
(iv) to conform to any change in Rule 3a-5 or
written change in interpretation or application of Rule
3a-5 by any legislative body, court, government agency or
regulatory authority which amendment does not have a
material adverse effect on the right, preferences or
privileges of the Holders;
(v) to modify, eliminate and add to any provision of
the Declaration to such extent as may be necessary; and
(vi) cause the Trust to continue to be classified
for United States federal income tax purposes as a
grantor trust.
SECTION 23.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN
CONSENT.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms of
the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange
on which the Preferred Securities are listed or admitted for trading. The
Regular Trustees shall call a meeting of the Holders of such class if
directed to do so by the Holders of at least 10% in liquidation amount of
such class of Securities.
Such direction shall be given by delivering to the Regular Trustees one or
more calls in a writing stating that the signing Holders of Securities wish
to call a meeting and indicating the general or specific purpose for which
the meeting is to be called. Any Holders of Securities calling a meeting
shall specify in writing the Security Certificates held by the Holders of
Securities exercising the right to call a meeting and only those Securities
specified shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least
7 days and not more than 60 days before the date of such
meeting. Whenever a vote, consent or approval of the Holders
of Securities is permitted or required under this Declaration,
the terms of the Securities 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 amount of Securities in liquidation
amount that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having
a right to vote thereon were present and voting. Prompt notice
of the taking of action without a meeting shall be given to
the Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that
any written ballot submitted to the Security Holder for the
purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person
to act for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or
validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies,
and judicial interpretations thereunder, as if the Trust were
a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities
shall be conducted by the Regular Trustees or by such other
Person that the Regular Trustees may designate; and
(iv) unless the 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 otherwise provides, the
Regular Trustees, in their sole discretion, shall establish
all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record date,
quorum requirements, voting in person or by proxy or any other
matter with respect to the exercise of any such right to vote.
ARTICLE XXV
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 25.1 REPRESENTATIONS AND WARRANTIES OF INSTITUTIONAL TRUSTEE.
The Trustee that acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Institutional Trustee represents and
warrants to the Trust and the Sponsor at the time of the Successor
Institutional Trustee's acceptance of its appointment as Institutional
Trustee, that:
(a) the Institutional Trustee is a national banking association
with trust powers, duly organized, validly existing and in good standing
under the laws of the United States of America, with trust power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the Institutional Trustee satisfies the requirements set forth
in Section 5.3(a);
(c) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Institutional Trustee. The Declaration
has been duly executed and delivered by the Institutional Trustee, and it
constitutes a legal, valid and binding obligation of the Institutional
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether
the enforcement of such remedies is considered in a proceeding in equity or
at law);
(d) the execution, delivery and performance of the Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the Articles of Organization or By-laws of the Institutional Trustee; and
(e) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration.
SECTION 25.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Delaware Trustee's acceptance
of its appointment as Delaware Trustee, that:
(a) The Delaware Trustee is a Delaware corporation, duly
organized, validly existing and in good standing under the laws of the
State of Delaware, with 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 it
constitutes a legal, valid and binding obligation of the Delaware Trustee,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the
Declaration; and
(d) the execution, delivery and performance of the Declaration by
the Delaware Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Delaware Trustee; and
(e) The Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XXVII
MISCELLANEOUS
SECTION 27.1 NOTICES.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
Cendant Capital II, Cendant Capital III,
Cendant Capital IV and Cendant Capital V
c/o Cendant Corporation
9 West 57th Street
New York, New York 10019
Attn:
(b) if given to the Institutional Trustee or Delaware Trustee, at
its Corporate Trust Office to the attention of Corporate Trust
Administration (or such other address as the Institutional Trustee may give
notice of to the Holders of the Securities):
The Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attn:
(c) 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):
Cendant Corporation
9 West 57th Street
New York, New York 10019
Attn:
(d) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no
notice was given, such notice or other document shall be deemed to have
been delivered on the date of such refusal or inability to deliver.
SECTION 27.2 GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 27.3 INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor
trust. The provisions of this Declaration shall be interpreted to further
this intention of the parties.
SECTION 27.4 HEADINGS.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 27.5 SUCCESSORS AND ASSIGNS.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 27.6 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to
persons or circumstances other than those to which it is held invalid,
shall not be affected thereby.
SECTION 27.7 COUNTERPARTS.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature
pages. All of such counterpart signature pages shall be read as though one,
and they shall have the same force and effect as though all of the signers
had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
------------------------------------
, as Regular Trustee
------------------------------------
, as Regular Trustee
THE WILMINGTON TRUST COMPANY
as Institutional and Delaware Trustee
By
-----------------------------------
Name
-----------------------------------
Title
-----------------------------------
CENDANT CORPORATION
as Sponsor
By
----------------------------------
Name
----------------------------------
Title
----------------------------------
ANNEX I
ANNEX I
TERMS AND CONDITIONS OF
6.45% TRUST ORIGINATED PREFERRED SECURITIES
6.45% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of (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, if not defined in the Declaration,
as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. Preferred Securities of the Trust, with
an aggregate liquidation amount with respect to the assets of the Trust of
and a liquidation amount with respect to the assets of the Trust of $50 per
preferred security, are hereby designated for the purposes of
identification only as "6.45% Trust Originated Preferred Securities" (the
"Preferred Securities"). The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form of Exhibit A-1 to
the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by applicable law or the rules of any stock
exchange on which the Preferred Securities are listed or to conform to
ordinary usage, custom or practice.
(b) Common Securities. Common Securities of the Trust,
with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] Dollars ($__________) and a liquidation amount with respect to
the assets of the Trust of $50 per common security, are hereby designated
for the purposes of identification only as "6.45% Trust Originated Common
Securities" (the "Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the form of
Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by applicable law or to conform to
ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed
initially at a rate per annum of 6.45% (the "Coupon Rate") of the stated
liquidation amount of $50 per Security until February 15, 2001, and at the
Reset Rate thereafter, such rates being the rates of interest payable on
the Debentures to be held by the Institutional Trustee. Distributions in
arrears for more than one quarter will bear interest thereon compounded
quarterly at the rate of 7.5% until February 15, 2001, and at the Reset
Rate thereafter (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held
by the Institutional Trustee and to the extent the Institutional Trustee
has funds available therefor. The amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the
basis of a 360-day year consisting 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 , and will be payable quarterly in arrears, on February 16,
May 16, August 16 and November 16 of each year, commencing on , except as
otherwise described below. 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 extending, in
the aggregate, beyond the maturity date of the Debentures (each an
"Extension Period"). During such Extension Period no interest shall be due
and payable on the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon at the rate of
7.5% until February 15, 2001, and at the Reset Rate thereafter, compounded
quarterly during any such Extension Period (to the extent permitted by
applicable law). Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the first
record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof may
not exceed beyond the maturity date of the Debentures.
(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 Business Day immediately preceding each of the
relevant payment dates on the Securities. Subject to any applicable laws
and regulations and the provisions of the Declaration, each such payment in
respect of the Preferred Securities will be made as described under the
heading "Description of the Trust Preferred Securities -- Book Entry Only
Issuance -The Depository Trust Company" in the Prospectus dated
, the "Prospectus") of the Trust relating to the Registration Statement
on Form S-3 (file no. 333-78447) of the Sponsor and the Trust. The relevant
record dates for the Common Securities shall be the same record date as for
the Preferred Securities. If the Preferred Securities shall not continue to
remain in book-entry only form or are not in book-entry only form at
issuance, the relevant record dates for the Preferred Securities, shall
conform to the rules of any securities exchange on which the securities are
listed and, if none, as shall be selected by the Regular Trustees, which
dates shall be at least more than one, but less than 60 Business Days
before the relevant payment dates, which payment dates correspond to the
interest payment dates on the Debentures. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date,
as a result of the Debenture Issuer having failed to make a payment under
the Debentures, will cease to be payable to the Person in whose name such
Securities are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified
date determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date. So long as the Holder of any Preferred
Securities is the Collateral Agent, the payment of Distributions on such
Preferred Securities held by the Collateral Agent will be made at such
place and to such account as may be designated by the Collateral Agent.
(d) The Coupon Rate on the Securities (as well as the
interest rate on the Debentures) will be reset on the third Business Day
immediately preceding the Purchase Contract Settlement Date to the Reset
Rate (which reset Rate will be in effect on and after the Purchase Contract
Settlement Date). On the Reset Announcement Date, the Reset Spread and the
Two-Year Benchmark Treasury to be used to determine the Reset Rate will be
announced by the Sponsor. On the Business Day immediately following the
Reset Announcement Date, the Holders of Securities will be notified of such
Reset Spread and Two-Year Benchmark Treasury by the Sponsor. Such notice
shall be sufficiently given to Holders of Securities if published in an
Authorized Newspaper.
(e) Not later than 10 calendar days nor more than 15
calendar days prior to the Reset Announcement Date, the Sponsor will notify
DTC (as defined herein) or its nominee (or any successor Clearing Agency or
its nominee) by first-class mail, postage prepaid, to notify the Preferred
Security Beneficial Owner or Clearing Agency Participants holding Preferred
Securities, Income PRIDES or Growth PRIDES, of such Reset Announcement Date
and the procedures to be followed by such Holders of Income PRIDES who
intend to settle their obligation under the Purchase Contract with separate
cash.
(f) 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 of the
Trust (unless a Tax Event Redemption has occurred), the Holders of the
Securities on the date of the dissolution will be entitled to receive out
of the assets of the Trust, after satisfaction of liabilities to creditors,
Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Securities, with an interest rate equal to the
rate of 6.45%, if on or prior to February 15, 2001, and the Reset Rate
thereafter, and bearing accrued and unpaid interest in an amount equal to
the accrued and unpaid Distributions on such Securities and which shall be
distributed on a Pro Rata basis to the Holders of the Securities in
exchange for such Securities (such amount being "Liquidation
Distribution").
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts
payable directly by the Trust on the Securities shall be paid on a Pro Rata
basis.
4. Redemption and Distribution.
(a) Upon the redemption of the Debentures in whole (but
not in part), at maturity, the proceeds from such redemption shall, after
satisfaction of liabilities to creditors, be simultaneously applied to
redeem Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed at a redemption
price of $50 per Security plus an amount equal to accrued and unpaid
Distributions thereon at the date of the repayment, payable in cash.
(b) If an Investment Company Event (as defined herein)
shall occur and be continuing the Regular Trustees shall dissolve the Trust
and, after satisfaction of liabilities to creditors, cause Debentures held
by the Institutional Trustee, having an aggregate principal amount equal to
the aggregate stated liquidation amount of, with an interest rate the rate
of 6.45%, if on or prior to February 15, 2001, and the Reset Rate
thereafter, and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as the
Securities, to be distributed to the Holders of the Securities in
liquidation of such Holders' interests in the Trust on a Pro Rata basis,
within 90 days following the occurrence of such Investment Company Event
(the "90 Day Period"); provided, however, that, if at the time there is
available to the Trust the opportunity to eliminate, within the 90 Day
Period, the Investment Company Event by taking some ministerial action,
such as filing a form or making an election, or pursuing some other similar
reasonable measure that will have no adverse effect on the Trust, the
Debenture Issuer, the Sponsor or the Holders of the Securities and will
involve no material cost ("Ministerial Action"), the Regular Trustees will
pursue such Ministerial Action in lieu of dissolution.
"Investment Company Event" means that the Regular Trustees shall
have received an opinion of independent counsel experienced in practice
under the Investment Company Act (an "Investment Company Event Opinion") to
the effect that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), which Change in 1940 Act
Law becomes effective on or after the date of the Prospectus, there is a
more than an insubstantial risk that the Trust is or will be considered an
Investment Company which is required to be registered under the Investment
Company Act.
(c) If a Tax Event shall occur and be continuing, the
Debentures are redeemable at the option of the Debenture Issuer, in whole but
not in part, on not less than 30 days nor more than 60 days notice ("Tax Event
Redemption"). If the Debenture Issuer redeems the Debentures upon the
occurrence and continuance of a Tax Event, the proceeds from such
redemption shall simultaneously be applied by the Trust to redeem the
Securities having an aggregate stated liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed at a redemption
price (the "Redemption Price"), per Security, equal to the Redemption
Amount plus any accumulated and unpaid distributions thereon to the date of
such redemption. If, following the occurrence of a Tax Event, the Debenture
Issuer exercises its option to redeem the Debentures, the Debenture Issuer
shall appoint the Quotation Agent to assemble the Treasury Portfolio in
consultation with the Company. To the extent the Redemption Price is
received by the Institutional Trustee, the Institutional Trustee will
distribute, to the record Holder of the Securities the Redemption Price
payable in liquidation of such Holder's interests in the Trust.
"Tax Event" means the receipt by the Regular Trustees of an
opinion of a nationally recognized independent tax counsel experienced in
such matters to the effect that, as a result of (a) any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision
or taxing authority thereof or therein affecting taxation, (b) any
amendment to or change in an interpretation or application of such laws or
regulations by any legislative body, court, governmental agency or
regulatory authority or (c) any interpretation or pronouncement that
provides for a position with respect to such laws or regulations that
differs from the generally accepted position on the date the Securities are
issued, which amendment or change is effective or which interpretation or
pronouncement is announced on or after the date of issuance of the
Securities under the Declaration, there is more than an insubstantial risk
that (i) interest payable by the Debenture Issuer on the Debentures would
not be deductible, in whole or in part, by the Debenture Issuer for federal
income tax purposes or (ii) the Trust would be subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Treasury Portfolio" means, with respect to the Applicable
Principal Amount of Debentures (a) if the Tax Event Redemption Date occurs
prior to February 16, 2001, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (i) U.S. Treasury Securities each in the amount of
$1,000 payable on February 15, 2001 in an aggregate amount equal to the
Applicable Principal Amount and (ii) with respect to each scheduled
interest payment date on the Debentures that occurs after the Tax Event
Redemption Date, principal or interest strips of U.S. Treasury Securities
which mature on or prior to such date in an aggregate amount equal to the
aggregate interest payment that would be due on the Applicable Principal
Amount of the Debentures on such date, and (b) if the Tax Event Redemption
Date occurs after February 16, 2001, a portfolio of zero-coupon U.S.
Treasury Securities consisting of (i) principal or interest strips of U.S.
Treasury Securities which mature on or prior to February 15, 2003 in an
aggregate amount equal to the Applicable Principal Amount and (ii) with
respect to each scheduled interest payment date on the Debentures that
occurs after the Tax Event Redemption Date, principal or interest strips of
such U.S. Treasury Securities which mature on or prior to such date in an
aggregate amount equal to the aggregate interest payment that would be due
on the Applicable Principal Amount of the Debentures on such date.
"Applicable Ownership Interest" means, with respect to an Income
PRIDES and the U.S. Treasury Securities in the Treasury Portfolio, (A) a
1/20, or 5%, undivided beneficial ownership interest in a U.S. Treasury
Security in the amount of $1,000 included in such Treasury Portfolio
payable on February 15, 2001 and (B) for each scheduled interest payment
date on the Debentures that occurs after the Tax Event Redemption Date, a
[5]% undivided beneficial ownership interest in a $1,000 face amount of
such U.S. Treasury Security which is a principal or interest strip maturing
on such date.
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to February 16, 2001, the aggregate principal
amount of the Debentures corresponding to the aggregate stated liquidation
amount of the Preferred Securities which are components of Income PRIDES on
the Tax Event Redemption Date or (ii) if the Tax Event Redemption occurs on
or after February 16, 2001, the aggregate principal amount of the
Debentures corresponding to the aggregate stated liquidation amount of the
Preferred Securities outstanding on such Tax Event Redemption Date.
"Redemption Amount" means for each Debenture, the product of (i)
the principal amount of such Debenture and (ii) a fraction whose numerator
is the Treasury Portfolio Purchase Price and whose denominator is the
Applicable Principal Amount.
"Treasury Portfolio Purchase Price" means the lowest aggregate
price quoted by a primary U.S. government securities dealer in New York
City (a "Primary Treasury Dealer") to the Quotation Agent on the third
Business Day immediately preceding the Tax Event Redemption Date for the
purchase of the Treasury Portfolio for settlement on the Tax Event
Redemption Date.
"Quotation Agent" means (i) Merrill Lynch Government Securities,
Inc. and its respective successors, provided, however, that if the
foregoing shall cease to be a Primary Treasury Dealer, the Sponsor shall
substitute therefor another Primary Treasury Dealer and (ii) any other
Primary Treasury Dealer selected by the Sponsor.
On and from the date fixed by the Regular Trustees for a Tax Event
Redemption or any distribution of Debentures and dissolution of the Trust:
(i) the Securities will no longer be deemed to be outstanding, (ii) The
Depository Trust Company ("DTC") or its nominee (or any successor Clearing
Agency or its nominee) or the record Holder of the Preferred Securities,
will receive a registered global certificate or certificates representing
the Debentures to be delivered upon such distribution and any certificates
representing Securities, except for certificates representing Preferred
Securities held by DTC or its nominee (or any successor Clearing Agency or
its nominee), will be deemed to represent beneficial interests in the
Debentures having an aggregate principal amount equal to the aggregate
stated liquidation amount of $50, with an interest rate of 6.45% if on or
prior to February 15, 2001, and at the Reset Rate thereafter, and accrued
and unpaid interest equal to accrued and unpaid Distributions on such
Securities until such certificates are presented to the Debenture Issuer or
its agent for transfer or reissue.
5. Redemption or Distribution Procedures.
(a) Notice of any redemption (other then in connection
with the maturity of the Debentures) 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 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the Tax Event Redemption Date. For purposes of the
calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this Section 5(a), 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.
(b) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 5 (such notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry
only form, with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided that the Debenture Issuer
has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures by
10:00 a.m. New York City time on such Redemption Date, the Institutional
Trustee will deposit irrevocably with DTC or its nominee (or any successor
Clearing Agency or its nominee) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give DTC
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Preferred Securities so called for redemption, and (B) with
respect to Preferred Securities issued in definitive form and Common
Securities, provided that the Debenture Issuer has paid the Institutional
Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Institutional Trustee will
pay the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust. Notwithstanding the foregoing, so long as the
Holder of any Preferred Securities is the Collateral Agent or the Purchase
Contract Agent, the payment of the Redemption Price in respect of such
Preferred Securities held by the Collateral Agent or the Purchase Contract
Agent shall be made no later than 12:00 noon, New York City time, on the
Tax Event Redemption Date by check or wire transfer in immediately
available funds at such place and to such account as may be designated by
the Collateral Agent or the Purchase Contract Agent. If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on
the date of such deposit, or on the redemption date, as applicable,
distributions will cease to accrue on the Securities so redeemed and 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. Neither
the Regular Trustees nor the Trust shall be required to register or cause
to be registered the transfer of any Securities that have been so called
for redemption. If any date fixed for redemption of Securities is not a
Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (without any
interest or other payment in respect of any such delay) except that, if
such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for repayment. If payment of
the Redemption Price in respect of any Securities is improperly withheld or
refused and not paid either by the Institutional Trustee or by the Sponsor
as guarantor pursuant to the relevant Securities Guarantee, Distributions
on such Securities will continue to accrue from the original redemption
date to the actual date of payment, in which case the actual payment date
will be considered the date fixed for repayment for purposes of calculating
the Redemption Price and such Securities shall cease to be outstanding.
(c) Redemption/Distribution Notices shall be sent by the
Trust to (A) in respect of the Preferred Securities, the DTC or its nominee
(or any successor Clearing Agency or its nominee) if the Global
Certificates have been issued or, if Definitive Preferred Security
Certificates have been issued, to the Holder thereof, and (B) in respect of
the Common Securities, to the Holder thereof.
(d) 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.
6. Repayment at Option of Holders.
(a) If a Failed Remarketing (as described in Section
5.4(b) of the Purchase Contract Agreement and incorporated herein by
reference) has occurred, each holder of Securities who holds such
Securities on the day immediately following the Purchase Contract
Settlement Date, shall have the right on or after the Business Day
immediately following February 16, 2001 to require the Trust to repay all
or a portion of such Securities owned by such holder (the "Put Option") on
March 2, 2001 (the "Put Option Exercise Date"), upon at least three
Business Days' prior notice, at a repayment price of $50 per Security plus
an amount equal to the accrued and unpaid Distributions (including deferred
distributions if any) thereon to the date of payment (the "Put Option
Repayment Price").
(b) The Trust shall obtain funds to pay the Put Option
Repayment Price of Securities being repaid under the Put Option through
presentation by the Institutional Trustee, on behalf of the Trust, to the
Debenture Issuer, pursuant to the right of the holder of the Debentures to
require the Debenture Issuer to repay all or a portion of the Debentures on
the Put Option Exercise Date, Debentures in an aggregate principal amount
equal to the aggregate stated liquidation amount of such Securities for
repayment on the Put Option Exercise Date at the Debenture Repayment Price.
(c) In order for the Securities to be repaid on the Put
Option Exercise Date, the Trust must receive on or prior to 4:00 p.m. on
the third Business Day immediately preceding the Put Option Exercise Date,
at the Corporate Trust Office of the Institutional Trustee, the Securities
to be repaid with the form entitled "Option to Elect Repayment" on the
reverse thereof or otherwise accompanying such Security duly completed. Any
such notice received by the Trust shall be irrevocable. All questions as to
the validity, eligibility (including time of receipt) and acceptance of the
Securities for repayment shall be determined by the Trust, whose
determination shall be final and binding.
(d) Payment of the Put Option Repayment Price to Holders
of Securities shall be made at the Corporate Trust Office of the
Institutional Trustee, provided that the Institutional Trustee has received
from the Debenture Issuer a sufficient amount of cash in connection with
the related repayment of the Debenture no later than 1:00 p.m., New York
City time, on the Put Option Exercise Date by check or wire transfer in
immediately available funds at such place and to such account as may be
designated by such Holders. If the Institutional Trustee holds immediately
available funds sufficient to pay the Put Option Repayment Price of such
Securities, then, immediately prior to the close of business on the Put
Option Exercise Date, such Securities will cease to be outstanding and
distributions thereon will cease to accrue, whether or not Securities are
delivered to the Institutional Trustee, and all other rights of the Holder
in respect of the Securities, including the Holder's right to require the
Trust to repay such Securities, shall terminate and lapse (other than the
right to receive the Put Option Repayment Price but without interest on
such Put Option Repayment Price). Neither the Regular Trustees nor the
Trust shall be required to register or cause to be registered the transfer
of any Securities for which repayment has been elected. If payment of the
Put Option Repayment Price in respect of Securities is (i) improperly
withheld or refused and not paid either by the Institutional Trustee or by
the Sponsor as guarantor pursuant to the Securities Guarantee, or (ii) not
paid by the Institutional Trustee as the result of an Event of Default with
respect to the Debentures presented for repayment as described in paragraph
6(b), Distributions on such Securities will continue to accrue, from the
original Put Option Exercise Date to the actual date of payment, in which
case the actual payment date will be considered the Put Option Exercise
Date for purposes of calculating the Put Option Repayment Price.
(e) The Debenture Issuer will request, not later than 10
nor more than 15 calendar days prior to February 13, 2001 (the date on
which some or all of the Preferred Securities could be remarketed in the
manner described in Section 5.4(b) of the Purchase Contract Agreement and
incorporated herein by reference) that DTC notify the Preferred Securities
Holders as well as the Income PRIDES and Growth PRIDES holders of such
remarketing and of the procedures that must be followed if a Holder of
Preferred Securities wishes to exercise such Holder's rights with respect
to the Put Option.
7. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 7(b) and 9 and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) 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 direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the
time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii)
waiving any past default and its consequences that is waivable under the
Indenture, (iii) exercising any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable, or (iv)
consenting 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 specifically 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
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Preferred Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
The Institutional Trustee shall not revoke any action previously authorized
or approved by a vote of the Holders of the Preferred Securities. Other
than with respect to directing the time, method and place of conducting any
remedy available to the Institutional Trustee or the Debenture Trustee as
set forth above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Preferred Securities
under this paragraph unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Debentures after a Holder of Preferred
Securities has made a written request, such Holder of Preferred Securities
may, to the fullest extent permitted by applicable law, institute a legal
proceeding directly against the Debenture Issuer to enforce the
Institutional Trustee's rights under the Debentures without first
instituting a legal proceeding against the Institutional Trustee or any
other Person. Notwithstanding the foregoing, if an 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 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 shall not exercise directly any other remedy
available to the holders of the Debentures.
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 Regular Trustees will cause a
notice of any meeting at which Holders of Preferred Securities are entitled
to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Preferred
Securities. Each such notice will include a statement setting forth (i) the
date of such meeting or the date by which such action is to be taken, (ii)
a description of any resolution proposed for adoption at such meeting on
which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of
proxies or consents.
No vote or consent of the Holders of the Preferred Securities will
be required for the Trust to repay 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.
8. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b) and (c) and
Section 9 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 or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only
after any 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 any remedy available to the Institutional Trustee, or exercising any
trust or power conferred upon the Institutional Trustee under the
Declaration, including (i) directing the time, method, and place of
conducting any proceeding for any remedy available to the Debenture
Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under 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 specifically would require the consent or act of
the Holders of a Super Majority, the Institutional Trustee may only give
such consent or take such action at the written direction of the Holders of
at least the proportion in liquidation amount of the Common Securities
which the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding. Pursuant to this Section 7(c), the
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than
with respect to directing the time, method and place of conducting any
remedy available to the Institutional Trustee or the Debenture Trustee as
set forth above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities
under this paragraph unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Declaration, any Holder of Common Securities
may institute a legal proceeding directly against any Person to enforce the
Institutional Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Institutional Trustee or any
other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of
any meeting at which Holders of Common Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Common Securities. Each
such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms
of the Securities.
9. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1
of the Declaration, if any proposed amendment to the Declaration provides
for, or the Regular Trustees otherwise propose to effect, (i) any action
that would materially adversely affect the powers, preferences or special
rights of the Securities, whether by way of amendment to the Declaration or
otherwise, or (ii) the dissolution of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
as a class will be entitled to vote on such amendment or proposal (but not
on any other amendment or proposal) and such amendment or proposal shall
not be effective except with the approval of the Holders of at least a
Majority in liquidation amount of the Securities, voting together as a
single class; provided, however, if any amendment or proposal referred to
in clause (i) above would adversely affect only the 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 a Majority in liquidation amount
of such class of Securities.
(b) In the event the consent of the Institutional
Trustee as the holder of the Debentures is required under the Indenture
with respect to any amendment, modification or termination on the Indenture
or the Debentures, the Institutional Trustee shall request the written
direction of the Holders of the Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in liquidation amount
of the Securities voting together as a single class; provided, however,
that where a consent under the Indenture specifically would require a Super
Majority, the Institutional Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquidation amount
of the Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding; provided,
further, that the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
Section 8(b) unless (i) the Institutional Trustee has obtained an opinion
of tax counsel to the effect that for the purposes of United States federal
income tax the Trust will not be classified as other than a grantor trust
on account of such action or (ii) such action would not reduce or otherwise
adversely affect powers of the Institutional Trustee or cause the Trust to
be deemed an "investment company" which is required to be registered under
the Investment Company Act of 1940.
10. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default under the Declaration has occurred and is
continuing, in which case any funds available to make such payment shall be
paid first to each Holder of the Preferred Securities pro rata according to
the aggregate liquidation amount of Preferred Securities held by the
relevant Holder relative to the aggregate liquidation amount of all
Preferred Securities outstanding, and only after satisfaction of all
amounts owed to the Holders of the Preferred Securities, to each Holder of
Common Securities pro rata according to the aggregate liquidation amount of
Common Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Common Securities outstanding.
11. 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 Institutional Trustee, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to
payment of the Holders of the Preferred Securities.
12. Acceptance of Securities Guarantee 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.
13. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
14. Miscellaneous.
These terms constitute a part of the Declaration.
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.
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT -
This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Preferred Security is exchangeable for Preferred Securities registered
in the name of a person other than the Depositary or its nominee only in
the limited circumstances described in the Declaration and no transfer of
this Preferred Security (other than a transfer of this Preferred Security
as a whole by the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the Depositary)
may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) to the Trust or its agent for registration of transfer, exchange
or payment, and any Preferred Security issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative
of The Depository Trust Company and any payment hereon is made to Cede &
Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.]
Certificate Number Number of Preferred Securities
----------- ---------
CUSIP NO.-------------
Certificate Evidencing Preferred Securities
of
Cendant Capital II, Cendant Capital III,
Cendant Capital IV and Cendant Capital V
6.45% Trust Originated Preferred Securities
(liquidation amount $50 per Preferred Security)
Cendant Capital II, Cendant Capital III, Cendant Capital IV and
Cendant Capital V, 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
preferred undivided beneficial interests in the assets of the Trust
designated as the 6.45% Trust Originated Preferred Securities (liquidation
amount $50 per preferred security) (the "Preferred Securities"). The
Preferred Securities are transferable on the books and records of the
Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The 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 Agreement of Trust of the Trust dated as of 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 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.
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.
IN WITNESS WHEREOF, the Trust has executed this certificate this day of .
Cendant Capital II, Cendant
Capital III, Cendant
Capital IV and Cendant
Capital V
By:-----------------------
Name:---------------------
Title: Regular Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at
a rate per annum of 6.45% (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 Institutional Trustee.
Distributions in arrears for more than one quarter will bear interest
thereon compounded quarterly at the rate of 6.45% until February 15, 2001,
and at the Reset Rate thereafter (to the extent permitted by applicable
law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has actually received and holds 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 consisting 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
original issuance and will be payable quarterly in arrears, on February 16,
May 16, August 16 and November 16 of each year, commencing on , to holders
of record, if in book-entry only form, one Business Day prior to such
payment date, which payment dates shall correspond to the interest payment
dates on the Debentures. In the event that the Preferred Securities are not
in book-entry form, the Regular Trustees will have the right to select
relevant record dates, which will be more than one Business Day but less
than 60 Business Days prior to the relevant payment dates. 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 beyond the date of maturity of the Debentures
(each an "Extension 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 at the rate of
% until February 15, 2001, and at the Reset Rate thereafter, compounded
quarterly during any such Extension Period (to the extent permitted by
applicable law). Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the first
record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period; provided that such Extension
Period together with all such previous and further extensions thereof may
not exceed beyond the maturity date of the Debenture.
The Preferred Securities shall be redeemable as provided in the
Declaration.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Trust to repay $ stated liquidation amount of the within Preferred
Security, pursuant to its terms, on the "Put Option Exercise Date,"
together with distributions thereon accrued but unpaid to the date of
repayment, to the undersigned at:
- -----------------------------------------------------------
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration,
a new Preferred Security or Preferred Securities representing the remaining
stated liquidation amount of this Preferred Security.
For this Option to Elect Repayment to be effective, the within
Preferred Security with this Option to Elect Repayment duly completed must
be received by the Trust at the Corporate Trust Office of the Institutional
Trustee at Wilmington Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration.
Dated: Signature:-------------------------------
Signature Guarantee:---------------------
Note: The signature to this Option to Elect Repayment must correspond with
the name as written upon the face of the within Preferred Security in every
particular without alternation or enlargement or any change whatsoever.
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred 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
Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
---------------------------
Signature:----------------------------------
Signature Guarantee:-----------------------
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
The Common Securities may only be transferred by the Debenture
Issuer and any Related Party to the Debenture Issuer or a Related Party of
the Debenture Issuer; 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.
Certificate Number Number of Common Securities
------------- ------
Certificate Evidencing Common Securities
of
Cendant Capital II, Cendant Capital III,
Cendant Capital IV and Cendant Capital V
6.45% Trust Originated Common Securities
(liquidation amount $50 per Common Security)
Cendant Capital II, Cendant Capital III, Cendant Capital IV and
Cendant Capital V, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that Cendant Corporation
(the "Holder") is the registered owner of common securities of the Trust
representing common undivided beneficial interests in the assets of the
Trust designated as the 6.45% Trust Originated Common Securities
(liquidation amount $50 per common security) (the "Common Securities"). The
Common Securities are transferable on the books and records of the Trust,
in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. 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 , 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.
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 day of
.
Cendant Capital II, Cendant
Capital III, Cendant Capital IV
and Cendant Capital V
By:--------------------------------
Name:------------------------------
Title: Regular Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a
rate per annum of 6.45% (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 Institutional Trustee.
Distributions in arrears for more than one quarter will bear interest
thereon compounded quarterly at the rate of 6.45% until February 15, 2001,
and at the Reset Rate thereafter (to the extent permitted by applicable
law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has actually received and holds 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 original
issuance and will be payable quarterly in arrears, on February 16, May 16,
August 16 and November 16 of each year, commencing on , to Holders of
record one Business Day prior to such payment dates, which payment dates
shall correspond to the interest payment dates 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 beyond the date of maturity of the
Debentures (each an "Extension 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 rate of 7.5% until February
15, 2001, and at the Reset Rate thereafter, compounded quarterly during any
such Extension Period. Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the first
record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period; provided, that such Extension
Period together with all such previous and further extensions thereof may
not exceed beyond the maturity date of the Debentures.
The Common Securities shall be redeemable as provided in the
Declaration.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Trust to repay $ stated liquidation amount of the within Common Security,
pursuant to its terms, on the "Put Option Exercise Date," together with
distributions thereon accrued and unpaid to the date of repayment, to the
undersigned at:
- ---------------------------------------------------------
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration,
a new Common Security or Common Securities representing the remaining
stated liquidation amount of this Common Security.
For this Option to Elect Repayment to be effective, the within Common
Security with this Option to Elect Repayment duly completed must be
received by the Trust at the Corporate Trust Office of the Institutional
Trustee at Wilmington Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration.
Dated: Signature:--------------------------
Signature Guarantee:----------------
Note: The signature to this Option to Elect Repayment must correspond with
the name as written upon the face of the within Common Security in every
particular without alternation or enlargement or any change whatsoever.
----------------
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:--------------------------------
Signature Guarantee:----------------------
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
Exhibit 4.13
-------------------------------------------
FORM OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
CENDANT CAPITAL II, CENDANT CAPITAL III
CENDANT CAPITAL IV, AND CENDANT CAPITAL V
Dated as of [ ]
-------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1 Definitions and Interpretation.....................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application...................4
SECTION 2.2 List of Holders of Securities......................4
SECTION 2.3 Reports by the Preferred Guarantee Trustee.........5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee....5
SECTION 2.5 Evidence of Compliance with Conditions Precedent...5
SECTION 2.6 Events of Default; Waiver..........................5
SECTION 2.7 Event of Default; Notice...........................5
SECTION 2.8 Conflicting Interests..............................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee
Trustee............................................6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee......7
SECTION 3.3 Not Responsible for Recitals or Issuance of
Guarantee..........................................9
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility...........9
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees................................10
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.........................................10
SECTION 5.2 Waiver of Notice and Demand.......................10
SECTION 5.3 Obligations Not Affected..........................11
SECTION 5.4 Rights of Holders.................................11
SECTION 5.5 Guarantee of Payment..............................12
SECTION 5.6 Subrogation.......................................12
SECTION 5.7 Independent Obligations...........................12
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions........................12
SECTION 6.2 Ranking...........................................13
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.......................................13
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.......................................14
SECTION 8.2 Indemnification...................................14
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns............................15
SECTION 9.2 Amendments........................................15
SECTION 9.3 Notices...........................................15
SECTION 9.4 Benefit...........................................16
SECTION 9.5 Governing Law.....................................16
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of [DATE], is executed and delivered by CENDANT, Inc., a Delaware
corporation (the "Guarantor"), and The Wilmington Trust Company, as trustee
(the "Preferred Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Cendant Capital II, Cendant Capital III, Cendant Capital IV and
Cendant Capital V, each a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of [ ], among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time
of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof [ ] preferred securities, liquidation amount
$[ ] per preferred security, having an aggregate liquidation amount of [ ]
designated the [ ] Trust Originated Preferred Securities (the "Preferred
Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth in this Preferred Securities Guarantee, to pay to
the Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein; and
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in substantially
identical terms to this Preferred Securities Guarantee for the benefit of
the holders of the Common Securities (as defined herein), except that if an
Event of Default (as defined in the Indenture), has occurred and is
continuing, the rights of holders of the Common Securities to receive
Guarantee Payments under the Common Securities Guarantee are subordinated
to the rights of Holders of Preferred Securities to receive Guarantee
Payments under this Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(c) all reference to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this
Preferred Securities Guarantee as modified, supplemented
or amended from time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of
this Preferred Securities Guarantee, unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Preferred Securities Guarantee,
unless otherwise defined in this Preferred Securities
Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Business Day" means any day other than Saturday, Sunday or any
day on which banking institutions in the City of New York, New York are
authorized or required by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred
Guarantee Trustee at which the corporate trust business of the Preferred
Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is
located at The Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, Delaware, 19890.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt
securities of the Guarantor or designated the [ ] Junior Subordinated
Debentures due [ ] held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.
"Direction" by a person means a written direction signed: (a) if
the Person is a natural person, by that Person; or (b) in any other case in
the name of such Person by one or more Authorized Officers of that Person.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by the Issuer: (i) any accrued
and unpaid Distributions (as defined in the Declaration) that are required
to be paid on such Preferred Securities to the extent the Issuer shall have
funds available therefor, (ii) the redemption price, including all accrued
and unpaid distributions to the date of redemption (the "Repayment Price")
with respect to Preferred Securities in respect of which the related
Debentures have been redeemed by the Company upon the occurrence of a Tax
Event Redemption, to the extent the Issuer has funds available therefor,
and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution
of Debentures to the Holders in exchange for Preferred Securities as
provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an event of
default under the Indenture has occurred and is continuing, the rights of
holders of the Common Securities to receive payments under the Common
Securities Guarantee Agreement are subordinated to the rights of Holders of
Preferred Securities to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Preferred Securities; provided, however, that,
in determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of [DATE], among the
Guarantor (the "Debenture Issuer") and The Wilmington Trust Company, as
trustee, and any indenture supplemental thereto pursuant to which certain
subordinated debt securities of the Debenture Issuer are to be issued to
the Institutional Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except
as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than [ ]% of the
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
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 Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
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 Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Preferred Guarantee Trustee" means The Wilmington Trust Company,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred
Securities Guarantee and thereafter means each such Successor Preferred
Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred
Guarantee Trustee, any officer within the Corporate Trust office of the
Preferred Guarantee Trustee, including any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the Preferred
Guarantee 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.
"Successor Preferred Guarantee Trustee" means a successor
Preferred Guarantee Trustee possessing the qualifications to act as
Preferred Guarantee Trustee under Section 4.1.
"Tax Event Redemption" has the same meaning as defined in Annex I
to the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be
governed by such provisions; and
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed
by Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 2.2 List of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Preferred
Securities ("List of Holders") as of such date, (i) within 1 Business Day
after [DATE] and [DATE] of each year, and (ii) at any other time within 30
days of receipt by the Guarantor 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 Preferred Guarantee Trustee provided, that the Guarantor shall not 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 Preferred
Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after [DATE] of each year, the Preferred Guarantee
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 Preferred Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee
such documents, reports and information as required by Section 314 (if any)
and the compliance certificate required by Section 314 of the Trust
Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided
for in this Preferred Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
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 and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Preferred Securities Guarantee, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Preferred Securities, notices of all
Events of Default actually known to a Responsible Officer of the Preferred
Guarantee Trustee, unless such defaults have been cured before the giving
of such notice, provided, that, the Preferred Guarantee Trustee shall be
protected in withholding such notice if and so long as a Responsible
Officer of the Preferred Guarantee Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders of the
Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice, or of which a Responsible Officer of
the Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration and the Indenture shall be deemed to be
specifically described in this Preferred Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor
Preferred Guarantee Trustee. The right, title and interest of the Preferred
Guarantee Trustee shall automatically vest in any Successor Preferred
Guarantee Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Preferred Guarantee Trustee has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities
Guarantee for the benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing or waiver of all Events of Default
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Preferred Securities Guarantee, and no
implied covenants shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Preferred Guarantee Trustee,
the Preferred Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Preferred Securities Guarantee, and use the
same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her
own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee 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 any Event of Default and
after the curing or waiving of such Events of Default that may
have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and the
Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Preferred Securities Guarantee, and no implied
covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Preferred Guarantee Trustee, the Preferred Guarantee 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 Preferred Guarantee
Trustee and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically required
to be furnished to the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible
Officer of the Preferred Guarantee Trustee, unless it shall be
proved that the Preferred Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Preferred Guarantee 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
Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred Guarantee Trustee to expend or risk
its own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of any of
its rights or powers, if the Preferred Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such
funds or liability is not reasonably assured to it under the
terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee,
against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from
acting upon, any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated
by this Preferred Securities Guarantee shall be sufficiently
evidenced by a Direction or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem
it desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the Preferred
Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request
and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty
to see to any recording, filing or registration of any instrument
(or any rerecording, refiling or reregistration thereof).
(v) The Preferred Guarantee Trustee may consult with
competent legal counsel, and the written advice or opinion of
such counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include
any of its employees. The Preferred Guarantee Trustee shall have
the right at any time to seek instructions concerning the
administration of this Preferred Securities Guarantee from any
court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it
by this Preferred Securities Guarantee at the request or
direction of any Holder, unless such Holder shall have provided
to the Preferred Guarantee Trustee such Security and indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee Trustees,
agents, nominees or custodians) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Preferred Guarantee Trustee; provided that, nothing contained in
this Section 3.2 (a) (vi) shall be taken to relieve the Preferred
Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by
this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound
to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document,
but the Preferred Guarantee Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters
as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any
of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians or
attorneys, and the Preferred Guarantee 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 Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders of the Preferred
Securities, and the signature of the Preferred Guarantee Trustee
or its agents alone shall be sufficient and effective to perform
any such action. No third party shall be required to inquire as
to the authority of the Preferred Guarantee Trustee to so act or
as to its compliance with any of the terms and provisions of this
Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or
its agent's taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem
it desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder, the
Preferred Guarantee Trustee (i) may request instructions from the
Holders of a Majority in liquidation amount of the Preferred
Securities, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received,
and (iii) shall be protected in conclusively relying on or acting
in accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee 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 Preferred Guarantee 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 Preferred Guarantee Trustee
shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not
assume any responsibility for their correctness. The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a)There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; 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 Securities and Exchange
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 [
] U.S. dollars ($[ ]), 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 4.1 (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.
(b) If at any time the Preferred Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee
Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred Guarantee
Trustee and delivered to the Guarantor, which resignation shall not take
effect until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment by instrument in writing executed by such
Successor Preferred Guarantee Trustee and delivered to the Guarantor and
the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery to the Guarantor of an instrument of resignation,
the resigning Preferred Guarantee Trustee may petition any court of
competent jurisdiction for appointment of a Successor Preferred Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any,
as it may deem proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to
the Holders or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Preferred Securities Guarantee and of any liability to which it applies or
may apply, presentment, demand for payment, any right to require a
proceeding first against the Issuer or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Preferred Securities Guarantee shall in no way be
affected or impaired by reason of the happening from time to time of any
of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Repayment Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities (other than an extension of time for payment of Distributions,
Repayment Price, Liquidation Distribution or other sum payable that
results from the extension of any interest payment period on the
Debentures or any extension of the maturity date of the Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee
Trustee under this Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this
Preferred Securities Guarantee, any Holder of Preferred Securities may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Preferred Securities Guarantee, without first instituting
a legal proceeding against the Issuer, the Preferred Guarantee Trustee or
any other Person. Notwithstanding the foregoing, if the Guarantor has
failed to make a Guarantee Payment, a holder of Preferred Securities may
directly institute a proceeding against the Guarantor for enforcement of
the Preferred Security Guarantee for such payment. The Guarantor waives any
right or remedy to require that any action on this Preferred Securities
Guarantee be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all rights, if any, of the
Holders of Preferred Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Preferred
Securities Guarantee; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled
to enforce or exercise any right that it may acquire by way of subrogation
or any indemnity, reimbursement or other agreement, in all cases as a
result of payment under this Preferred Securities Guarantee, if, at the
time of any such payment, any amounts are due and unpaid under this
Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such amount to
the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this
Preferred Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3
hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there
shall have occurred an Event of Default or an Event of Default under the
Declaration and written notice of such Event of Default has been given to
the Guarantor, then (a) the Guarantor shall not declare or pay dividends
or make any distribution with respect to, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of capital stock of the
Guarantor in connection with the satisfaction by the Guarantor of its
obligations under any employee or agent benefit plans or the satisfaction
by the Guarantor of its obligations pursuant to any contract or security
outstanding on the date of such event requiring the Guarantor to purchase
capital stock of the Guarantor, (ii) as a result of a reclassification of
the Guarantor's capital stock or the exchange or conversion of one class
or series of the Guarantor's capital stock for another class or series of
the Guarantor's capital stock, (iii) the purchase of fractional interests
in shares of the Guarantor's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted
or exchanged, (iv) dividends or distributions in capital stock of the
Guarantor (or rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance or exchange of
capital stock or (v) redemptions or purchases of any rights outstanding
under a shareholder rights plan), (b) the Guarantor shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities issued by the Guarantor that rank junior to
the Debentures to the extent appropriate notice has been given to the
holders thereof effectively blocking such payment or to the extent the
failure to make any such payment is otherwise authorized under the
agreements governing such debt securities, and (c) the Guarantor shall not
make any guarantee payments with respect to the foregoing (other than
payments pursuant to the Guarantee or the Common Securities Guarantee) to
the extent appropriate notice has been given to the beneficiaries thereof
effectively blocking such payment or to the extent the failure to make any
such payment is otherwise authorized under the agreements governing such
guarantee payments.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and, at all times when an Event of Default has
occurred and is continuing under the Declaration, will rank:
(i) subordinate and junior in right of payment to, and
shall not be paid until the prior payment in full of, all
liabilities of the Guarantor except those liabilities of the
Guarantor made pari passu herewith or subordinate hereto by their
terms;
(ii) pari passu with, and shall be paid ratably in any
bankruptcy, liquidation or dissolution of the Guarantor with, the
most senior preferred or preference stock now or hereafter issued
by the Guarantor and with any guarantee now or hereafter entered
into by the Guarantor in respect of any preferred or preference
stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Repayment Price of all Preferred Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) upon full payment of the amounts payable in accordance
with the Declaration upon liquidation of the Issuer. Notwithstanding the
foregoing, this Preferred Securities Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any
Holder of Preferred Securities must restore payment of any sums paid under
the Preferred Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor 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 in
accordance with this Preferred Securities Guarantee and in a manner that
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Preferred
Securities Guarantee 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 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 Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor 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 Guarantor, 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
Preferred Securities might properly be paid.
SECTION 8.2 Indemnification
(a) To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each Indemnified Person from
and against any loss, damage or claim incurred by such Indemnified Person
by reason of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Guarantee Agreement and in a
manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by this Guarantee
Agreement, 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 negligence or willful misconduct with
respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, reasonable
out-of-pocket expenses (including legal fees) incurred by an Indemnified
Person in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Guarantor prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt
by the Guarantor of an undertaking by or on behalf of the Indemnified
Person to repay such amount if it shall be determined that the Indemnified
Person is not entitled to be indemnified as authorized in Section 8.2(a).
(c) The provisions set forth in this Section 8.2 shall survive
the termination of the Preferred Securities Guarantee or the resignation
or removal of the Preferred Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred
Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect
the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may only be amended with
the prior approval of the Holders of at least a Majority in 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 the
outstanding Preferred Securities. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders of the Securities apply to
the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee
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 Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address
as the Preferred Guarantee Trustee may give notice of to the Holders of
the Preferred Securities):
The Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of
to the Holders of the Preferred Securities):
CENDANT CORPORATION
9 West 57th Street
New York, New York 10019
(c) If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
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 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of
the Holders of the Preferred Securities and, subject to Section 3.1(a), is
not separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
CENDANT CORPORATION, as Guarantor
By:
---------------------------------------------
Name:
Title:
THE WILMINGTON TRUST COMPANY, as Preferred
Guarantee Trustee
By:
---------------------------------------------
Name:
Title:
Exhibit 4.14
CENDANT CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS PURCHASE CONTRACT AGENT
____________________
FORM OF PURCHASE CONTRACT AGREEMENT
____________________
DATED AS OF ________ ___,
TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
Definitions and Other Provisions
of General Applications . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Compliance Certificates and Opinions. . . . . . . . 12
Section 1.3. Form of Documents Delivered to Agent. . . . . . . . 13
Section 1.4. Acts of Holders; Record Dates. . . . . . . . . . . 14
Section 1.5. Notices. . . . . . . . . . . . . . . . . . . . . . 16
Section 1.6. Notice to Holders; Waiver. . . . . . . . . . . . . 17
Section 1.7. Effect of Headings and Table of Contents. . . . . . 17
Section 1.8. Successors and Assigns. . . . . . . . . . . . . . . 18
Section 1.9. Separability Clause. . . . . . . . . . . . . . . . 18
Section 1.10. Benefits of Agreement. . . . . . . . . . . . . . . 18
Section 1.11. Governing Law. . . . . . . . . . . . . . . . . . . 18
Section 1.12. Legal Holidays. . . . . . . . . . . . . . . . . . . 18
Section 1.13. Counterparts. . . . . . . . . . . . . . . . . . . . 19
Section 1.14. Inspection of Agreement. . . . . . . . . . . . . . 19
ARTICLE II
Certificate Forms . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.1. Forms of Certificates Generally. . . . . . . . . . 19
Section 2.2. Form of Agent's Certificate of Authentication. . . 21
ARTICLE III
The Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.1. Title and Terms; Denominations. . . . . . . . . . . 21
Section 3.2. Rights and Obligations Evidenced by the Certificates.21
Section 3.3. Execution, Authentication, Delivery and Dating. . . 22
Section 3.4. Temporary Certificates. . . . . . . . . . . . . . . 23
Section 3.5. Registration; Registration of Transfer and Exchange. 24
Section 3.6. Book-Entry Interests. . . . . . . . . . . . . . . . 26
Section 3.7. Notices to Holders. . . . . . . . . . . . . . . . . 27
Section 3.8. Appointment of Successor Clearing Agency. . . . . . 27
Section 3.9. Definitive Certificates. . . . . . . . . . . . . . 27
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates. 27
Section 3.11. Persons Deemed Owners. . . . . . . . . . . . . . . 29
Section 3.12. Cancellation. . . . . . . . . . . . . . . . . . . . 29
Section 3.13. Establishment or Reestablishment of Growth PRIDES 30
Section 3.14. Establishment or Reestablishment of Income PRIDES. 32
Section 3.16. No Consent to Assumption. . . . . . . . . . . . . . 35
ARTICLE IV
The Preferred Securities . . . . . . . . . . . . . . . . . . . . . 35
Section 4.1. Payment of Distribution; Rights to Distributions
Preserved;
Distribution Rate Reset; Notice. . . . . . . . . . 35
Section 4.2. Notice and Voting. . . . . . . . . . . . . . . . . 37
Section 4.3. Distribution of Debentures; Tax Event Redemption . 37
ARTICLE V
The Purchase Contracts . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.1. Purchase of Shares of Common Stock. . . . . . . . . 39
Section 5.2. Contract Adjustment Payments. . . . . . . . . . . . 41
Section 5.3. Deferral of Payment Dates For Contract Adjustment
Payments. . . . . . . . . . . . . . . . . . . . . . 42
Section 5.4. Payment of Purchase Price. . . . . . . . . . . . . 43
Section 5.5. Issuance of Shares of Common Stock . . . . . . . . 48
Section 5.6. Adjustment of Settlement Rate . . . . . . . . . . . 49
Section 5.7. Notice of Adjustments and Certain Other Events . . 56
Section 5.8. Termination Event; Notice . . . . . . . . . . . . . 57
Section 5.9. Early Settlement . . . . . . . . . . . . . . . . . 57
Section 5.10. No Fractional Shares . . . . . . . . . . . . . . . 59
Section 5.11. Charges and Taxes . . . . . . . . . . . . . . . . . 60
ARTICLE VI
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock . . . 60
Section 6.2. Restoration of Rights and Remedies . . . . . . . . 61
Section 6.3. Rights and Remedies Cumulative . . . . . . . . . . 61
Section 6.4. Delay or Omission Not Waiver . . . . . . . . . . . 61
Section 6.5. Undertaking for Costs . . . . . . . . . . . . . . . 62
Section 6.6. Waiver of Stay or Extension Laws . . . . . . . . . 62
ARTICLE VII
The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.1. Certain Duties and Responsibilities . . . . . . . . 63
Section 7.2. Notice of Default . . . . . . . . . . . . . . . . . 64
Section 7.3. Certain Rights of Agent . . . . . . . . . . . . . . 64
Section 7.4. Not Responsible for Recitals or Issuance
of Securities 65
Section 7.5. May Hold Securities . . . . . . . . . . . . . . . . 65
Section 7.6. Money Held in Custody . . . . . . . . . . . . . . . 65
Section 7.7. Compensation and Reimbursement . . . . . . . . . . 66
Section 7.8. Corporate Agent Required; Eligibility . . . . . . . 66
Section 7.9. Resignation and Removal; Appointment of Successor . 67
Section 7.10. Acceptance of Appointment by Successor . . . . . . 68
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . 69
Section 7.12. Preservation of Information; Communications
to Holders. . . . . . . . . . . . . . . . . . . . . 69
Section 7.13. No Obligations of Agent . . . . . . . . . . . . . . 70
Section 7.14. Tax Compliance . . . . . . . . . . . . . . . . . . 70
ARTICLE VIII
Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . 71
Section 8.2. Supplemental Agreements with Consent of Holders . . 71
Section 8.3. Execution of Supplemental Agreements . . . . . . . 73
Section 8.4. Effect of Supplemental Agreements . . . . . . . . . 73
Section 8.5. Reference to Supplemental Agreements . . . . . . . 73
ARTICLE IX
Consolidation, Merger, Sale or Conveyance . . . . . . . . . . . . 74
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions . . . . . 74
Section 9.2. Rights and Duties of Successor Corporation . . . . 74
Section 9.3. Opinion of Counsel Given to Agent . . . . . . . . . 75
ARTICLE X
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 10.1. Performance Under Purchase Contracts . . . . . . . 75
Section 10.2. Maintenance of Office or Agency . . . . . . . . . . 75
Section 10.3. Company to Reserve Common Stock . . . . . . . . . . 76
Section 10.4. Covenants as to Common Stock . . . . . . . . . . . 76
Section 10.5. Statements of Officer of the Company as to Default 76
EXHIBIT A Form of Income PRIDES Certificate
EXHIBIT B Form of Growth PRIDES Certificate
EXHIBIT C Instructions to Collateral Agent
EXHIBIT D Instructions to Purchase Contract Agent
EXHIBIT E Notice to Settle with Separate Cash
PURCHASE CONTRACT AGREEMENT, dated as of _______ ___, between
Cendant Corporation, a Delaware corporation (the "Company"), and The First
National Bank of Chicago, a national banking association, acting as
purchase contract agent for the Holders of Securities from time to time
(the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of
this Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on
behalf of the Holders and delivered by the Agent, as provided in this
Agreement, the valid obligations of the Company, and to constitute these
presents a valid agreement of the Company, in accordance with its terms,
have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular; and nouns and pronouns of the masculine gender include the
feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(d) the following terms have the meanings given to them in
the Declaration: (i) Applicable Ownership Interest; (ii) Applicable
Principal Amount; (iii) Authorized Newspaper; (iv) Indenture, (v)
Investment Company Event; (vi) Liquidation Distribution; (vii) Preferred
Securities Guarantee; (viii) Primary Treasury Dealer; (ix) Quotation Agent;
(x) Redemption Amount; (xi) Redemption Price; (xii) Reset Agent; (xiii)
Reset Announcement Date; (xiv) Reset Rate; (xv) Reset Spread; (xvi) Tax
Event; (xvii) Tax Event Redemption; (xviii) Tax Event Redemption Date;
(xix) Two-Year Benchmark Treasury; (xx) Treasury Portfolio; and (xxi)
Treasury Portfolio Purchase Price; and
(e) the following terms have the meanings given to them in
this Section 1.1(e).
"Act" when used with respect to any Holder, has the meaning
specified in Section 1.4.
"Affiliate"has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first
paragraph of this instrument until a successor Agent shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter
"Agent" shall mean such Person.
"Agreement" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions
hereof.
"Applicable Market Value" has the meaning specified in Section
5.1.
"Bankruptcy Code" means title 11 of the United States Code, or
any other law of the United States that from time to time provides a
uniform system of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest,
a Person who is the beneficial owner of such Book-Entry Interest as
reflected on the books of the Clearing Agency or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Board of Directors" means the board of directors of the Company
or a duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification and delivered to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in New York City (in the State of
New York) are permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth
PRIDES Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a
nominee of that organization, shall be registered a Global Certificate and
which shall undertake to effect book entry transfers and pledges of the
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the
Pledge Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as Collateral
Agent under the Pledge Agreement until a successor Collateral Agent shall
have become such pursuant to the applicable provisions of the Pledge
Agreement, and thereafter "Collateral Agent" shall mean the Person who is
then the Collateral Agent thereunder.
"Collateral Substitution" has the meaning specified in Section
3.13.
"Common Stock" means the Common Stock, par value $0.01, of the
Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such
pursuant to the applicable provision of this Agreement, and thereafter
"Company" shall mean such successor.
"Contract Adjustment Payments" means the fee payable by the
Company in respect of each Purchase Contract, equal to % per annum of the
Stated Amount in the case of Income PRIDES and % per annum of the Stated
Amount in the case of Growth PRIDES, computed on the basis of a 360 day
year of twelve 30 day months, plus any Deferred Contract Adjustment
Payments accrued pursuant to Section 5.2.
"Corporate Trust Office" means the principal corporate trust
office of the Agent at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located
at One First National Plaza, Suite 0126, Chicago, IL 60670-0126, Attention:
Corporate Trust Services Division, except that for purposes of Section
10.2, such term shall mean the office or agency of the Agent in the Borough
of Manhattan, the City of New York, which office at the date hereof is
located at 14 Wall Street, Eighth Floor, New York, NY 10005.
"Coupon Rate" means the percentage rate per annum at which each
Debenture will bear interest initially.
"Current Market Price" has the meaning specified in Section
5.6(a)(8).
"Debentures" means the series of debentures of the Company
designated the ____% Debentures due February 16, 2003, to be issued under
the Indenture as of the date hereof.
"Declaration" means the Amended and Restated Agreement of Trust
of Cendant Capital II, dated ________ ___, _______, among the Company, as
the sponsor, the trustees named therein and the holders from time to time
of individual beneficial interests in the assets of the Trust.
"Deferred Contract Adjustment Payments" has the meaning specified
in Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section
5.9(a).
"Early Settlement Date" has the meaning specified in Section
5.9(a).
"Early Settlement Rate" has the meaning specified in Section
5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and
the rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Global Certificate" means a Certificate that evidences all or
part of the Securities and is registered in the name of a Depositary or a
nominee thereof.
"Global Preferred Security Certificate" means a certificate
evidencing the rights and obligations of a Holder in respect of the number
of Preferred Securities specified on such certificate and which is
registered in the name of a Clearing Agency or a nominee thereof.
"Growth PRIDES" means, following the substitution of one or more
Treasury Securities for Preferred Securities or for the Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, as
collateral to secure a holder's obligations under a Purchase Contract, the
collective rights and obligations of a holder of a Growth PRIDES
Certificate in respect of such Treasury Securities, subject in each case to
the Pledge thereof, and the related Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Growth
PRIDES specified on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means the Person
in whose name the Security evidenced by an Income PRIDES Certificate and/or
a Growth PRIDES Certificate is registered in the related Income PRIDES
Register and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a
Holder of an Income PRIDES Certificate in respect of a Preferred Security
or an appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, subject in each case to the Pledge thereof, and the
related Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Income
PRIDES specified on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Indenture" has the meaning set forth in Section 1.1 of the
Declaration.
"Indenture Trustee" means The Bank of Nova Scotia Trust Company
of New York, a national banking association, as trustee under the
Indenture, or any successor thereto.
"Institutional Trustee" means Wilmington Trust Company, as
institutional trustee under the Declaration, or any successor thereto that
is a financial institution unaffiliated with the Company.
"Issuer Order" or "Issuer Request" means a written order or
request signed in the name of the Company by its Chairman of the Board, any
Vice Chairman, its President or a Vice President and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by the
Chairman of the Board, any Vice Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or
any Assistant Secretary of the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an
Affiliate and who shall be reasonably acceptable to the Agent.
"Outstanding Securities," with respect to any Income PRIDES or
Growth PRIDES, means, as of the date of determination, all Income PRIDES or
Growth PRIDES evidenced by Certificates theretofore authenticated, executed
and delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Growth
PRIDES and (B) Income PRIDES for which the Stated Amount of the
related Preferred Security or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, or a Liquidation Distribution in
respect of such Preferred Security, as the case may be, has been
theretofore deposited with the Agent in trust for the Holders of such
Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by
Certificates theretofore cancelled by the Agent or delivered to the
Agent for cancellation or deemed cancelled pursuant to the provisions
of this Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by
Certificates in exchange for or in lieu of which other Certificates
have been authenticated, executed on behalf of the Holder and
delivered pursuant to this Agreement, other than any such Certificate
in respect of which there shall have been presented to the Agent proof
satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Income PRIDES or
Growth PRIDES evidenced by such Certificate are valid obligations
of the Company; provided, however, that in determining whether the Holders
of the requisite number of the Income PRIDES or Growth PRIDES have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Income PRIDES or Growth PRIDES owned by the Company or any
Affiliate of the Company shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Agent shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Income PRIDES or Growth PRIDES
which a Responsible Officer of the Agent knows to be so owned shall be so
disregarded. Income PRIDES or Growth PRIDES so owned which have been
pledged in good faith may be regarded as Outstanding Securities if the
pledgee establishes to the satisfaction of the Agent the pledgee's right so
to act with respect to such Income PRIDES or Growth PRIDES and that the
pledgee is not the Company or any Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and
November 16, commencing , .
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Permitted Investments" has the meaning set forth in Section 1 of
the Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the
Preferred Securities, the Treasury Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, in each case constituting a
part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the
date hereof, by and among the Company, the Collateral Agent and the Agent,
on its own behalf and as attorney-in-fact for the Holders from time to time
of the Securities.
"Predecessor Certificate" means a Predecessor Income PRIDES
Certificate or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth
PRIDES Certificate means every previous Growth PRIDES Certificate
evidencing all or a portion of the rights and obligations of the Company
and the Holder under the Growth PRIDES evidenced thereby; and, for the
purposes of this definition, any Growth PRIDES Certificate authenticated
and delivered under Section 3.10 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Growth PRIDES Certificate shall be deemed to
evidence the same rights and obligations of the Company and the Holder as
the mutilated, destroyed, lost or stolen Growth PRIDES Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income
PRIDES Certificate means every previous Income PRIDES Certificate
evidencing all or a portion of the rights and obligations of the Company
and the Holder under the Income PRIDES evidenced thereby; and, for the
purposes of this definition, any Income PRIDES Certificate authenticated
and delivered under Section 3.10 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Income PRIDES Certificate shall be deemed to
evidence the same rights and obligations of the Company and the Holder as
the mutilated, destroyed, lost or stolen Income PRIDES Certificate.
"Preferred Securities" means the ____% Trust Originated Preferred
Securities of the Trust, each having a stated liquidation amount of $50,
representing preferred undivided beneficial interests in the assets of the
Trust.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Purchase Contract," when used with respect to any Security,
means the contract forming a part of such Security and obligating the
Company to (i) sell and the Holder of such Security to purchase Common
Stock and (ii) pay the Holder Contract Adjustment Payments, if any, on the
terms and subject to the conditions set forth in Article Five hereof.
"Purchase Contract Settlement Date" means February 16, 2001.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section
5.6(a)(6).
"Record Date" for the distribution and Contract Adjustment
Payments payable on any Payment Date means, as to any Global Certificate,
the Business Day next preceding such Payment Date, and as to any other
Certificate, a day selected by the Company which shall be more than one
Business Day but less than 60 Business Days prior to such Payment Date.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth
PRIDES Registrar.
"Remarketing Agent" has the meaning specified in Section 5.4.
"Remarketing Agreement" means the Remarketing Agreement dated
_______ ___, _______ by and between the Company, the Trust, the Remarketing
Agent and the Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
"Remarketing Purchase Agreement" has the meaning specified in the
Remarketing Agreement.
"Reorganization Event" has the meaning specified in Section
5.6(b).
"Responsible Officer," when used with respect to the Agent, means
any officer of the Agent assigned by the Agent to administer its corporate
trust matters.
"Security" means an Income PRIDES or a Growth PRIDES.
"Senior Indebtedness" means indebtedness of any kind of the
Company unless the instrument under which such indebtedness is incurred
expressly provides that it is on parity with or subordinated in right of
payment to the Contract Adjustment Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $50.
"Termination Date" means the date, if any, on which a Termination
Event occurs.
"Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement
Date, a judgment, decree or court order shall have been entered granting
relief under the Bankruptcy Code, adjudicating the Company to be insolvent,
or approving as properly filed a petition seeking reorganization or
liquidation of the Company or any other similar applicable Federal or State
law, and, unless such judgment, decree or order shall have been entered
within 60 days prior to the Purchase Contract Settlement Date, such decree
or order shall have continued undischarged and unstayed for a period of 60
days; or (ii) a judgment, decree or court order for the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of the Company or of its property, or for the winding up or liquidation of
its affairs, shall have been entered, and, unless such judgment, decree or
order shall have been entered within 60 days prior to the Purchase Contract
Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days, or (iii) at any time on
or prior to the Purchase Contract Settlement Date the Company shall file a
petition for relief under the Bankruptcy Code, or shall consent to the
filing of a bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization or liquidation under the
Bankruptcy Code or any other similar applicable Federal or State law, or
shall consent to the filing of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in
Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means a 1/2 undivided beneficial interest in
a zero-coupon U.S. Treasury Securities (Cusip Number ) with a
principal amount of maturity equal to $1000 which mature on February 15,
2001.
"Trust" means Cendant Capital II, a statutory business trust
formed under the laws of the State of Delaware, or any successor thereto by
merger or consolidation.
"Underwriting Agreement" means the Underwriting Agreement dated
________ ___, _____ between the Company, the Trust, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Chase Securities Inc.
"Vice President" means any vice president, whether or not
designated by a number or a word or words added before or after the title
"vice president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon
any application or request by the Company to the Agent to take any action
under any provision of this Agreement, the Company shall furnish to the
Agent an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Agreement relating to the proposed action have
been complied with and, if requested by the Agent, an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions
precedent, if any, have been complied with, except that in the case of any
such application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation
as is necessary to enable such individual to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied
with.
Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary
that all such matters be certified by, or covered by the opinion of, only
one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect
to some matters and one or more other such Persons as to other matters, and
any such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be
consolidated and form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or
taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and (subject to
Section 7.1) conclusive in favor of the Agent and the Company, if made in
the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any manner which the Agent
deems sufficient.
(c) The ownership of Securities shall be proved by the
Income PRIDES Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate shall bind
every future Holder of the same Certificate and the Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Agent or the Company in reliance thereon,
whether or not notation of such action is made upon such Certificate.
(e) The Company may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Agreement to
be given, made or taken by Holders of Securities. If any record date is set
pursuant to this paragraph, the Holders of the Outstanding Income PRIDES
and the Outstanding Growth PRIDES, as the case may be, on such record date,
and no other Holders, shall be entitled to take the relevant action with
respect to the Income PRIDES or the Growth PRIDES, as the case may be,
whether or not such Holders remain Holders after such record date; provided
that no such action shall be effective hereunder unless taken on or prior
to the applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in
this paragraph shall be construed to render ineffective any action taken by
Holders of the requisite number of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration
Date to be given to the Agent in writing and to each Holder of Securities
in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to
time may change the Expiration Date to any earlier or later day; provided
that no such change shall be effective unless notice of the proposed new
Expiration Date is given to the Agent in writing, and to each Holder of
Securities in the manner set forth in Section 1.6, on or prior to the
existing Expiration Date. If an Expiration Date is not designated with
respect to any record date set pursuant to this Section, the Company shall
be deemed to have initially designated the 180th day after such record date
as the Expiration Date with respect thereto, subject to its right to change
the Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Agreement to be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing
and personally delivered or mailed, first-class postage prepaid,
to the Agent at The First National Bank of Chicago, One First
National Plaza, Suite 0126, Chicago, IL 60670-0126, Attention:
Corporate Trust Services Division, or at any other address
previously furnished in writing by the Agent to the Holders and
the Company; or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing
and personally delivered or mailed, first-class postage prepaid,
to the Company at Cendant Corporation, 9 West 57th Street, New
York, NY 10019, Attention: Corporate Secretary, or at any other
address previously furnished in writing to the Agent by the
Company; or
(3) the Collateral Agent by the Agent, the Company or
any Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if made, given,
furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, addressed to the Collateral Agent at
The Chase Manhattan Bank, 450 West 33rd Street, 15th Floor, New
York, NY 10001, Attention: Corporate Trust Administration, or at
any other address previously furnished in writing by the
Collateral Agent to the Agent, the Company and the Holders; or
(4) the Institutional Trustee by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing
and personally delivered or mailed, first-class postage prepaid,
addressed to the Institutional Trustee at Wilmington Trust
Company [ ], Attention: Corporate Trust Services Division, or at
any other address previously furnished in writing by the
Institutional Trustee to the Company; or
(5) the Indenture Trustee by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing
and personally delivered or mailed, first-class postage prepaid,
addressed to the Indenture Trustee at [ ] or at any other address
previously furnished in writing by the Indenture Trustee to the
Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at its address as it appears in the
applicable Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Agreement provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Agent, but
such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the
Agent shall constitute a sufficient notification for every purpose
hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in
any way be affected or impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this
Agreement. The Holders from time to time shall be beneficiaries of this
Agreement and shall be bound by all of the terms and conditions hereof and
of the Securities evidenced by their Certificates by their acceptance of
delivery of such Certificates.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day,
then (notwithstanding any other provision of this Agreement or the Income
PRIDES Certificates or the Growth PRIDES Certificates) payment of the
Contract Adjustment Payments, if any, shall not be made on such date, but
such payments shall be made on the next succeeding Business Day with the
same force and effect as if made on such Payment Date, provided that no
interest shall accrue or be payable by the Company or any Holder for the
period from and after any such Payment Date, except that, if such next
succeeding Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day with the
same force and effect as if made on such Payment Date.
In any case where any Purchase Contract Settlement Date shall not
be a Business Day, then (notwithstanding any other provision of this
Agreement, the Income PRIDES Certificates or the Growth PRIDES
Certificates), the Purchase Contracts shall not be performed on such date,
but the Purchase Contracts shall be performed on the immediately following
Business Day with the same force and effect as if performed on the Purchase
Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by
the parties hereto on separate counterparts, each of which, when so
executed and delivered, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable
times during normal business hours at the Corporate Trust Office for
inspection by any Holder.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase
Contract forming part of the Income PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required
by the rules of any securities exchange on which the Income PRIDES are
listed or any depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Income PRIDES
Certificates, as evidenced by their execution of the Income PRIDES
Certificates.
The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in
any other manner, all as determined by the officers of the Company
executing the Income PRIDES evidenced by such Income PRIDES Certificates,
consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
The Growth PRIDES Certificates (including the form of Purchase
Contracts forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required
by the rules of any securities exchange on which the Growth PRIDES may be
listed or any depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Growth PRIDES
Certificates, as evidenced by their execution of the Growth PRIDES
Certificates.
The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in
any other manner, all as determined by the officers of the Company
executing the Growth PRIDES evidenced by such Growth PRIDES Certificates,
consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND
NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN
THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the
Income PRIDES shall be in substantially the form set forth on the form of
the Income PRIDES Certificates.
The form of the Agent's certificate of authentication of the
Growth PRIDES shall be in substantially the form set forth on the form of
the Growth PRIDES Certificates.
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to except for Certificates authenticated, executed and delivered
upon registration of transfer of, in exchange for, or in lieu of, other
Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and
only in denominations of a single Income PRIDES or Growth PRIDES and any
integral multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the Certificates.
Each Income PRIDES Certificate shall evidence the number of
Income PRIDES specified therein, with each such Income PRIDES representing
the ownership by the Holder thereof of a beneficial interest in a Preferred
Security or the Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, subject to the Pledge of such Preferred Security or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, by such Holder pursuant to the Pledge Agreement, and the rights and
obligations of the Holder thereof and the Company under one Purchase
Contract. The Agent as attorney-in-fact for, and on behalf of, the Holder
of each Income PRIDES shall pledge, pursuant to the Pledge Agreement, the
Preferred Security or the Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, forming a part of such Income PRIDES, to the
Collateral Agent and grant to the Collateral Agent a security interest in
the right, title, and interest of such Holder in such Preferred Security or
the Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, for the benefit of the Company, to secure the obligation of the
Holder under each Purchase Contract to purchase the Common Stock of the
Company. Prior to the purchase of shares of Common Stock under each
Purchase Contract, such Purchase Contracts shall not entitle the Holder of
an Income PRIDES Certificates to any of the rights of a holder of shares of
Common Stock, including, without limitation, the right to vote or receive
any dividends or other payments or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or for the election
of directors of the Company or for any other matter, or any other rights
whatsoever as stockholders of the Company.
Each Growth PRIDES Certificate shall evidence the number of
Growth PRIDES specified therein, with each such Growth PRIDES representing
the ownership by the Holder thereof of a 1/20 undivided beneficial interest
in a Treasury Security with a principal amount equal to $1,000 subject to
the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. Prior to the purchase, if any, of
shares of Common Stock under the Purchase Contracts, such Growth PRIDES
Certificates shall not entitle the Holders of Growth PRIDES Certificates to
any of the rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments or
to consent or to receive notice as stockholders in respect of the meetings
of stockholders or for the election of directors of the Company or for any
other matter, or any other rights whatsoever as stockholders of the
Company.
Section 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon
the execution and delivery of this Agreement, and at any time and from time
to time thereafter, the Company may deliver Certificates executed by the
Company to the Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Agent in accordance with such Issuer Order shall
authenticate, execute on behalf of the Holders and deliver such
Certificates.
The Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President or
one of its Vice Presidents or Treasurer. The signature of any of these
officers on the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
such Certificates or did not hold such offices at the date of such
Certificates.
No Purchase Contract evidenced by a Certificate shall be valid
until such Certificate has been executed on behalf of the Holder by the
manual signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent
shall be conclusive evidence that the Holder of such Certificate has
entered into the Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on
such Certificate a certificate of authentication substantially in the form
provided for herein executed by an authorized signatory of the Agent by
manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holders, and deliver, in lieu of such definitive
Certificates, temporary Certificates which are in substantially the form
set forth in Exhibit A or Exhibit B hereto, as the case may be, with such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Income PRIDES
or Growth PRIDES are listed, or as may, consistently herewith, be
determined by the officers of the Company executing such Certificates, as
evidenced by their execution of the Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After
the preparation of definitive Certificates, the temporary Certificates
shall be exchangeable for definitive Certificates upon surrender of the
temporary Certificates at the Corporate Trust Office, at the expense of the
Company and without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Certificates, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf
of the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number
of Income PRIDES or Growth PRIDES, as the case may be, as the temporary
Certificate or Certificates so surrendered. Until so exchanged, the
temporary Certificates shall in all respects evidence the same benefits and
the same obligations with respect to the Income PRIDES or Growth PRIDES, as
the case may be, evidenced thereby as definitive Certificates.
Section 3.5. Registration; Registration of Transfer and Exchange.
The Agent shall keep at the Corporate Trust Office a register
(the "Income PRIDES Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide for the
registration of Income PRIDES Certificates and of transfers of Income
PRIDES Certificates (the Agent, in such capacity, the "Income PRIDES
Registrar") and a Register (the "Growth PRIDES Register") in which, subject
to such reasonable regulations as it may prescribe, the Agent shall provide
for the registration of the Growth PRIDES Certificates and transfers of
Growth PRIDES Certificates (the Agent, in such capacity, the "Growth PRIDES
Registrar").
Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the
designated transferee or transferees, and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be.
At the option of the Holder, Certificates may be exchanged for
other Certificates, of any authorized denominations and evidencing a like
number of Income PRIDES or Growth PRIDES, as the case may be, upon
surrender of the Certificates to be exchanged at the Corporate Trust
Office. Whenever any Certificates are so surrendered for exchange, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same number
of Income PRIDES or Growth PRIDES, as the case may be, and be entitled to
the same benefits and subject to the same obligations, under this Agreement
as the Income PRIDES or Growth PRIDES, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Agent duly executed, by the Holder
thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of a Certificate, but the Company and the Agent may require
payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration
of transfer or exchange of Certificates, other than any exchanges pursuant
to Sections 3.6 and 8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated
to execute and deliver to the Agent, and the Agent shall not be obligated
to authenticate, execute on behalf of the Holder and deliver any
Certificate presented or surrendered for registration of transfer or for
exchange on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent shall (i)
if the Purchase Contract Settlement Date has occurred, deliver the shares
of Common Stock issuable in respect of the Purchase Contracts forming a
part of the Securities evidenced by such Certificate, (ii) in the case of
Income PRIDES, if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the aggregate Stated Amount of
the Preferred Securities or the Treasury Portfolio, as applicable,
evidenced thereby, or (iii) in the case of Growth PRIDES, if a Termination
Event shall have occurred prior to the Purchase Contract Settlement Date,
transfer the Treasury Securities evidenced thereby, in each case subject to
the applicable conditions and in accordance with the applicable provisions
of Article Five hereof.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the
form of one or more, fully registered Global Certificates, to be delivered
to the Depositary by, or on behalf of, the Company. Such Global Certificate
shall initially be registered on the books and records of the Company in
the name of Cede & Co., the nominee of the Depositary, and no Beneficial
Owner will receive a definitive Certificate representing such Beneficial
Owner's interest in such Global Certificate, except as provided in Section
3.9. The Agent shall enter into an agreement with the Depositary if so
requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full
force and effect;
(b) the Company shall be entitled to deal with the Clearing
Agency for all purposes of this Agreement (including the payment of
Contract Adjustment Payments, if any, and receiving approvals, votes or
consents hereunder) as the Holder of the Securities and the sole holder of
the Global Certificate(s) and shall have no obligation to the Beneficial
Owners;
(c) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions of
this Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established
by law and agreements between such Beneficial Owners and the Clearing
Agency and/or the Clearing Agency Participants. The Clearing Agency will
make book entry transfers among Clearing Agency Participants and receive
and transmit payments of Contract Adjustment Payments to such Clearing
Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company or the Company's
agent shall give such notices and communications to the Holders and, with
respect to any Securities registered in the name of a Clearing Agency or
the nominee of a Clearing Agency, the Company or the Company's agent shall,
except as set forth herein, have no obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities, the Company may, in
its sole discretion, appoint a successor Clearing Agency with respect to
the Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 3.8, (ii) the Company elects to terminate the book-
entry system through the Clearing Agency with respect to the Securities, or
(iii) there shall have occurred and be continuing a default by the Company
in respect of its obligations under one or more Purchase Contracts, then
upon surrender of the Global Certificates representing the Book-Entry
Interests with respect to the Securities by the Clearing Agency,
accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in accordance
with the instructions of the Clearing Agency. The Company shall not be
liable for any delay in delivery of such instructions and may conclusively
rely on and shall be protected in relying on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Agent, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, a new Certificate at the cost of the Holder, evidencing the same
number of Income PRIDES or Growth PRIDES, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) such security or indemnity at the cost of the Holder
as may be required by them to hold each of them and any agent of any of
them harmless, then, in the absence of notice to the Company or the Agent
that such Certificate has been acquired by a bona fide purchaser, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver to the Holder,
in lieu of any such destroyed, lost or stolen Certificate, a new
Certificate, evidencing the same number of Income PRIDES or Growth PRIDES,
as the case may be, and bearing a Certificate number not contemporaneously
outstanding.
Notwithstanding the foregoing, the Company shall not be obligated
to execute and deliver to the Agent, and the Agent shall not be obligated
to authenticate, execute on behalf of the Holder, and deliver to the
Holder, a Certificate on or after the Business Day immediately preceding
the earlier of the Purchase Contract Settlement Date or the Termination
Date. In lieu of delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the
Agent shall (i) if the Purchase Contract Settlement Date has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Securities evidenced by such Certificate,
or (ii) if a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Preferred Securities, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Treasury Securities, as the case may be, evidenced thereby, in each case
subject to the applicable conditions and in accordance with the applicable
provisions of Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Certificate shall constitute an original
additional contractual obligation of the Company and of the Holder in
respect of the Security evidenced thereby, whether or not the destroyed,
lost or stolen Certificate (and the Securities evidenced thereby) shall be
at any time enforceable by anyone, and shall be entitled to all the
benefits and be subject to all the obligations of this Agreement equally
and proportionately with any and all other Certificates delivered
hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of
transfer, the Company and the Agent, and any agent of the Company or the
Agent, may treat the Person in whose name such Certificate is registered as
the owner of the Income PRIDES or Growth PRIDES evidenced thereby, for the
purpose of receiving distributions on the Preferred Securities or on the
maturing quarterly interest strips of the Treasury Portfolio, as
applicable, receiving payments of Contract Adjustment Payments, performance
of the Purchase Contracts and for all other purposes whatsoever, whether or
not any distributions on the Preferred Securities or the Contract
Adjustment Payments payable in respect of the Purchase Contracts
constituting a part of the Income PRIDES or Growth PRIDES evidenced thereby
shall be overdue and notwithstanding any notice to the contrary, and
neither the Company nor the Agent, nor any agent of the Company or the
Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the Agent or any
agent of the Company or the Agent, from giving effect to any written
certification, proxy or other authorization furnished by any Clearing
Agency (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Clearing Agency and owners of
beneficial interests in such Global Certificate, the operation of customary
practices governing the exercise of rights of such Clearing Agency (or its
nominee) as Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common
Stock on or after the Purchase Contract Settlement Date, upon the transfer
of Preferred Securities, the appropriate Applicable Ownership Interest of
the Treasury Portfolio or Treasury Securities, as the case may be, after
the occurrence of a Termination Event or pursuant to an Early Settlement,
or upon the registration of a transfer or exchange of a Security, or a
Collateral Substitution or the re-establishment of an Income PRIDES shall,
if surrendered to any Person other than the Agent, be delivered to the
Agent and, if not already cancelled, shall be promptly cancelled by it. The
Company may at any time deliver to the Agent for cancellation any
Certificates previously authenticated, executed and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon Issuer Order, be promptly cancelled
by the Agent. No Certificates shall be authenticated, executed on behalf of
the Holder and delivered in lieu of or in exchange for any Certificates
cancelled as provided in this Section, except as expressly permitted by
this Agreement. All cancelled Certificates held by the Agent shall be
destroyed by the Agent unless otherwise directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section 3.13. Establishment or Reestablishment of Growth PRIDES
A Holder may separate the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as applicable,
from the related Purchase Contracts in respect of an Income PRIDES by
substituting for such Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, Treasury
Securities in an aggregate principal amount equal to the aggregate Stated
Amount of such Preferred Securities or for the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio, as applicable (a "Collateral
Substitution"), at any time from and after the date of this Agreement and
on or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date in the case of the Preferred Securities and on or
prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date in the case of the appropriate Applicable
Ownership Interest of the Treasury Portfolio, in each case by (a)
depositing with the Collateral Agent Treasury Securities having an
aggregate principal amount equal to the aggregate Stated Amount of the
Preferred Securities comprising part of such Income PRIDES or for the
appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio comprising part of
such Income PRIDES, as the case may be, and (b) (i) in the event that
Contract Adjustment Payments are at a higher rate for Income PRIDES than
for Growth PRIDES, by delivering cash in an amount equal to the excess of
the Contract Adjustment Payments that would have accrued since the last
Payment Date through the date of substitution on the Growth PRIDES being
created by the holder, over the Contract Adjustment Payments that have
accrued over the same time period on the related Income PRIDES, which
amount the Agent shall promptly remit to the Company, and (ii) transferring
the related Income PRIDES to the Agent accompanied by a notice to the
Agent, substantially in the form of Exhibit D hereto, stating that the
Holder has transferred the relevant amount of Treasury Securities to the
Collateral Agent and requesting that the Agent instruct the Collateral
Agent to release the Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
underlying such Income PRIDES, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of Exhibit C
hereto. Upon receipt of the Treasury Securities described in clause (a)
above and the instruction described in clause (b) above, in accordance with
the terms of the Pledge Agreement, the Collateral Agent will release to the
Agent, on behalf of the Holder, Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, having a corresponding aggregate Stated Amount of such Preferred
Securities or the appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, as
the case may be, from the Pledge, free and clear of the Company's security
interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, to the Holder; and
(iii) authenticate, execute on behalf of
such Holder and deliver a Growth PRIDES Certificate executed by
the Company in accordance with Section 3.3 evidencing the same
number of Purchase Contracts as were evidenced by the cancelled
Income PRIDES.
Holders who elect to separate the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, from the related Purchase Contract and to substitute Treasury
Securities for such Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, shall be
responsible for any fees or expenses payable to the Collateral Agent for
its services as Collateral Agent in respect of the substitution, and the
Company shall not be responsible for any such fees or expenses.
Holders may make Collateral Substitutions (i) only in integral
multiples of 20 Income PRIDES if Preferred Securities are being substituted
by Treasury Securities, or (ii) only in integral multiples of 160,000
Income PRIDES if the appropriate Applicable Ownership Interests of the
Treasury Portfolio are being substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution pursuant
to this Section 3.13 fails to effect a book-entry transfer of the Income
PRIDES or fails to deliver an Income PRIDES Certificate(s) to the Agent
after depositing Treasury Securities with the Collateral Agent, the
Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, constituting a part of such
Income PRIDES, and any distributions on such Preferred Security or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, shall be held in the name of the Agent or its nominee in trust for the
benefit of such Holder, until such Income PRIDES is so transferred or the
Income PRIDES Certificate is so delivered, as the case may be, or, with
respect to an Income PRIDES Certificate, such Holder provides evidence
satisfactory to the Company and the Agent that such Income PRIDES
Certificate has been destroyed, lost or stolen, together with any indemnity
that may be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the
Purchase Contract underlying an Income PRIDES remains in effect, such
Income PRIDES shall not be separable into its constituent parts, and the
rights and obligations of the Holder in respect of the Preferred Securities
or the appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, and Purchase Contract comprising such Income PRIDES may
be acquired, and may be transferred and exchanged, only as an Income
PRIDES.
Section 3.14. Establishment or Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may create or recreate Income PRIDES
at any time (i) on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date, if a Tax Event Redemption has not
occurred, and (ii) on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, if a Tax Event Redemption
has occurred, in each case by (a) depositing with the Collateral Agent
Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, having an aggregate Stated
Amount in the case of the Preferred Securities, or an appropriate
Applicable Ownership Interest (as defined in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be, equal to the
aggregate principal amount of the Treasury Securities comprising part of
the Growth PRIDES and (b) (i) in the event that Contract Adjustment
Payments are at a higher rate for Income PRIDES than for Growth PRIDES, by
delivering to the Agent cash in an amount equal to the excess of the
Contract Adjustment Payments that would have accrued since the last payment
date through the date of substitution on the Income PRIDES being created or
recreated by such holders, over the Contract Adjustment Payments that have
accrued over the same time period on the related Growth PRIDES transferring
the related Growth PRIDES to the Agent accompanied by a notice to the
Agent, substantially in the form of Exhibit D hereto, stating that the
Holder has transferred the relevant amount of Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, to the Collateral Agent and requesting that the Agent instruct
the Collateral Agent to release the Treasury Securities underlying such
Growth PRIDES, whereupon the Agent shall promptly give such instruction to
the Collateral Agent, substantially in the form of Exhibit C hereto. Upon
receipt of the Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, described in clause
(a) above and the instruction described in clause (b) above, in accordance
with the terms of the Pledge Agreement, the Collateral Agent will effect
the release of the Treasury Securities having a corresponding aggregate
principal amount from the Pledge to the Agent free and clear of the
Company's security interest therein, and upon receipt thereof the Agent
shall promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the
Holder; and
(iii) authenticate, execute on behalf of
such Holder and deliver an Income PRIDES Certificate executed by
the Company in accordance with Section 3.3 evidencing the same
number of Purchase Contracts as were evidenced by the cancelled
Growth PRIDES.
Holders of Growth PRIDES may establish or reestablish Income
PRIDES in integral multiples of 20 Growth PRIDES for 20 Income PRIDES if a
Tax Event Redemption has not occurred, and in integral multiples of 160,000
Growth PRIDES for 160,000 Income PRIDES if a Tax Event Redemption has
occurred.
Except as provided in this Section 3.14, for so long as the
Purchase Contract underlying a Growth PRIDES remains in effect, such Growth
PRIDES shall not be separable into its constituent parts and the rights and
obligations of the Holder of such Growth PRIDES in respect of the Treasury
Security and Purchase Contract comprising such Growth PRIDES may be
acquired, and may be transferred and exchanged only as a Growth PRIDES.
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to
the Agent of the Preferred Securities, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or the Treasury Securities, as the case
may be, underlying the Income PRIDES and the Growth PRIDES pursuant to the
terms of the Pledge Agreement, the Agent shall request transfer
instructions with respect to such Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, from each Holder by written request mailed
to such Holder at its address as it appears in the Income PRIDES Register
or the Growth PRIDES Register, as the case may be. Upon book-entry transfer
of the Income PRIDES or Growth PRIDES or delivery of an Income PRIDES
Certificate or Growth PRIDES Certificate to the Agent with such transfer
instructions, the Agent shall transfer the Preferred Securities, the
Treasury Portfolio or Treasury Securities, as the case may be, underlying
such Income PRIDES or Growth PRIDES, as the case may be, to such Holder by
book-entry transfer, or other appropriate procedures, in accordance with
such instructions. In the event a Holder of Income PRIDES or Growth PRIDES
fails to effect such transfer or delivery, the Preferred Securities, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, underlying such Income PRIDES or
Growth PRIDES, as the case may be, and any distributions thereon, shall be
held in the name of the Agent or its nominee in trust for the benefit of
such Holder, until such Income PRIDES or Growth PRIDES are transferred or
the Income PRIDES Certificate or Growth PRIDES Certificate is surrendered
or such Holder provides satisfactory evidence that such Income PRIDES
Certificate or Growth PRIDES Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and
the Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365
of the Bankruptcy Code or otherwise, of the Purchase Contract by the
Company, receiver, liquidator or a person or entity performing similar
functions, its trustee in the event that the Company becomes the debtor
under the Bankruptcy Code or subject to other similar state or federal law
providing for reorganization or liquidation.
ARTICLE IV
The Preferred Securities
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice.
A distribution on any Preferred Security or on the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may
be, which is paid on any Payment Date shall, subject to receipt thereof by
the Agent from the Collateral Agent as provided by the terms of the Pledge
Agreement, be paid to the Person in whose name the Income PRIDES
Certificate (or one or more Predecessor Income PRIDES Certificates) of
which such Preferred Security or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, is a part is
registered at the close of business on the Record Date for such Payment
Date.
Each Income PRIDES Certificate evidencing Preferred Securities
delivered under this Agreement upon registration of transfer of or in
exchange for or in lieu of any other Income PRIDES Certificate shall carry
the rights to distributions accrued and unpaid, and to accrue
distributions, which were carried by the Preferred Securities underlying
such other Income PRIDES Certificate.
In the case of any Income PRIDES with respect to which Cash
Settlement of the underlying Purchase Contract is effected on the Business
Day immediately preceding the Purchase Contract Settlement Date pursuant to
prior notice, or with respect to which Early Settlement of the underlying
Purchase Contract is effected on a Early Settlement Date, or with respect
to which a Collateral Substitution is effected, in each case on a date that
is after any Record Date and on or prior to the next succeeding Payment
Date, distributions on the Preferred Securities or on the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, underlying such Income PRIDES otherwise payable on such Payment Date
shall be payable on such Payment Date notwithstanding such Cash Settlement
or Early Settlement or Collateral Substitution, and such distributions
shall, subject to receipt thereof by the Agent, be payable to the Person in
whose name the Income PRIDES Certificate (or one or more Predecessor Income
PRIDES Certificates) was registered at the close of business on the Record
Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Income PRIDES with respect to which Cash
Settlement or Early Settlement of the underlying Purchase Contract is
effected on the Business Day immediately preceding the Purchase Contract
Settlement Date or an Early Settlement Date, as the case may be, or with
respect to which a Collateral Substitution has been effected, distributions
on the related Preferred Securities or on the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, that
would otherwise be payable after the Purchase Contract Settlement Date or
Early Settlement Date shall not be payable hereunder to the Holder of such
Income PRIDES; provided, however, that to the extent that such Holder
continues to hold the separated Preferred Securities that formerly
comprised a part of such Holder's Income PRIDES, such Holder shall be
entitled to receive the distributions on such separated Preferred
Securities.
The applicable Coupon Rate on the Preferred Securities on and
after the Purchase Contract Settlement Date will be reset on the third
Business Day immediately preceding the Purchase Contract Settlement Date to
the Reset Rate (such Reset Rate to be in effect on and after the purchase
Contract Settlement Date). On the Reset Announcement Date the Reset Spread
and the Two-Year Benchmark Treasury to be used to determine the Reset Rate
will be announced by the Company. On the Business Day immediately following
the Reset Announcement Date, the Preferred Securities Holders will be
notified of such Reset Spread and Two-Year Benchmark Treasury by the
Company. Such notice shall be sufficiently given to Holders of Preferred
Securities if published in an Authorized Newspaper in The City of New York.
Not later than 10 calendar days nor more than 15 calendar days
prior to the Reset Announcement Date, the Company will notify the DTC or
its nominee (or any successor Clearing Agency or its nominee) by first-
class mail, postage prepaid, to notify the Beneficial Owners or Clearing
Agency Participants holding Income PRIDES or Growth PRIDES, of such Reset
Announcement Date and the procedures to be followed by such Holders of
Income PRIDES who intend to settle their obligation under the Purchase
Contract with separate cash on the Purchase Contract Settlement Date.
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining
to the Preferred Securities pledged with the Collateral Agent but only to
the extent instructed by the Holders as described below. Upon receipt of
notice of any meeting at which holders of Preferred Securities are entitled
to vote or upon any solicitation of consents, waivers or proxies of holders
of Preferred Securities, the Agent shall, as soon as practicable
thereafter, mail to the Holders of Income PRIDES a notice (a) containing
such information as is contained in the notice or solicitation, (b) stating
that each Holder on the record date set by the Agent therefor (which, to
the extent possible, shall be the same date as the record date for
determining the holders of Preferred Securities entitled to vote) shall be
entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Preferred Securities underlying their Income PRIDES and
(c) stating the manner in which such instructions may be given. Upon the
written request of the Holders of Income PRIDES on such record date, the
Agent shall endeavor insofar as practicable to vote or cause to be voted,
in accordance with the instructions set forth in such requests, the maximum
number of Preferred Securities as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of an Income PRIDES, the Agent shall abstain from voting the
Preferred Security underlying such Income PRIDES. The Company hereby
agrees, if applicable, to solicit Holders of Income PRIDES to timely
instruct the Agent in order to enable the Agent to vote such Preferred
Securities and the Trust shall covenant to such effect in the Declaration.
Section 4.3. Distribution of Debentures; Tax Event Redemption
Upon the occurrence of an Investment Company Event or a
liquidation of the Trust in accordance with the Declaration, a principal
amount of Debentures constituting the assets of the Trust and underlying
the Preferred Securities equal to the aggregate Stated Amount of the
Pledged Preferred Securities shall be delivered to the Collateral Agent in
exchange for the Pledged Preferred Securities. Thereafter, the Debentures
will be substituted for the Pledged Preferred Securities, and will be held
by the Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligations of each Holder of an Income PRIDES to
purchase the Common Stock of the Company under the Purchase Contracts
constituting a part of such Income PRIDES. Following the occurrence of an
Investment Company Event or a liquidation of the Trust, the Holders and the
Collateral Agent shall have such security interests, rights and obligations
with respect to the Debentures as the Holders and the Collateral Agent had
in respect of the Preferred Securities subject to the Pledge thereof as
provided in Articles II, III, IV, V and VI of the Pledge Agreement, and any
reference herein to the Preferred Securities shall be deemed to be a
reference to such Debentures. The Company may cause to be made in any
Income PRIDES Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to
reflect the liquidation of the Trust and the substitution of Debentures for
Preferred Securities as Collateral.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable on the Tax
Event Redemption Date with respect to the Applicable Principle Amount of
Debentures shall be delivered to the Collateral Agent in exchange for the
Pledged Preferred Securities. Thereafter, pursuant to the terms of the
Pledge Agreement, the Collateral Agent will apply an amount equal to the
Redemption Amount of such Redemption Price to purchase on behalf of the
Holders of Income PRIDES the Treasury Portfolio and promptly remit the
remaining portion of such Redemption Price to the Agent for payment to the
Holders of such Income PRIDES. The Treasury Portfolio will be substituted
for the Pledged Preferred Securities, and will be held by the Collateral
Agent in accordance with the terms of the Pledge Agreement to secure the
obligation of each Holder of an Income PRIDES to purchase the Common Stock
of the Company under the Purchase Contract constituting a part of such
Income PRIDES. Following the occurrence of a Tax Event Redemption prior to
the Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests, rights and obligations
with respect to the Treasury Portfolio as the Holder of Income PRIDES and
the Collateral Agent had in respect of the Preferred Security or
Debentures, as the case may be, subject to the Pledge thereof as provided
in Articles II, III, IV, V, and VI of the Pledge Agreement, and any
reference herein to the Preferred Security or the Debenture shall be deemed
to be reference to such Treasury Portfolio. The Company may cause to be
made in any Income PRIDES Certificates thereafter to be issued such change
in phraseology and form (but not in substance) as may be appropriate to
reflect the liquidation of the Trust and the substitution of the Treasury
Portfolio for Preferred Securities or Debentures as collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has
occurred in accordance with Section 5.9 hereof, obligate the Holder of the
related Security to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price"), a number of newly issued shares of Common Stock equal to
the Settlement Rate unless, on or prior to the Purchase Contract Settlement
Date, there shall have occurred a Termination Event with respect to the
Security of which such Purchase Contract is a part. The "Settlement Rate"
is equal to (a) if the Applicable Market Value (as defined below) is equal
to or greater than $_____ (the "Threshold Appreciation Price"), _____
shares of Common Stock per Purchase Contract, (b) if the Applicable Market
Value is less than the Threshold Appreciation Price, but is greater than
$_____, the number of shares of Common Stock equal to the Stated Amount
divided by the Applicable Market Value and (c) if the Applicable Market
Value is less than or equal to $_____, _____ shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in
Section 5.6 (and in each case rounded upward or downward to the nearest
1/10,000th of a share). As provided in Section 5.10, no fractional shares
of Common Stock will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing
Price per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date. The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on the New York
Stock Exchange (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange
on which the Common Stock is so listed, or if the Common Stock is not so
listed on a United States national or regional securities exchange, as
reported by The Nasdaq Stock Market, or, if the Common Stock is not so
reported, the last quoted bid price for the Common Stock in the over-the-
counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of
the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, by its
acceptance thereof, irrevocably authorizes the Agent to enter into and
perform the related Purchase Contract on its behalf as its attorney-in-fact
(including the execution of Certificates on behalf of such Holder), agrees
to be bound by the terms and provisions thereof, covenants and agrees to
perform its obligations under such Purchase Contracts, and consents to the
provisions hereof, irrevocably authorizes the Agent as its attorney-in-fact
to enter into and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to and agrees to be bound by the Pledge of
the Preferred Securities, the Treasury Portfolio or the Treasury Securities
pursuant to the Pledge Agreement; provided that upon a Termination Event,
the rights of the Holder of such Security under the Purchase Contract may
be enforced without regard to any other rights or obligations. Each Holder
of an Income PRIDES or a Growth PRIDES, by its acceptance thereof, further
covenants and agrees, that, to the extent and in the manner provided in
Section 5.4 and the Pledge Agreement, but subject to the terms thereof,
payments in respect of the Stated Amount of the Preferred Securities or the
Proceeds of the Treasury Securities or the Treasury Portfolio on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to
the Company in satisfaction of such Holder's obligations under such
Purchase Contract and such Holder shall acquire no right, title or interest
in such payments.
Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of
such transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor
shall be released from the obligations under this Agreement, the Purchase
Contracts underlying the Certificates so transferred and the Pledge
Agreement. The Company covenants and agrees, and each Holder of a
Certificate, by its acceptance thereof, likewise covenants and agrees, to
be bound by the provisions of this paragraph.
Section 5.2. Contract Adjustment Payments.
Subject to Section 5.3 herein, the Company shall pay, on each
Payment Date, the Contract Adjustment Payments payable in respect of each
Purchase Contract to the Person in whose name a Certificate (or one or more
Predecessor Certificates) is registered at the close of business on the
Record Date next preceding such Payment Date. The Contract Adjustment
Payments will be payable at the office of the Agent in The City of New York
maintained for that purpose or, at the option of the Company, by check
mailed to the address of the Person entitled thereto at such Person's
address as it appears on the Income PRIDES Register or Growth PRIDES
Register.
Upon the occurrence of a Termination Event, the Company's
obligation to pay Contract Adjustment Payments (including any accrued or
Deferred Contract Adjustment Payments) shall cease.
Each Certificate delivered under this Agreement upon registration
of transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of an Income PRIDES) any
other Certificate shall carry the rights to Contract Adjustment Payments
accrued and unpaid, and to accrue Contract Adjustment Payments, which were
carried by the Purchase Contracts underlying such other Certificates.
Subject to Section 5.9, in the case of any Security with respect
to which Early Settlement of the underlying Purchase Contract is effected
on an Early Settlement Date that is after any Record Date and on or prior
to the next succeeding Payment Date, Contract Adjustment Payments, if any,
otherwise payable on such Payment Date shall be payable on such Payment
Date notwithstanding such Early Settlement, and such Contract Adjustment
Payments shall be paid to the Person in whose name the Certificate
evidencing such Security (or one or more Predecessor Certificates) is
registered at the close of business on such Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the
case of any Security with respect to which Early Settlement of the
underlying Purchase Contract is effected on an Early Settlement Date,
Contract Adjustment Payments that would otherwise be payable after the
Early Settlement Date with respect to such Purchase Contract shall not be
payable.
The Company's obligations with respect to Contract Adjustment
Payments, will be subordinated and junior in right of payment to the
Company's obligations under any Senior Indebtedness.
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the payment of any or all of
the Contract Adjustment Payments otherwise payable on any Payment Date, but
only if the Company shall give the Holders and the Agent written notice of
its election to defer such payment (specifying the amount to be deferred)
at least ten Business Days prior to the earlier of (i) the next succeeding
Payment Date or (ii) the date the Company is required to give notice of the
Record Date or Payment Date with respect to payment of such Contract
Adjustment Payments to the New York Stock Exchange or other applicable
self-regulatory organization or to Holders of the Securities, but in any
event not less than one Business Day prior to such Record Date. Any
Contract Adjustment Payments so deferred shall bear additional Contract
Adjustment Payments thereon at the rate of ____% per annum (computed on the
basis of 360 day year of twelve 30 day months), compounding on each
succeeding Payment Date, until paid in full (such deferred installments of
Contract Adjustment Payments together with the additional Contract
Adjustment Payments accrued thereon, being referred to herein as the
"Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to this Section. No Contract
Adjustment Payments may be deferred to a date that is after the Purchase
Contract Settlement Date. If the Purchase Contracts are terminated upon the
occurrence of a Termination Event, the Holder's right to receive Contract
Adjustment Payments and Deferred Contract Adjustment Payments will
terminate.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Purchase
Contract Settlement Date, each Holder will receive on the Purchase Contract
Settlement Date in lieu of a cash payment a number of shares of Common
Stock (in addition to a number of shares of Common Stock equal to the
Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to such Holder divided by (y) the Applicable
Market Value.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock or make guarantee payments with respect to the foregoing (other than
(i) purchases or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under
any employee or agent benefit plans or the satisfaction by the Company of
its obligations pursuant to any contract or security outstanding on the
date of such event requiring the Company to purchase capital stock of the
Company, (ii) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock,
(iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged, (iv) dividends
or distributions in capital stock of the Company (or rights to acquire
capital stock) or repurchases or redemptions of capital stock solely from
the issuance or exchange of capital stock or (v) redemptions or repurchases
of any rights outstanding under a shareholder rights plan and the
declaration thereunder of a dividend of rights in the future).
No fractional shares of Common Stock will be issued by the
Company with respect to the payment of Deferred Contract Adjustment
Payments on the Purchase Contract Settlement Date. In lieu of fractional
shares otherwise issuable with respect to such payment of Deferred Contract
Adjustment Payments, the Holder will be entitled to receive an amount in
cash as provided in Section 5.10.
Section 5.4. Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred or a Holder
settles the underlying Purchase Contract through the early delivery of cash
to the Purchase Contract Agent in the manner described in Section 5.9, each
Holder of an Income PRIDES must notify the Agent by use of a notice in
substantially the form of Exhibit E hereto of its intention to pay in cash
("Cash Settlement") the Purchase Price for the shares of Common Stock to be
purchased pursuant to a Purchase Contract. Such notice shall be made on or
prior to 5:00 p.m., New York City time, on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date. The Agent
shall promptly notify the Collateral Agent of the receipt of such a notice
from a Holder intending to make a Cash Settlement.
(ii) A Holder of an Income PRIDES who has so
notified the Agent of its intention to make a Cash Settlement is
required to pay the Purchase Price to the Collateral Agent prior
to 5:00 p.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money
of the United States by certified or cashiers' check or wire
transfer, in each case in immediately available funds payable to
or upon the order of the Company. Any cash received by the
Collateral Agent will be invested promptly by the Collateral
Agent in Permitted Investments and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase
Contract in accordance with the terms of this Agreement and the
Pledge Agreement. Any funds received by the Collateral Agent in
respect of the investment earnings from the investment in such
Permitted Investments, will be distributed to the Agent when
received for payment to the Holder.
(iii) If a Holder of an Income PRIDES
fails to notify the Agent of its intention to make a Cash
Settlement in accordance with paragraph (a)(i) above, such
failure shall constitute an event of default and the Holder shall
be deemed to have consented to the disposition of the pledged
Preferred Securities pursuant to the Remarketing as described in
paragraph (b) below. If a Holder of an Income PRIDES does notify
the Agent as provided in paragraph (a)(i) above of its intention
to pay the Purchase Price in cash, but fails to make such payment
as required by paragraph (a)(ii) above, such failure shall also
constitute a default; however, the Preferred Securities of such a
Holder will not be remarketed but instead the Collateral Agent,
for the benefit of the Company, will exercise its rights as a
secured party with respect to such Preferred Securities,
including those rights specified in paragraph (c) below.
(b) In order to dispose of the Preferred Securities of
Income PRIDES Holders who have not notified the Agent of their intention to
effect a Cash Settlement as provided in paragraph (a)(i) above, the Company
shall engage a nationally recognized investment bank (the "Remarketing
Agent") pursuant to the Remarketing Agreement to sell such Preferred
Securities. In order to facilitate the remarketing, the Agent shall notify,
by 10:00 a.m., New York City time, on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, the Remarketing Agent of
the aggregate number of Preferred Securities to be remarketed.
Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, will present for remarketing such Preferred Securities to the
Remarketing Agent. Upon receipt of such notice from the Agent and such
Preferred Securities from the Collateral Agent, the Remarketing Agent will,
on the third Business Day immediately preceding the Purchase Contract
Settlement Date, use its reasonable efforts to remarket such Preferred
Securities on such date at a price of approximately 100.5% (but not less
than 100%) of the aggregate stated liquidation amount of such Preferred
Securities, plus accrued and unpaid distributions (including deferred
distributions), if any, thereon. After deducting as the remarketing fee
("Remarketing Fee") an amount not exceeding 25 basis points (.25%) of the
aggregate stated liquidation amount of the remarketed Preferred Securities
from any amount of such proceeds in excess of the aggregate stated
liquidation amount of the remarketed Preferred Securities plus accrued and
unpaid distributions (including any deferred distributions), if any, then
the Remarketing Agent will remit the entire amount of the proceeds from
such remarketing to the Collateral Agent. Such portion of the proceeds,
equal to the aggregate stated liquidation amount of such Preferred
Securities, will automatically be applied by the Collateral Agent, in
accordance with the Pledge Agreement to satisfy in full such Income PRIDES
holders' obligations to pay the Purchase Price for the Common Stock under
the related Purchase Contracts on the Purchase Contract Settlement Date.
Any proceeds in excess of those required to pay the Purchase Price and the
Remarketing Fee will be remitted to the Agent for payment to the Holders of
the related Income PRIDES. Income PRIDES Holders whose Preferred Securities
are so remarketed will not otherwise be responsible for the payment of any
Remarketing Fee in connection therewith. If, in spite of using its
reasonable efforts, the Remarketing Agent cannot remarket the related
Preferred Securities of such Holders of Income PRIDES at a price not less
then 100% of the aggregate stated liquidation amount of such Preferred
Securities plus accrued and unpaid distributions (including deferred
distributions), if any, the remarketing will be deemed to have failed (a
"Failed Remarketing") and in accordance with the terms of the Pledge
Agreement the Collateral Agent for the benefit of the Company will exercise
its rights as a secured party with respect to such Preferred Securities,
including those actions specified in paragraph (c) below; provided, that if
upon a Failed Remarketing the Collateral Agent exercises such rights for
the benefit of the Company with respect to such Preferred Securities, any
accrued and unpaid distributions (including any deferred distributions) on
such Preferred Securities will become payable by the Company to the Agent
for payment to the Beneficial Owner of the Income PRIDES to which such
Preferred Securities relates. Such payment will be made by the Company on
or prior to 11 a.m. New York City time on the Purchase Contract Settlement
Date in lawful money of the United States by certified or cashiers' check
or wire transfer in immediately available funds payable to or upon the
order of the Agent. The Company will cause a notice of such Failed
Remarketing to be published on the Second Business Day immediately
preceding the Purchase Contract Settlement Date in a daily newspaper in the
English language of general circulation in The City of New York, which is
expected to be The Wall Street Journal.
(c) With respect to any Preferred Securities beneficially
owned by Holders who have elected Cash Settlement but failed to deliver
cash as required in (a)(ii) above, or with respect to Preferred Securities
which are subject to a Failed Remarketing, the Collateral Agent for the
benefit of the Company reserves all of its rights as a secured party with
respect thereto and, subject to applicable law and paragraph (h) below,
may, among other things, (i) retain the Preferred Securities in full
satisfaction of the Holders obligations under the Purchase Contracts or
(ii) sell the Preferred Securities in one or more public or private sales.
(d) (i) Unless a Holder of Growth PRIDES or Income PRIDES (if a
Tax Event Redemption has occurred) settles the underlying Purchase Contract
through the early delivery of cash to the Purchase Contract Agent in the
manner described in Section 5.9, each Holder of a Growth PRIDES or Income
PRIDES (if a Tax Event Redemption has occurred) must notify the Agent by
use of a notice in substantially the form of Exhibit E hereto of its
intention to pay in cash the Purchase Price for the shares of Common Stock
to be purchased pursuant to a Purchase Contract on or prior to 5:00 p.m.,
New York City time, on the second Business Day immediately preceding the
Purchase Contract Settlement Date.
(ii) A Holder of a Growth PRIDES or Income
PRIDES (if a Tax Event Redemption has occurred) who has so
notified the Agent of its intention to make a Cash Settlement in
accordance with paragraph (d)(i) above is required to pay the
Purchase Price to the Collateral Agent prior to 11:00 a.m., New
York City time, on the Business Day immediately preceding the
Purchase Contract Settlement Date in lawful money of the United
States by certified or cashiers' check or wire transfer, in each
case in immediately available funds payable to or upon the order
of the Company. Any cash received by the Collateral Agent will be
invested promptly by the Collateral Agent in Permitted
Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Collateral Agent in respect
of the investment earnings from the investment in such Permitted
Investments will be distributed to the Agent when received for
payment to the Holder.
(iii) If a Holder of a Growth PRIDES
fails to notify the Agent of its intention to make a Cash
Settlement in accordance with paragraph (d)(i) above, or if a
Holder of an Income PRIDES (if a Tax Event Redemption has
occurred) does notify the Agent as provided in paragraph (d)(i)
above its intention to pay the Purchase Price in cash, but fails
to make such payment as required by paragraph (d)(ii) above, then
upon the maturity of the Pledged Treasury Securities or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, held by the Collateral Agent on
the Business Day immediately prior to the Purchase Contract
Settlement Date, the principal amount of the Treasury Securities
or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, received by the Collateral Agent
will be invested promptly in overnight Permitted Investments. On
the Purchase Contract Settlement Date an amount equal to the
Purchase Price will be remitted to the Company as payment thereof
without receiving any instructions from the Holder. In the event
the sum of the proceeds from the related Pledged Treasury
Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, and the investment
earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled
thereby, the Collateral Agent will distribute such excess to the
Agent for the benefit of the Holder of the related Growth PRIDES
or Income PRIDES when received.
(e) Any distribution to Holders of excess funds and
interest described above, shall be payable at the office of the Agent in
The City of New York maintained for that purpose or, at the option of the
Holder, by check mailed to the address of the Person entitled thereto at
such address as it appears on the Register.
(f) Unless a Holder settles the underlying Purchase
Contract through the early delivery of cash to the Collateral Agent in the
manner described herein, the Company shall not be obligated to issue any
shares of Common Stock in respect of a Purchase Contract or deliver any
certificate therefor to the Holder unless it shall have received payment in
full of the Purchase Price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
(g) Upon Cash Settlement of any Purchase Contract, (i) the
Collateral Agent will in accordance with the terms of the Pledge Agreement
cause the Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, or the
Pledged Treasury Securities underlying the relevant Security to be released
from the Pledge by the Collateral Agent free and clear of any security
interest of the Company and transferred to the Agent for delivery to the
Holder thereof or its designee as soon as practicable and (ii) subject to
the receipt thereof from the Collateral Agent, the Agent shall, by book-
entry transfer, or other appropriate procedures, in accordance with
instructions provided by the Holder thereof, transfer such Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, or such Treasury Securities (or, if no such
instructions are given to the Agent by the Holder, the Agent shall hold
such Preferred Securities or the Treasury Portfolio, as the case may be, or
such Treasury Securities, and any distribution thereon, in the name of the
Agent or its nominee in trust for the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase
Price are non-recourse obligations and are payable solely out of any Cash
Settlement or the proceeds of any Collateral Pledged to secure the
obligations of the Holders and in no event will Holders be liable for any
deficiency between the proceeds of Collateral disposition and the Purchase
Price.
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior to the
Purchase Contract Settlement Date or an Early Settlement shall have
occurred, on the Purchase Contract Settlement Date, upon its receipt of
payment in full of the Purchase Price for the shares of Common Stock
purchased by the Holders pursuant to the foregoing provisions of this
Article and subject to Section 5.6(b), the Company shall issue and deposit
with the Agent, for the benefit of the Holders of the Outstanding
Securities, one or more certificates representing the newly issued shares
of Common Stock registered in the name of the Agent (or its nominee) as
custodian for the Holders (such certificates for shares of Common Stock,
together with any dividends or distributions for which a record date and
payment date for such dividend or distribution has occurred after the
Purchase Contract Settlement Date, being hereinafter referred to as the
"Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder. Subject to the foregoing, upon surrender of a Certificate to the
Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly completed and executed, the Holder of
such Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Common Stock which
such Holder is entitled to receive pursuant to the provisions of this
Article Five (after taking into account all Securities then held by such
Holder) together with cash in lieu of fractional shares as provided in
Section 5.10 and any dividends or distributions with respect to such shares
constituting part of the Purchase Contract Settlement Fund, but without any
interest thereon, and the Certificate so surrendered shall forthwith be
cancelled. Such shares shall be registered in the name of the Holder or the
Holder's designee as specified in the settlement instructions provided by
the Holder to the Agent. If any shares of Common Stock issued in respect of
a Purchase Contract are to be registered to a Person other than the Person
in whose name the Certificate evidencing such Purchase Contract is
registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason
of such registration in a name other than that of the registered Holder of
the Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits,
Etc.
(1) In case the Company shall pay or make a dividend or
other distribution on the Common Stock in Common Stock, the Settlement
Rate, as in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive
such dividend or other distribution shall be increased by dividing
such Settlement Rate by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such increase to
become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at time
outstanding shall not include shares held in the treasury of the
Company but shall include any shares issuable in respect of any scrip
certificates issued in lieu of fractions of shares of Common Stock.
The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not being available on an
equivalent basis to Holders of the Securities upon settlement of the
Purchase Contracts underlying such Securities) entitling them, for a
period expiring within 45 days after the record date for the
determination of stockholders entitled to receive such rights, options
or warrants, to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price per share of the
Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights, options or warrants (other than
pursuant to a dividend reinvestment plan), the Settlement Rate, in
effect at the opening of business on the day following the date fixed
for such determination shall be increased by dividing such Settlement
Rate, by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common
Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would
purchase at such Current Market Price and the denominator shall be the
number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination plus the number of shares of
Common Stock so offered for subscription or purchase, such increase to
become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of
this paragraph (2), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Company but shall include any shares issuable in respect of any scrip
certificates issued in lieu of fractions of shares of Common Stock.
The Company shall not issue any such rights, options or warrants in
respect of shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common Stock,
the Settlement Rate, in effect at the opening of business on the day
following the day upon which such subdivision or split becomes
effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a
smaller number of shares of Common Stock, the Settlement Rate, in
effect at the opening of business on the day following the day upon
which such combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to become
effective immediately after the opening of business on the day
following the day upon which such subdivision, split or combination
becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including securities, but excluding any rights
or warrants referred to in paragraph (2) of this Section, any dividend
or distribution paid exclusively in cash and any dividend or
distribution referred to in paragraph (1) of this Section), the
Settlement Rate, shall be adjusted so that the same shall equal the
rate determined by dividing the Settlement Rate in effect immediately
prior to the close of business on the date fixed for the determination
of stockholders entitled to receive such distribution by a fraction of
which the numerator shall be the Current Market Price per share of the
Common Stock on the date fixed for such determination less the then
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution
filed with the Agent) of the portion of the assets or evidences of
indebtedness so distributed applicable to one share of Common Stock
and the denominator shall be such Current Market Price per share of
the Common Stock, such adjustment to become effective immediately
prior to the opening of business on the day following the date fixed
for the determination of stockholders entitled to receive such
distribution. In any case in which this paragraph (4) is applicable,
paragraph (2) of this Section shall not be applicable.
(5) In case the Company shall, (I) by dividend or
otherwise, distribute to all holders of its Common Stock cash
(excluding any cash that is distributed in a Reorganization Event to
which Section 5.6(b) applies or as part of a distribution referred to
in paragraph (4) of this Section) in an aggregate amount that,
combined together with (II) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in
cash within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to this
paragraph (5) or paragraph (6) of this Section has been made and (III)
the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) of consideration payable in respect
of any tender or exchange offer by the Company or any of its
subsidiaries for all or any portion of the Common Stock concluded
within the 12 months preceding the date of payment of the distribution
described in clause (I) above and in respect of which no adjustment
pursuant to this paragraph (5) or paragraph (6) of this Section has
been made, exceeds 15% of the product of the Current Market Price per
share of the Common Stock on the date for the determination of holders
of shares of Common Stock entitled to receive such distribution times
the number of shares of Common Stock outstanding on such date, then,
and in each such case, immediately after the close of business on such
date for determination, the Settlement Rate, shall be increased so
that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of business
on the date fixed for determination of the stockholders entitled to
receive such distribution by a fraction (i) the numerator of which
shall be equal to the Current Market Price per share of the Common
Stock on the date fixed for such determination less an amount equal to
the quotient of (x) the combined amount distributed or payable in the
transactions described in clauses (I), (II) and (III) above and (y)
the number of shares of Common Stock outstanding on such date for
determination and (ii) the denominator of which shall be equal to the
Current Market Price per share of the Common Stock on such date for
determination.
(6) In case (I) a tender or exchange offer made by the
Company or any subsidiary of the Company for all or any portion of the
Common Stock shall expire and such tender or exchange offer (as
amended upon the expiration thereof) shall require the payment to
stockholders (based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of Purchased Shares) of an
aggregate consideration having a fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) that combined together with (II) the
aggregate of the cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a Board Resolution), as of the expiration of such tender
or exchange offer, of consideration payable in respect of any other
tender or exchange offer, by the Company or any subsidiary of the
Company for all or any portion of the Common Stock expiring within the
12 months preceding the expiration of such tender or exchange offer
and in respect of which no adjustment pursuant to paragraph (5) of
this Section or this paragraph (6) has been made and (III) the
aggregate amount of any distributions to all holders of the Company's
Common Stock made exclusively in cash within the 12 months preceding
the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section or this
paragraph (6) has been made, exceeds 15% of the product of the Current
Market Price per share of the Common Stock as of the last time (the
"Expiration Time") tenders could have been made pursuant to such
tender or exchange offer (as it may be amended) times the number of
shares of Common Stock outstanding (including any tendered shares) on
the Expiration Time, then, and in each such case, immediately prior to
the opening of business on the day after the date of the Expiration
Time, the Settlement Rate, shall be adjusted so that the same shall
equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business on the date of the Expiration Time by a
fraction (i) the numerator of which shall be equal to (A) the product
of (I) the Current Market Price per share of the Common Stock on the
date of the Expiration Time and (II) the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration
Time less (B) the amount of cash plus the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders based on the transactions described in clauses (I), (II)
and (III) above (assuming in the case of clause (I) the acceptance, up
to any maximum specified in the terms of the tender or exchange offer,
of Purchased Shares), and (ii) the denominator of which shall be equal
to the product of (A) the Current Market Price per share of the Common
Stock as of the Expiration Time and (B) the number of shares of Common
Stock outstanding (including any tendered shares) as of the Expiration
Time less the number of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any
such maximum, being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section 5.6(b)
applies) shall be deemed to involve (a) a distribution of such
securities other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to be "the
date fixed for the determination of stockholders entitled to receive
such distribution" and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section), and (b) a subdivision,
split or combination, as the case may be, of the number of shares of
Common Stock outstanding immediately prior to such reclassification
into the number of shares of Common Stock outstanding immediately
thereafter (and the effective date of such reclassification shall be
deemed to be "the day upon which such subdivision or split becomes
effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision, split or
combination becomes effective" within the meaning of paragraph (3) of
this Section).
(8) The "Current Market Price" per share of Common Stock on
any day means the average of the daily Closing Prices for the 5
consecutive Trading Days selected by the Company commencing not more
than 30 Trading Days before, and ending not later than, the earlier of
the day in question and the day before the "ex date" with respect to
the issuance or distribution requiring such computation. For purposes
of this paragraph, the term "ex date", when used with respect to any
issuance or distribution, shall mean the first date on which the
Common Stock trades regular way on such exchange or in such market
without the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be
calculated to the nearest 1/10,000th of a share of Common Stock (or if
there is not a nearest 1/10,000th of a share to the next lower
1/10,000th of a share). No adjustment in the Settlement Rate shall be
required unless such adjustment would require an increase or decrease
of at least one percent therein; provided, however, that any
adjustments which by reason of this subparagraph are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is made to the Settlement Rate
pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of
this Section 5.6(a), an adjustment shall also be made to the
Applicable Market Value solely to determine which of clauses (a), (b)
or (c) of the definition of Settlement Rate in Section 5.1 will apply
on the Purchase Contract Settlement Date. Such adjustment shall be
made by multiplying the Applicable Market Value by a fraction of which
the numerator shall be the Settlement Rate immediately after such
adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.6(a) and the denominator shall be the
Settlement Rate immediately before such adjustment; provided, however,
that if such adjustment to the Settlement Rate is required to be made
pursuant to the occurrence of any of the events contemplated by
paragraph (1) (2) (3) (4) (5) (7) or (10) of this Section 5.6(a)
during the period taken into consideration for determining the
Applicable Market Value, appropriate and customary adjustments shall
be made to the Settlement Rate.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it considers
to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax
purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other
Reorganization Event. In the event of (i) any consolidation or merger of
the Company with or into another Person (other than a merger or
consolidation in which the Company is the continuing corporation and in
which the Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, securities or other property of
the Company or another corporation), (ii) any sale, transfer, lease or
conveyance to another Person of the property of the Company as an entirety
or substantially as an entirety, (iii) any statutory exchange of securities
of the Company with another Person (other than in connection with a merger
or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company other than as a result of or after the occurrence of a Termination
Event (any such event, a "Reorganization Event"), the Settlement Rate will
be adjusted to provide that each Holder of Securities will receive on the
Purchase Contract Settlement Date with respect to each Purchase Contract
forming a part thereof, the kind and amount of securities, cash and other
property receivable upon such Reorganization Event (without any interest
thereon, and without any right to dividends or distribution thereon which
have a record date that is prior to the Purchase Contract Settlement Date)
by a Holder of the number of shares of Common Stock issuable on account of
each Purchase Contract if the Purchase Contract Settlement Date had
occurred immediately prior to such Reorganization Event assuming such
Holder of Common Stock is not a Person with which the Company consolidated
or into which the Company merged or which merged into the Company or to
which such sale or transfer was made, as the case may be (any such Person,
a "Constituent Person"), or an Affiliate of a Constituent Person to the
extent such Reorganization Event provides for different treatment of common
Stock held by Affiliates of the Company and non-affiliates and such Holder
failed to exercise his rights of election, if any, as to the kind or amount
of securities, cash and other property receivable upon such Reorganization
Event (provided that if the kind or amount of securities, cash and other
property receivable upon such Reorganization Event is not the same for each
share of Common Stock held immediately prior to such Reorganization Event
by other than a Constituent Person or an Affiliate thereof and in respect
of which such rights of election shall not have been exercised ("non-
electing share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such Reorganization
Event by each non-electing share shall be deemed to be the kind and amount
so receivable per share by a plurality of the non-electing shares). In the
event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets
of the Company or, in the event of a liquidation or dissolution of the
Company, the Company or a liquidating trust created in connection
therewith, shall execute and deliver to the Agent an agreement supplemental
hereto providing that the Holders of each Outstanding Security shall have
the rights provided by this Section 5.6. Such supplemental agreement shall
provide for adjustments which, for events subsequent to the effective date
of such supplemental agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive
Reorganization Events.
Section 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein
provided, the Company shall:
(i) forthwith compute the Settlement Rate in
accordance with Section 5.6 and prepare and transmit to the Agent
an Officer's Certificate setting forth the Settlement Rate, the
method of calculation thereof in reasonable detail, and the facts
requiring such adjustment and upon which such adjustment is
based; and
(ii) within 10 Business Days following the
occurrence of an event that requires an adjustment to the
Settlement Rate pursuant to Section 5.6 (or if the Company is not
aware of such occurrence, as soon as practicable after becoming
so aware), provide a written notice to the Holders of the
Securities of the occurrence of such event and a statement in
reasonable detail setting forth the method by which the
adjustment to the Settlement Rate was determined and setting
forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts
exist which may require any adjustment of the Settlement Rate, or with
respect to the nature or extent or calculation of any such adjustment when
made, or with respect to the method employed in making the same. The Agent
shall not be accountable with respect to the validity or value (or the kind
or amount) of any shares of Common Stock, or of any securities or property,
which may at the time be issued or delivered with respect to any Purchase
Contract; and the Agent makes no representation with respect thereto. The
Agent shall not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock pursuant to a Purchase
Contract or to comply with any of the duties, responsibilities or covenants
of the Company contained in this Article.
Section 5.8. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay
any Contract Adjustment Payments or Deferred Contract Adjustment Payments,
if the Company shall have such obligation, and the rights and obligations
of Holders to purchase Common Stock, shall immediately and automatically
terminate, without the necessity of any notice or action by any Holder, the
Agent or the Company, if, on or prior to the Purchase Contract Settlement
Date, a Termination Event shall have occurred. Upon and after the
occurrence of a Termination Event, the Securities shall thereafter
represent the right to receive the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, forming a part of such Securities in the case of Income PRIDES, or
Treasury Securities in the case of Growth PRIDES, in accordance with the
provisions of Section 4.3 of the Pledge Agreement. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than
two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in
the Register.
Section 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of this
Section 5.9, at the option of the Holder thereof, Purchase Contracts
underlying Securities, having an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof, may be settled early ("Early Settlement") in
the case of Income PRIDES (unless a Tax Event Redemption has occurred) on
or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date and in the case of Growth PRIDES on or prior to
the second Business Day immediately preceding the Purchase Contract
Settlement Date, in each case, as provided herein; provided however, that
if a Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the Income PRIDES Purchase Contracts, underlying
Income PRIDES may be settled early, on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, but only in an
aggregate amount of $160,000 or in an integral multiple thereof. In order
to exercise the right to effect Early Settlement with respect to any
Purchase Contracts, the Holder of the Certificate evidencing Securities
shall deliver such Certificate to the Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early on the reverse thereof duly completed and
accompanied by payment (payable to the Company in immediately available
funds in an amount (the "Early Settlement Amount") equal to (i) the product
of (A) the Stated Amount times (B) the number of Purchase Contracts with
respect to which the Holder has elected to effect Early Settlement plus
(ii) if such delivery is made with respect to any Purchase Contracts during
the period from the close of business on any Record Date next preceding any
Payment Date to the opening of business on such Payment Date, an amount
equal to the sum of (x) the Contract Adjustment Payments payable on such
Payment Date with respect to such Purchase Contracts plus (y) in the case
of Income PRIDES Certificate, the distributions on the related Preferred
Securities payable on such Payment Date. Except as provided in the
immediately preceding sentence and subject to the second to last paragraph
of Section 5.2, no payment or adjustment shall be made upon Early
Settlement of any Purchase Contract on account of any Contract Adjustment
Payments accrued on such Purchase Contract or on account of any dividends
on the Common Stock issued upon such Early Settlement. If the foregoing
requirements are first satisfied with respect to Purchase Contracts
underlying any Securities at or prior to 5:00 p.m., New York City time, on
a Business Day, such day shall be the "Early Settlement Date" with respect
to such Securities and if such requirements are first satisfied after 5:00
p.m., New York City time, on a Business Day or on a day that is not a
Business Day, the "Early Settlement Date" with respect to such Securities
shall be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of
the related Securities, the Company shall issue, and the Holder shall be
entitled to receive, _____ shares of Common Stock on account of each
Purchase Contract as to which Early Settlement is effected (the "Early
Settlement Rate"); provided, however, that upon the Early Settlement of the
Purchase Contracts, the Holder of such related Securities will forfeit the
right to receive any Deferred Contract Adjustment Payments. The Early
Settlement Rate shall be adjusted in the same manner and at the same time
as the Settlement Rate is adjusted. As promptly as practicable after Early
Settlement of Purchase Contracts in accordance with the provisions of this
Section 5.9, the Company shall issue and shall deliver to the Agent at the
Corporate Trust Office a certificate or certificates for the full number of
shares of Common Stock issuable upon such Early Settlement together with
payment in lieu of any fraction of a share, as provided in Section 5.10.
(c) No later than the third Business Day after the applicable
Early Settlement Date the Company shall cause (i) the shares of Common
Stock issuable upon Early Settlement of Purchase Contracts to be issued and
delivered, and (ii) the related Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, in the case of
Income PRIDES, or the related Treasury Securities, in the case of Growth
PRIDES, to be released from the Pledge by the Collateral Agent and
transferred, in each case to the Agent for delivery to the Holder thereof
or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject
to receipt of shares of Common Stock from the Company and the Preferred
Securities, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, from the Collateral
Agent, as applicable, the Agent shall, in accordance with the instructions
provided by the Holder thereof on the applicable form of Election to Settle
Early on the reverse of the Certificate evidencing the related Securities,
(i) transfer to the Holder the Preferred Securities, Treasury Portfolio or
Treasury Securities, as the case may be, forming a part of such Securities,
and (ii) deliver to the Holder a certificate or certificates for the full
number of shares of Common Stock issuable upon such Early Settlement
together with payment in lieu of any fraction of a share, as provided in
Section 5.10.
(e) In the event that Early Settlement is effected with respect
to Purchase Contracts underlying less than all the Securities evidenced by
a Certificate, upon such Early Settlement the Company shall execute and the
Agent shall authenticate, countersign and deliver to the Holder thereof, at
the expense of the Company, a Certificate evidencing the Securities as to
which Early Settlement was not effected.
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares of
Common Stock shall be issued or delivered upon settlement on the Purchase
Contract Settlement Date or upon Early Settlement of any Purchase
Contracts. If Certificates evidencing more than one Purchase Contract shall
be surrendered for settlement at one time by the same Holder, the number of
full shares of Common Stock which shall be delivered upon settlement shall
be computed on the basis of the aggregate number of Purchase Contracts
evidenced by the Certificates so surrendered. Instead of any fractional
share of Common Stock which would otherwise be deliverable upon settlement
of any Purchase Contracts on the Purchase Contract Settlement Date or upon
Early Settlement, the Company, through the Agent, shall make a cash payment
in respect of such fractional interest in an amount equal to the value of
such fractional shares times the Applicable Market Value. The Company shall
provide the Agent from time to time with sufficient funds to permit the
Agent to make all cash payments required by this Section 5.10 in a timely
manner.
Section 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares of Common
Stock pursuant to the Purchase Contracts and in payment of any Deferred
Contract Adjustment Payments; provided, however, that the Company shall not
be required to pay any such tax or taxes which may be payable in respect of
any exchange of or substitution for a Certificate evidencing a Security or
any issuance of a share of Common Stock in a name other than that of the
registered Holder of a Certificate surrendered in respect of the Securities
evidenced thereby, other than in the name of the Agent, as custodian for
such Holder, and the Company shall not be required to issue or deliver such
share certificates or Certificates unless or until the Person or Persons
requesting the transfer or issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment
Payments and to Purchase Common Stock.
In the event that Contract Adjustment Payments shall constitute a
component of Income PRIDES or Growth PRIDES, the Holder of any Income
PRIDES or Growth PRIDES shall have the right, which is absolute and
unconditional (subject to the right of the Company to defer payment thereof
pursuant to Section 5.3, the prepayment of Contract Adjustment Payments
pursuant to Section 5.9(a) and to the forfeiture of any Deferred Contract
Adjustment Payments upon Early Settlement pursuant to Section 5.9(b) or
upon the occurrence of a Termination Event), to receive payment of each
installment of the Contract Adjustment Payments with respect to the
Purchase Contract constituting a part of such Security on the respective
Payment Date for such Security and to purchase Common Stock pursuant to
such Purchase Contract and, in each such case, to institute suit for the
enforcement of any such payment and right to purchase Common Stock, and
such rights shall not be impaired without the consent of such Holder.
Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right
or remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder,
then and in every such case, subject to any determination in such
proceeding, the Company and such Holder shall be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of such Holder shall continue as though no such proceeding had
been instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or
reserved to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or
remedy upon a default shall impair any such right or remedy or constitute a
waiver of any such right. Every right and remedy given by this Article or
by law to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Income
PRIDES or Growth PRIDES, by its acceptance of such Income PRIDES or Growth
PRIDES shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Agreement, or in any suit against the Agent for any action taken, suffered
or omitted by it as Agent, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party
litigant; provided that the provisions of this Section shall not apply to
any suit instituted by the Company, to any suit instituted by the Agent, to
any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of distributions on any
Preferred Securities or Contract Adjustment Payments, if any, on any
Purchase Contract on or after the respective Payment Date therefor in
respect of any Security held by such Holder, or for enforcement of the
right to purchase shares of Common Stock under the Purchase Contracts
constituting part of any Security held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Agreement; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Agent or
the Holders, but will suffer and permit the execution of every such power
as though no such law had been enacted.
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to
the Securities, such duties and only such duties as are specifically set
forth in this Agreement and the Pledge Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Agent; and
(2) in the absence of bad faith or negligence on its part,
the Agent may, with respect to the Securities, conclusively rely, as
to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the
Agent and conforming to the requirements of this Agreement, but in the
case of any certificates or opinions which by any provision hereof are
specifically required to be furnished to the Agent, the Agent shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Agreement.
(b) No provision of this Agreement shall be construed to
relieve the Agent from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Agent was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if adequate indemnity is not
provided to it.
(c) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the
liability of or affording protection to the Agent shall be subject to the
provisions of this Section.
(d) The Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge,
the Agent shall transmit by mail to the Company and the Holders of
Securities, as their names and addresses appear in the Register, notice of
such default hereunder, unless such default shall have been cured or
waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the Agent may rely and shall be 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 or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by an Officer's Certificate, Issuer
Order or Issuer Request, and any resolution of the Board of Directors of
the Company may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the
Agent shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Agent (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate of the Company;
(d) the Agent may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Agent, in its discretion, may make reasonable further
inquiry or investigation into such facts or matters related to the
execution, delivery and performance of the Purchase Contracts as it may see
fit, and, if the Agent shall determine to make such further inquiry or
investigation, it shall be given a reasonable opportunity to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
(f) the Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or an Affiliate and the Agent shall not be responsible for any
misconduct or negligence on the part of any agent or attorney or an
Affiliate appointed with due care by it hereunder.
Section 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be
taken as the statements of the Company and the Agent assumes no
responsibility for their accuracy. The Agent makes no representations as to
the validity or sufficiency of either this Agreement or of the Securities,
or of the Pledge Agreement or the Pledge. The Agent shall not be
accountable for the use or application by the Company of the proceeds in
respect of the Purchase Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent and
its Affiliates, in their individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company, the
Collateral Agent or any other Person with the same rights it would have if
it were not Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or
provided herein. The Agent shall be under no obligation to invest or pay
interest on any money received by it hereunder except as otherwise agreed
in writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Agent in accordance
with any provision of this Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Agent and any predecessor Agent for,
and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of its duties
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having (or
being a member of a bank holding company having) a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
Federal or State authority and having a Corporate Trust Office in the
Borough of Manhattan, The City of New York, if there be such a corporation
in the Borough of Manhattan, The City of New York, qualified and eligible
under this Article and willing to act on reasonable terms. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, 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. If at any time
the Agent shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no
appointment of a successor Agent pursuant to this Article shall become
effective until the acceptance of appointment by the successor Agent in
accordance with the applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Agent required
by Section 7.10 shall not have been delivered to the Agent within 30 days
after the giving of such notice of resignation, the resigning Agent may
petition any court of competent jurisdiction for the appointment of a
successor Agent.
(c) The Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Securities delivered to
the Agent and the Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of the
TIA, as if the Agent were an indenture trustee under an indenture
qualified under the TIA, after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Security for at
least six months, or
(2) the Agent shall cease to be eligible under Section 7.8
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove
the Agent, or (ii) any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of
the Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Agent for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Agent and shall comply with the applicable requirements of
Section 7.10. If no successor Agent shall have been so appointed by the
Company and accepted appointment in the manner required by Section 7.10,
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Agent.
(f) The Company shall give, or shall cause such successor
Agent to give, notice of each resignation and each removal of the Agent and
each appointment of a successor Agent by mailing written notice of such
event by first-class mail, postage prepaid, to all Holders as their names
and addresses appear in the applicable Register. Each notice shall include
the name of the successor Agent and the address of its Corporate Trust
Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Agent, every such successor Agent so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Agent an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Agent shall become effective and such successor Agent, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, agencies and duties of the retiring Agent; but, on the request of
the Company or the successor Agent, such retiring Agent shall, upon payment
of its charges, execute and deliver an instrument transferring to such
successor Agent all the rights, powers and trusts of the retiring Agent and
shall duly assign, transfer and deliver to such successor Agent all
property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company
shall execute any and all instruments for more fully and certainly vesting
in and confirming to such successor Agent all such rights, powers and
agencies referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless
at the time of such acceptance such successor Agent shall be qualified and
eligible under this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Agent shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Agent, shall be the successor of the Agent hereunder,
provided such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Certificates
shall have been authenticated and executed on behalf of the Holders, but
not delivered, by the Agent then in office, any successor by merger,
conversion or consolidation to such Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and executed with
the same effect as if such successor Agent had itself authenticated and
executed such Securities.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Agent, and furnish to the Agent
reasonable proof that each such applicant has owned a Security for a period
of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Agent
shall, mail to all the Holders copies of the form of proxy or other
communication which is specified in such request, with reasonable
promptness after a tender to the Agent of the materials to be mailed and of
payment, or provision for the payment, of the reasonable expenses of such
mailing.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the
Agent assumes no obligations and shall not be subject to any liability
under this Agreement, the Pledge Agreement or any Purchase Contract in
respect of the obligations of the Holder of any Security thereunder. The
Company agrees, and each Holder of a Certificate, by his acceptance
thereof, shall be deemed to have agreed, that the Agent's execution of the
Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Agent shall have no
obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article Five hereof.
Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the
Company, will comply with all applicable certification, information
reporting and withholding (including "backup" withholding) requirements
imposed by applicable tax laws, regulations or administrative practice with
respect to (i) any payments made with respect to the Securities or (ii) the
issuance, delivery, holding, transfer, redemption or exercise of rights
under the Securities. Such compliance shall include, without limitation,
the preparation and timely filing of required returns and the timely
payment of all amounts required to be withheld to the appropriate taxing
authority or its designated agent.
(b) The Agent shall comply with any written direction
received from the Company with respect to the application of such
requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement rely on any such
direction in accordance with the provisions of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to the Company or its authorized
representative within a reasonable period of time after receipt of such
request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at
any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Agent, for
any of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the benefit
of the Holders, or to surrender any right or power herein conferred
upon the Company; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b); or
(5) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such
matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
Section 8.2. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of
the outstanding Purchase Contracts voting together as one Class, by Act of
said Holders delivered to the Company and the Agent, the Company, when
authorized by a Board Resolution, and the Agent may enter into an agreement
or agreements supplemental hereto for the purpose of modifying in any
manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the Securities;
provided, however, that, except as contemplated herein, no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to
be Pledged to secure a Holder's Obligations under the
Purchase Contract, impair the right of the Holder of any Purchase
Contract to receive distributions on the related Collateral (except
for the rights of Holders of Income PRIDES to substitute the Treasury
Securities for the Pledge Preferred Securities or the rights of
holders of Growth PRIDES to substitute Preferred Securities for the
Pledged Treasury Securities) or otherwise adversely affect the
Holder's rights in or to such Collateral or adversely alter the rights
in or to such Collateral;
(3) reduce any Contract Adjustment Payments or any Deferred
Contract Adjustment Payment, or change any place where, or the coin or
currency in which, any Contract Adjustment Payments is payable;
(4) impair the right to institute suit for the enforcement
of any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract, change the Purchase Contract Settlement Date or otherwise
adversely affect the Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to above would
adversely affect only the Income PRIDES or the Growth PRIDES, then only the
affected class of Holder as of the record date for the Holders entitled to
vote thereon will be entitled to vote on such amendment or proposal, and
such amendment or proposal shall not be effective except with the consent
of Holders of not less than a majority of such class.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the
substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by,
any supplemental agreement permitted by this Article or the modifications
thereby of the agencies created by this Agreement, the Agent shall be
entitled to receive and (subject to Section 7.1) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
supplemental agreement is authorized or permitted by this Agreement. The
Agent may, but shall not be obligated to, enter into any such supplemental
agreement which affects the Agent's own rights, duties or immunities under
this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered hereunder
shall be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to
this Article may, and shall if required by the Agent, bear a notation in
form approved by the Agent as to any matter provided for in such
supplemental agreement. If the Company shall so determine, new Certificates
so modified as to conform, in the opinion of the Agent and the Company, to
any such supplemental agreement may be prepared and executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
Agent in exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate with
any other Person or sell, assign, transfer, lease or convey all or
substantially all of its properties and assets to any Person or group of
affiliated Persons in one transaction or a series of related transactions,
unless (i) either the Company shall be the continuing corporation, or the
successor (if other than the Company) shall be a corporation organized and
existing under the laws of the United States of America or a State thereof
or the District of Columbia and such corporation shall expressly assume all
the obligations of the Company under the Purchase Contracts, this Agreement
and the Pledge Agreement by one or more supplemental agreements in form
reasonably satisfactory to the Agent and the Collateral Agent, executed and
delivered to the Agent and the Collateral Agent by such corporation, and
(ii) the Company or such successor corporation, as the case may be, shall
not, immediately after such merger or consolidation, or such sale,
assignment, transfer, lease or conveyance, be in default in the performance
of any covenant or condition hereunder, under any of the Securities or
under the Pledge Agreement.
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by a successor
corporation in accordance with Section 9.1, such successor corporation
shall succeed to and be substituted for the Company with the same effect as
if it had been named herein as the Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or
in the name of Cendant Corporation any or all of the Certificates
evidencing Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Agent; and, upon the order
of such successor corporation, instead of the Company, and subject to all
the terms, conditions and limitations in this Agreement prescribed, the
Agent shall authenticate and execute on behalf of the Holders and deliver
any Certificates which previously shall have been signed and delivered by
the officers of the Company to the Agent for authentication and execution,
and any Certificate evidencing Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Agent for that
purpose. All the Certificates so issued shall in all respects have the same
legal rank and benefit under this Agreement as the Certificates theretofore
or thereafter issued in accordance with the terms of this Agreement as
though all of such Certificates had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance such change in phraseology and form (but not
in substance) may be made in the Certificates evidencing Securities
thereafter to be issued as may be appropriate.
Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an
Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, assignment, transfer, lease or conveyance, and any such
assumption, complies with the provisions of this Article and that all
conditions precedent to the consummation of any such consolidation, merger,
sale, assignment, transfer, lease or conveyance have been met.
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders
from time to time of the Securities that it will duly and punctually
perform its obligations under the Purchase Contracts in accordance with the
terms of the Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City
of New York an office or agency where Certificates may be presented or
surrendered for acquisition of shares of Common Stock upon settlement of
the Purchase Contracts on the Purchase Contract Settlement Date or Early
Settlement and for transfer of Collateral upon occurrence of a Termination
Event, where Certificates may be surrendered for registration of transfer
or exchange, for a Collateral Substitution or re-establishment of an Income
PRIDES and where notices and demands to or upon the Company in respect of
the Securities and this Agreement may be served. The Company will give
prompt written notice to the Agent of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Agent with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the
Company hereby appoints the Agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where Certificates may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, The City of New
York for such purposes. The Company will give prompt written notice to the
Agent of any such designation or rescission and of any change in the
location of any such other office or agency. The Company hereby designates
as the place of payment for the Securities the Corporate Trust Office and
appoints the Agent at its Corporate Trust Office as paying agent in such
city.
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights,
out of its authorized but unissued Common Stock the full number of shares
of Common Stock issuable against tender of payment in respect of all
Purchase Contracts constituting a part of the Securities evidenced by
Outstanding Certificates.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may
be issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable.
Section 10.5. Statements of Officer of the Company as to Default.
The Company will deliver to the Agent, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officer's Certificate, stating whether or not to the best knowledge of the
signer thereof the Company is in default in the performance and observance
of any of the terms, provisions and conditions hereof, and if the Company
shall be in default, specifying all such defaults and the nature and status
thereof of which such Officer may have knowledge.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
CENDANT CORPORATION
By: ____________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase Contract Agent
By: ____________________________________
Name:
Title:
EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND
NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN
THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, 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 requested by an authorized
representative of The Depository Trust Company, and any payment hereon is
made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.
No. _____
Cusip No. Number of Income PRIDES _______
Form of Face of Income PRIDES Certificate
____% Income PRIDES
This Income PRIDES Certificate certifies that ___________ is the
registered Holder of the number of Income PRIDES set forth above. Each
Income PRIDES represents (i) either (a) beneficial ownership by the Holder
of one ____% Trust Originated Preferred Security (the "Preferred Security")
of Cendant Capital II, a Delaware statutory business trust (the "Trust"),
having a stated liquidation amount of $50, subject to the Pledge of such
Preferred Security by such Holder pursuant to the Pledge Agreement or (b)
upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the appropriate Applicable Ownership Interest of
the Treasury Portfolio, subject to the Pledge of such Applicable Ownership
Interest of the Treasury Portfolio by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one
Purchase Contract with Cendant Corporation, a Delaware corporation (the
"Company"). All capitalized terms used herein which are defined in the
Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, constituting part of each Income PRIDES evidenced hereby have
been pledged to the Collateral Agent, for the benefit of the Company, to
secure the obligations of the Holder under the Purchase Contract comprising
a portion of such Income PRIDES.
The Pledge Agreement provides that all payments of the Stated
Amount of or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) in the Treasury Portfolio, as
the case may be, or cash distributions on, any Pledged Preferred Securities
(as defined in the Pledge Agreement) or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,
constituting part of the Income PRIDES received by the Collateral Agent
shall be paid by the Collateral Agent by wire transfer in same day funds
(i) in the case of (A) cash distributions with respect to Pledged Preferred
Securities or the appropriate Applicable Ownership Interest (as specified
in clause (B) of the definition of such term) of the Treasury Portfolio, as
the case may be, and (B) any payments of the Stated Amount or the
appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such terms) of the Treasury Portfolio, as the case may
be, with respect to any Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, that have
been released from the Pledge pursuant to the Pledge Agreement, to the
Agent to the account designated by the Agent, no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received by
the Collateral Agent on a day that is not a Business Day or after 12:30
p.m., New York City time, on a Business Day, then such payment shall be
made no later than 10:30 a.m., New York City time, on the next succeeding
Business Day) and (ii) in the case of payments of the Stated Amount or the
appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) in the Treasury Portfolio, as the case may be,
of any Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) in the
Treasury Portfolio, as the case may be, to the Company on the Purchase
Contract Settlement Date (as defined herein) in accordance with the terms
of the Pledge Agreement, in full satisfaction of the respective obligations
of the Holders of the Income PRIDES of which such Pledged Preferred
Securities or the Treasury Portfolio, as the case may be, are a part under
the Purchase Contracts forming a part of such Income PRIDES. Distributions
on any Preferred Security or the appropriate Applicable Ownership Interest
(as specified in clause (B) of the definition of such term) of the Treasury
Portfolio, as the case may be, forming part of an Income PRIDES evidenced
hereby which are payable quarterly in arrears on February 16, May 16,
August 16 and November 16 each year, commencing ______________,
(a "Payment Date"), shall, subject to receipt thereof by the Agent from
the Collateral Agent, be paid to the Person in whose name this Income
PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment
Date.
Each Purchase Contract evidenced hereby obligates the Holder of
this Income PRIDES Certificate to purchase, and the Company to sell, on
____________, 2001 (the "Purchase Contract Settlement Date"), at a price
equal to $50 (the "Stated Amount"), a number of shares of Common Stock, no
par value ("Common Stock"), of the Company, equal to the Settlement Rate,
unless on or prior to the Purchase Contract Settlement Date there shall
have occurred a Termination Event or an Early Settlement with respect to
the Income PRIDES of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The purchase price (the "Purchase Price") for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby,
if not paid earlier, shall be paid on the Purchase Contract Settlement Date
by application of payment received in respect of the Stated Amount or the
appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be,
of the Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, pledged to secure
the obligations under such Purchase Contract of the Holder of the Income
PRIDES of which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of an Income PRIDES evidenced hereby an
amount (the "Contract Adjustment Payments") equal to % per annum of the
Stated Amount, computed on the basis of a 360 day year of twelve 30 day
months, subject to deferral at the option of the Company as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof.
Such Contract Adjustment Payments shall be payable to the Person in whose
name this Income PRIDES Certificate (or a Predecessor Income PRIDES
Certificate) is registered at the close of business on the Record Date for
such Payment Date.
Distributions on the Preferred Securities or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition
of such term) of the Treasury Portfolio, as the case may be, and Contract
Adjustment Payments will be payable at the office of the Agent in The City
of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on the
Income PRIDES Register.
Reference is hereby made to the further provisions set forth on
the reverse hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Agent by manual signature, this Income PRIDES Certificate shall not
be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
CENDANT CORPORATION
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF
CHICAGO, not individually but solely
as Attorney-in-Fact of such Holder
By: ____________________________________
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase Contract Agent
By:
Authorized Officer
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of _______ ___, (as may be
supplemented from time to time, the "Purchase Contract Agreement"), between
the Company and The First National Bank of Chicago, as Purchase Contract
Agent (herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Agent, the Company, and the Holders and of the
terms upon which the Income PRIDES Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of
this Income PRIDES Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount
(the "Purchase Price"), a number of shares of Common Stock of the Company
equal to the Settlement Rate, unless, on or prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event with respect
to the Security of which such Purchase Contract is a part or an Early
Settlement shall have occurred. The "Settlement Rate" is equal to (a) if
the Applicable Market Value (as defined below) is equal to or greater than
$ (the "Threshold Appreciation Price"), shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $ , the number of shares of Common
Stock per Purchase Contract equal to the Stated Amount divided by the
Applicable Market Value and (c) if the Applicable Market Amount is less
than or equal to $ , shares of Common Stock per Purchase Contract, in each
case subject to adjustment as provided in the Purchase Contract Agreement.
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of
the related Income PRIDES to purchase at the Purchase Price, and the
Company to sell, a number of newly issued shares of Common Stock equal to
the Early Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing
Price per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.
The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on the New York
Stock Exchange (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange
on which the Common Stock is so listed, or if the Common Stock is not so
listed on a United States national or regional securities exchange, as
reported by The Nasdaq Stock Market, or, if the Common Stock is not so
reported, the last quoted bid price for the Common Stock in the over-the-
counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of
the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement,
the Holder of this Income PRIDES Certificate shall pay the Purchase Price
for the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby by effecting a Cash Settlement, or an Early Settlement or
from the proceeds of a remarketing of the related Pledged Preferred
Securities of such holders. A Holder of Income PRIDES who does not elect,
on or prior to 5:00 p.m. New York City time on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, to make an
effective Cash Settlement or an Early Settlement, shall pay the Purchase
Price for the shares of Common Stock to be issued under the related
Purchase Contract from the Proceeds of the sale of the related Pledged
Preferred Securities held by the Collateral Agent. Such sale will be made
by the Remarketing Agent pursuant to the terms of the Remarketing Agreement
and the Remarketing Underwriting Agreement on the third Business Day
immediately preceding the Purchase Contract Settlement Date. If, as
provided in the Purchase Contract Agreement, upon the occurrence of a
Failed Remarketing the Collateral Agent, for the benefit of the Company,
exercises its rights as a secured creditor with respect to the Pledged
Preferred Securities related to this Income PRIDES certificate, any accrued
and unpaid distributions (including deferred distributions) on such Pledged
Preferred Securities will become payable by the Company to the holder of
this Income PRIDES Certificate in the manner provided for in the Purchase
Contract Agreement.
The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment in full of the
aggregate purchase price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
Each Purchase Contract evidenced hereby and all obligations and
rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall give written notice to the Agent and to the
Holders, at their addresses as they appear in the Income PRIDES Register.
Upon and after the occurrence of a Termination Event, the Collateral Agent
shall release the Pledged Preferred Security (as defined in the Pledge
Agreement) or the appropriate Applicable Ownership Interest of the Treasury
Portfolio forming a part of each Income PRIDES, or the Liquidation
Distribution received in respect of such Pledged Preferred Security, from
the Pledge. An Income PRIDES shall thereafter represent the right to
receive the Preferred Security or the appropriate Applicable Ownership
Interest of the Treasury Portfolio forming a part of such Income PRIDES, or
the Liquidation Distribution received in respect of such Preferred
Security, in accordance with the terms of the Purchase Contract Agreement
and the Pledge Agreement.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining
to the Pledged Preferred Securities. Upon receipt of notice of any meeting
at which holders of Preferred Securities are entitled to vote or upon the
solicitation of consents, waivers or proxies of holders of Preferred
Securities, the Agent shall, as soon as practicable thereafter, mail to the
Income PRIDES holders a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Income
PRIDES holder on the record date set by the Agent therefor (which, to the
extent possible, shall be the same date as the record date for determining
the holders of Preferred Securities entitled to vote) shall be entitled to
instruct the Agent as to the exercise of the voting rights pertaining to
the Preferred Securities constituting a part of such holder's Income PRIDES
and (c) stating the manner in which such instructions may be given. Upon
the written request of the Income PRIDES Holders on such record date, the
Agent shall endeavor insofar as practicable to vote or cause to be voted,
in accordance with the instructions set forth in such requests, the maximum
number of Preferred Securities as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of an Income PRIDES, the Agent shall abstain from voting the
Preferred Security evidenced by such Income PRIDES.
Upon the occurrence of an Investment Company Event or liquidation
of the Trust, a principal amount of the Debentures constituting the assets
of the Trust and underlying the Preferred Securities equal to the aggregate
Stated Amount of the Pledged Preferred Securities shall be delivered to the
Collateral Agent in exchange for Pledged Preferred Securities. Thereafter,
the Debentures shall be held by the Collateral Agent to secure the
obligations of each Holder of Income PRIDES to purchase shares of Common
Stock under the Purchase Contracts constituting a part of such Income
PRIDES. Following the liquidation of the Trust, the Holders and the
Collateral Agent shall have such security interests, rights and obligations
with respect to the Debentures as the Holders and the Collateral Agent had
in respect of the Pledged Preferred Securities, and any reference in the
Purchase Contract Agreement or Pledge Agreement to the Preferred Securities
shall be deemed to be a reference to the Debentures.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable on the Tax
Event Redemption Date with respect to the Applicable Principal Amount of
Debentures shall be delivered to the Collateral Agent in exchange for the
Pledged Preferred Securities. Thereafter, pursuant to the terms of the
Pledge Agreement, the Collateral Agent for the benefit of the Company will
apply an amount equal to the Redemption Amount of such Redemption Price to
purchase, the Treasury Portfolio and promptly remit the remaining portion
of such Redemption Price to the Agent for payment to the Holders of such
Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests rights and obligations
with respect to the Treasury Portfolio as the Holder of Income PRIDES and
the Collateral Agent had in respect of the Preferred Security or
Debentures, as the case may be, subject to the Pledge thereof as provided
in Articles II, III, IV, V and VI, of the Pledge Agreement and any
reference herein to the Preferred Security or the Debenture shall be deemed
to be reference to such Treasury Portfolio.
The Income PRIDES Certificates are issuable only in registered
form and only in denominations of a single Income PRIDES and any integral
multiple thereof. The transfer of any Income PRIDES Certificate will be
registered and Income PRIDES Certificates may be exchanged as provided in
the Purchase Contract Agreement. The Income PRIDES Registrar may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange,
but the Company and the Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A holder who elects to substitute a Treasury Security for Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, thereby creating Growth PRIDES, shall be responsible for any
fees or expenses payable in connection therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract
underlying an Income PRIDES remains in effect, such Income PRIDES shall not
be separable into its constituent parts, and the rights and obligations of
the Holder of such Income PRIDES in respect of the Preferred Security or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, and Purchase Contract constituting such Income PRIDES may
be transferred and exchanged only as an Income PRIDES. The holder of an
Income PRIDES may substitute for the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio
securing its obligation under the related Purchase Contract Treasury
Securities in an aggregate principal amount equal to the aggregate Stated
Amount of the Pledged Preferred Securities or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) in the Treasury Portfolio in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, the Security for which such Pledged Treasury
Securities secures the holder's obligation under the Purchase Contract
shall be referred to as a "Growth PRIDES." A Holder may make such
Collateral Substitution only in integral multiples of 20 Income PRIDES for
20 Growth PRIDES; provided, however, that if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the Income
PRIDES, a Holder may make such Collateral Substitutions only in integral
multiples of 160,000 Income PRIDES for 160,000 Growth PRIDES. Such
Collateral Substitution may cause the equivalent aggregate principal amount
of this Certificate to be increased or decreased; provided, however, the
equivalent aggregate principal amount outstanding under this Income PRIDES
Certificate shall not exceed $200,000,000. All such adjustments to the
equivalent aggregate principal amount of this Income PRIDES Certificate
shall be duly recorded by placing an appropriate notation on the Schedule
attached hereto.
A Holder of Growth PRIDES may create or recreate Income PRIDES by
delivering to the Collateral Agent Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, with a Stated
Amount, in the case of such Preferred Securities, or with the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, in the case of such appropriate
Applicable Ownership Interest of the Treasury Portfolio, equal to the
aggregate principal amount of the Pledged Treasury Securities in exchange
for the release of such Pledged Treasury Securities in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall pay,
on each Payment Date, the Contract Adjustment Payments payable in respect
of each Purchase Contract to the Person in whose name the Income PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment
Payments will be payable at the office of the Agent in The City of New York
or, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Income PRIDES
Register.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the payment of any or all of
the Contract Adjustment Payments otherwise payable on any Payment Date, but
only if the Company shall give the Holders and the Agent written notice of
its election to defer such payment (specifying the amount to be deferred)
as provided in the Purchase Contract Agreement. Any Contract Adjustment
Payments so deferred shall bear additional Contract Adjustment Payments
thereon at the rate of ____% per annum (computed on the basis of a 360 day
year of twelve 30 day months), compounding on each succeeding Payment Date,
until paid in full (such deferred installments of Contract Adjustment
Payments, if any, together with the additional Contract Adjustment Payments
accrued thereon, are referred to herein as the "Deferred Contract
Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall
be due on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Income PRIDES Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash
payment, a number of shares of Common Stock equal to (x) the aggregate
amount of Deferred Contract Adjustment Payments payable to the Holder of
this Income PRIDES Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock or make guarantee payments with respect to the foregoing (other than
(i) purchases or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any employee
or agent benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of
such event requiring the Company to purchase capital stock of the Company,
(ii) as a result of a reclassification of the Company's capital stock or
the exchange or conversion of one class or series of the Company's capital
stock for another class or series of the Company's capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (iv) dividends or distributions
in capital stock of the Company (or rights to acquire capital stock) or
repurchases or redemptions of capital stock solely from the issuance or
exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan and a declaration thereunder of
a dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay
any Contract Adjustment Payments or any Deferred Contract Adjustment
Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Agent or the Company,
if, on or prior to the Purchase Contract Settlement Date, a Termination
Event shall have occurred. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Agent, the Collateral Agent and to
the Holders, at their addresses as they appear in the Income PRIDES
Register. Upon and after the occurrence of a Termination Event, the
Collateral Agent shall release the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, from the Pledge in accordance with the provisions of the Pledge
Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement, at the option of the Holder thereof, Purchase
Contracts underlying Securities having an aggregate amount equal to $1,000
or an integral multiple thereof may be settled early ("Early Settlement")
as provided in the Purchase Contract Agreement; provided, however, that if
a Tax Event Redemption has occurred and the Treasury Portfolio has become a
component of the Income PRIDES, Holders may early settle Income PRIDES only
in integral multiples of 160,000 Income PRIDES. In order to exercise the
right to effect Early Settlement with respect to any Purchase Contracts
evidenced by this Income PRIDES Certificate, the Holder of this Income
PRIDES Certificate shall deliver this Income PRIDES Certificate to the
Agent at the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early set forth
below duly completed and accompanied by payment in the form of immediately
available funds payable to the order of the Company in an amount (the
"Early Settlement Amount") equal to (i) the product of (A) the Stated
Amount times (B) the number of Purchase Contracts with respect to which the
Holder has elected to effect Early Settlement, plus (ii) if such delivery
is made with respect to any Purchase Contracts during the period from the
close of business on any Record Date for any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments payable on such Payment Date with respect to such Purchase
Contracts. Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio underlying such
Securities shall be released from the Pledge as provided in the Pledge
Agreement and the Holder shall be entitled to receive a number of shares of
Common Stock on account of each Purchase Contract forming part of a Income
PRIDES as to which Early Settlement is effected equal to the Early
Settlement Rate; provided however, that upon the Early Settlement of the
Purchase Contracts, the Holder thereof will forfeit the right to receive
any Deferred Contract Adjustment Payments, if any, on such Purchase
Contracts. The Early Settlement Rate shall initially be equal to shares of
Common Stock and shall be adjusted in the same manner and at the same time
as the Settlement Rate is adjusted as provided in the Purchase Contract
Agreement.
Upon registration of transfer of this Income PRIDES Certificate,
the transferee shall be bound (without the necessity of any other action on
the part of such transferee, except as may be required by the Agent
pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Income PRIDES Certificate. The Company
covenants and agrees, and the Holder, by its acceptance hereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
The Holder of this Income PRIDES Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Income PRIDES evidenced hereby on his behalf
as his attorney-in-fact, expressly withholds any consent to the assumption
(i.e., affirmance) of the Purchase Contracts by the Company or its trustee
in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Agent to enter into and perform the Pledge Agreement on his
behalf as its attorney-in-fact, and consents to the Pledge of the Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, underlying this Income PRIDES Certificate
pursuant to the Pledge Agreement. The Holder further covenants and agrees,
that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof,
payments in respect to the Stated Amount of the Pledged Preferred
Securities, or the appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, on
the Purchase Contract Settlement Date shall be paid by the Collateral Agent
to the Company in satisfaction of such Holder's obligations under such
Purchase Contract and such Holder shall acquire no right, title or interest
in such payments.
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a
majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Income PRIDES
Certificate is registered as the owner of the Income PRIDES evidenced
hereby for the purpose of receiving payments of distributions payable
quarterly on the Preferred Securities, receiving payments of Contract
Adjustment Payments and any Deferred Contract Adjustment Payments,
performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the
Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement
thereof, entitle the Holder to any of the rights of a holder of shares of
Common Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
(cust) (minor)
Under Uniform Gifts to Minors Act
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)
(Please Print or Type Name and Address Including Postal Zip Code of
Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
attorney to transfer said Income PRIDES Certificates on the books of
CENDANT
Inc. with full power of substitution in the premises.
Dated:
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within Income
PRIDES Certificates in every particular,
without alteration or enlargement or any change
whatsoever.
Signature Guarantee:
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts underlying the number of Income
PRIDES evidenced by this Income PRIDES Certificate be registered in the
name of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different
name and address have been indicated below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will
pay any transfer tax payable incident thereto.
Dated:
Signature
Signature Guarantee:
(if assigned to another person)
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER a Person
other than the Holder,
please (i) print such Person's
name and address and (ii) provide a
guarantee of your signature:
Please print name
and address of
Registered
Holder:
Name Name
Address Address
Social Security or other
Taxpayer Identification
Number, if any
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance
with the terms of the Purchase Contract Agreement with respect to the
Purchase Contracts underlying the number of Income PRIDES evidenced by this
Income PRIDES Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase Contracts
underlying Growth PRIDES with an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such Early
Settlement be registered in the name of, and delivered, together with a
check in payment for any fractional share and any Income PRIDES Certificate
representing any Income PRIDES evidenced hereby as to which Early
Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and
address have been indicated below. Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, deliverable upon such Early Settlement will be transferred in
accordance with the transfer instructions set forth below. If shares are to
be registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer tax payable incident thereto.
Dated:
Signature
Signature Guarantee:
Number of Securities evidenced hereby as to which Early
Settlement of the related Purchase Contracts is being elected:
If shares of Common Stock or Income REGISTERED HOLDER PRIDES
Certificates are to be regis-
tered in the name of and delivered to
and Pledged Preferred Securities, or
the Treasury Portfolio, as the case may
be, are to be transferred to a Person
other than the Holder, please print such
Person's name and address:
Please print name
and address of
Registered
Holder:
Name Name
Address Address
Social Security or other
Taxpayer Identification
Number, if any
Transfer Instructions for Pledged Preferred Securities, or the Treasury
Portfolio, as the case may be, Transferable Upon Early Settlement or a
Termination Event:
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate
have been made:
Principal Amount of
Amount of Amount of this Global Certificate Signature of
decrease in Principal increase in Principal following such decrease authorized officer of
Amount of the Global Amount of the Global or Trustee or Securities
Date Certificate Certificate increase Custodian
EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE
NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, 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 requested by an authorized
representative of The Depository Trust Company, and any payment hereon is
made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.
No. Number of Growth PRIDES Cusip No.
Form of Face of Growth PRIDES Certificate
This Growth PRIDES Certificate certifies that __________ is the
registered Holder of the number of Growth PRIDES set forth above. Each
Growth PRIDES represents (i) a 1/20 undivided beneficial ownership
interest, of a Treasury Security having a principal amount at maturity
equal to $1,000, subject to the Pledge of such Treasury Security by such
Holder pursuant to the Pledge Agreement, and (ii) the rights and
obligations of the Holder under one Purchase Contract with Cendant
Corporation, a Delaware corporation (the "Company"). All capitalized terms
used herein which are defined in the Purchase Contract Agreement have the
meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Growth PRIDES evidenced hereby have been pledged
to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion
of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of
this Growth PRIDES Certificate to purchase, and the Company, to sell, on
February 16, 2001 (the "Purchase Contract Settlement Date"), at a price
equal to $50 (the "Stated Amount"), a number of shares of Common stock, no
par value per share ("Common Stock"), of the Company equal to the
Settlement Rate, unless on or prior to the Purchase Contract Settlement
Date there shall have occurred a Termination Event or an Early Settlement
with respect to the Growth PRIDES of which such Purchase Contract is a
part, all as provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby
will be paid by application of the Proceeds from the Treasury Securities
pledged to secure the obligations under such Purchase Contract in
accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each
Purchase Contract evidenced hereby an amount (the "Contract Adjustment
Payments") equal to __% per annum of the Stated Amount, computed on the
basis of the actual number of days elapsed in a year of 360 day year of
twelve 30 day months, as the case may be, subject to deferral at the option
of the Company as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. Such Contract Adjustment Payments
shall be payable to the Person in whose name this Growth PRIDES Certificate
(or a Predecessor Growth PRIDES Certificate) is registered at the close of
business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the
Agent in The City of New York or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address
appears on the Growth PRIDES Register.
Reference is hereby made to the further provisions set forth on
the reverse hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Agent by manual signature, this Growth PRIDES Certificate shall not
be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
CENDANT CORPORATION
By:
Name:
Title:
By:
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under
the Purchase Contracts)
By: THE FIRST NATIONAL BANK OF
CHICAGO, not individually but
solely as Attorney-in-Fact of
such Holder
By:
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF
CHICAGO, as Purchase Contract Agent
By:
Authorized Officer
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of _______ ___, (as may be
supplemented from time to time, the "Purchase Contract Agreement"), between
the Company and The First National Bank of Chicago, as Purchase Contract
Agent (herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Agent, the Company, and the Holders and of the
terms upon which the Income PRIDES Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of
this Income PRIDES Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount
(the "Purchase Price"), a number of shares of Common Stock of the Company
equal to the Settlement Rate, unless, on or prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event with respect
to the Security of which such Purchase Contract is a part or an Early
Settlement shall have occurred. The "Settlement Rate" is equal to (a) if
the Applicable Market Value (as defined below) is equal to or greater than
$ (the "Threshold Appreciation Price"), shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $ , the number of shares of Common
Stock per Purchase Contract equal to the Stated Amount divided by the
Applicable Market Value and (c) if the Applicable Market Amount is less
than or equal to $ , shares of Common Stock per Purchase Contract, in each
case subject to adjustment as provided in the Purchase Contract Agreement.
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of
the related Income PRIDES to purchase at the Purchase Price, and the
Company to sell, a number of newly issued shares of Common Stock equal to
the Early Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing
Price per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.
The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on the New York
Stock Exchange (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange
on which the Common Stock is so listed, or if the Common Stock is not so
listed on a United States national or regional securities exchange, as
reported by The Nasdaq Stock Market, or, if the Common Stock is not so
reported, the last quoted bid price for the Common Stock in the over-the-
counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of
the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement,
the Holder of this Income PRIDES Certificate shall pay the Purchase Price
for the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby by effecting a Cash Settlement, or an Early Settlement or
from the proceeds of a remarketing of the related Pledged Preferred
Securities of such holders. A Holder of Income PRIDES who does not elect,
on or prior to 5:00 p.m. New York City time on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, to make an
effective Cash Settlement or an Early Settlement, shall pay the Purchase
Price for the shares of Common Stock to be issued under the related
Purchase Contract from the Proceeds of the sale of the related Pledged
Preferred Securities held by the Collateral Agent. Such sale will be made
by the Remarketing Agent pursuant to the terms of the Remarketing Agreement
and the Remarketing Underwriting Agreement on the third Business Day
immediately preceding the Purchase Contract Settlement Date. If, as
provided in the Purchase Contract Agreement, upon the occurrence of a
Failed Remarketing the Collateral Agent, for the benefit of the Company,
exercises its rights as a secured creditor with respect to the Pledged
Preferred Securities related to this Income PRIDES certificate, any accrued
and unpaid distributions (including deferred distributions) on such Pledged
Preferred Securities will become payable by the Company to the holder of
this Income PRIDES Certificate in the manner provided for in the Purchase
Contract Agreement.
The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment in full of the
aggregate purchase price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
Each Purchase Contract evidenced hereby and all obligations and
rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall give written notice to the Agent and to the
Holders, at their addresses as they appear in the Income PRIDES Register.
Upon and after the occurrence of a Termination Event, the Collateral Agent
shall release the Pledged Preferred Security (as defined in the Pledge
Agreement) or the appropriate Applicable Ownership Interest of the Treasury
Portfolio forming a part of each Income PRIDES, or the Liquidation
Distribution received in respect of such Pledged Preferred Security, from
the Pledge. An Income PRIDES shall thereafter represent the right to
receive the Preferred Security or the appropriate Applicable Ownership
Interest of the Treasury Portfolio forming a part of such Income PRIDES, or
the Liquidation Distribution received in respect of such Preferred
Security, in accordance with the terms of the Purchase Contract Agreement
and the Pledge Agreement.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining
to the Pledged Preferred Securities. Upon receipt of notice of any meeting
at which holders of Preferred Securities are entitled to vote or upon the
solicitation of consents, waivers or proxies of holders of Preferred
Securities, the Agent shall, as soon as practicable thereafter, mail to the
Income PRIDES holders a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Income
PRIDES holder on the record date set by the Agent therefor (which, to the
extent possible, shall be the same date as the record date for determining
the holders of Preferred Securities entitled to vote) shall be entitled to
instruct the Agent as to the exercise of the voting rights pertaining to
the Preferred Securities constituting a part of such holder's Income PRIDES
and (c) stating the manner in which such instructions may be given. Upon
the written request of the Income PRIDES Holders on such record date, the
Agent shall endeavor insofar as practicable to vote or cause to be voted,
in accordance with the instructions set forth in such requests, the maximum
number of Preferred Securities as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of an Income PRIDES, the Agent shall abstain from voting the
Preferred Security evidenced by such Income PRIDES.
Upon the occurrence of an Investment Company Event or liquidation
of the Trust, a principal amount of the Debentures constituting the assets
of the Trust and underlying the Preferred Securities equal to the aggregate
Stated Amount of the Pledged Preferred Securities shall be delivered to the
Collateral Agent in exchange for Pledged Preferred Securities. Thereafter,
the Debentures shall be held by the Collateral Agent to secure the
obligations of each Holder of Income PRIDES to purchase shares of Common
Stock under the Purchase Contracts constituting a part of such Income
PRIDES. Following the liquidation of the Trust, the Holders and the
Collateral Agent shall have such security interests, rights and obligations
with respect to the Debentures as the Holders and the Collateral Agent had
in respect of the Pledged Preferred Securities, and any reference in the
Purchase Contract Agreement or Pledge Agreement to the Preferred Securities
shall be deemed to be a reference to the Debentures.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Redemption Price payable on the Tax
Event Redemption Date with respect to the Applicable Principal Amount of
Debentures shall be delivered to the Collateral Agent in exchange for the
Pledged Preferred Securities. Thereafter, pursuant to the terms of the
Pledge Agreement, the Collateral Agent for the benefit of the Company will
apply an amount equal to the Redemption Amount of such Redemption Price to
purchase, the Treasury Portfolio and promptly remit the remaining portion
of such Redemption Price to the Agent for payment to the Holders of such
Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests rights and obligations
with respect to the Treasury Portfolio as the Holder of Income PRIDES and
the Collateral Agent had in respect of the Preferred Security or
Debentures, as the case may be, subject to the Pledge thereof as provided
in Articles II, III, IV, V and VI, of the Pledge Agreement and any
reference herein to the Preferred Security or the Debenture shall be deemed
to be reference to such Treasury Portfolio.
The Income PRIDES Certificates are issuable only in registered
form and only in denominations of a single Income PRIDES and any integral
multiple thereof. The transfer of any Income PRIDES Certificate will be
registered and Income PRIDES Certificates may be exchanged as provided in
the Purchase Contract Agreement. The Income PRIDES Registrar may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange,
but the Company and the Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A holder who elects to substitute a Treasury Security for Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, thereby creating Growth PRIDES, shall be responsible for any
fees or expenses payable in connection therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract
underlying an Income PRIDES remains in effect, such Income PRIDES shall not
be separable into its constituent parts, and the rights and obligations of
the Holder of such Income PRIDES in respect of the Preferred Security or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, and Purchase Contract constituting such Income PRIDES may
be transferred and exchanged only as an Income PRIDES. The holder of an
Income PRIDES may substitute for the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio
securing its obligation under the related Purchase Contract Treasury
Securities in an aggregate principal amount equal to the aggregate Stated
Amount of the Pledged Preferred Securities or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) in the Treasury Portfolio in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, the Security for which such Pledged Treasury
Securities secures the holder's obligation under the Purchase Contract
shall be referred to as a "Growth PRIDES." A Holder may make such
Collateral Substitution only in integral multiples of 20 Income PRIDES for
20 Growth PRIDES; provided, however, that if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the Income
PRIDES, a Holder may make such Collateral Substitutions only in integral
multiples of 160,000 Income PRIDES for 160,000 Growth PRIDES. Such
Collateral Substitution may cause the equivalent aggregate principal amount
of this Certificate to be increased or decreased; provided, however, the
equivalent aggregate principal amount outstanding under this Income PRIDES
Certificate shall not exceed $200,000,000. All such adjustments to the
equivalent aggregate principal amount of this Income PRIDES Certificate
shall be duly recorded by placing an appropriate notation on the Schedule
attached hereto.
A Holder of Growth PRIDES may create or recreate Income PRIDES by
delivering to the Collateral Agent Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, with a Stated
Amount, in the case of such Preferred Securities, or with the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, in the case of such appropriate
Applicable Ownership Interest of the Treasury Portfolio, equal to the
aggregate principal amount of the Pledged Treasury Securities in exchange
for the release of such Pledged Treasury Securities in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall pay,
on each Payment Date, the Contract Adjustment Payments payable in respect
of each Purchase Contract to the Person in whose name the Income PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment
Payments will be payable at the office of the Agent in The City of New York
or, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Income PRIDES
Register.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the payment of any or all of
the Contract Adjustment Payments otherwise payable on any Payment Date, but
only if the Company shall give the Holders and the Agent written notice of
its election to defer such payment (specifying the amount to be deferred)
as provided in the Purchase Contract Agreement. Any Contract Adjustment
Payments so deferred shall bear additional Contract Adjustment Payments
thereon at the rate of ____% per annum (computed on the basis of a 360 day
year of twelve 30 day months), compounding on each succeeding Payment Date,
until paid in full (such deferred installments of Contract Adjustment
Payments, if any, together with the additional Contract Adjustment Payments
accrued thereon, are referred to herein as the "Deferred Contract
Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall
be due on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Income PRIDES Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash
payment, a number of shares of Common Stock equal to (x) the aggregate
amount of Deferred Contract Adjustment Payments payable to the Holder of
this Income PRIDES Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock or make guarantee payments with respect to the foregoing (other than
(i) purchases or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any employee
or agent benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of
such event requiring the Company to purchase capital stock of the Company,
(ii) as a result of a reclassification of the Company's capital stock or
the exchange or conversion of one class or series of the Company's capital
stock for another class or series of the Company's capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (iv) dividends or distributions
in capital stock of the Company (or rights to acquire capital stock) or
repurchases or redemptions of capital stock solely from the issuance or
exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan and a declaration thereunder of
a dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay
any Contract Adjustment Payments or any Deferred Contract Adjustment
Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Agent or the Company,
if, on or prior to the Purchase Contract Settlement Date, a Termination
Event shall have occurred. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Agent, the Collateral Agent and to
the Holders, at their addresses as they appear in the Income PRIDES
Register. Upon and after the occurrence of a Termination Event, the
Collateral Agent shall release the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, from the Pledge in accordance with the provisions of the Pledge
Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement, at the option of the Holder thereof, Purchase
Contracts underlying Securities having an aggregate amount equal to $1,000
or an integral multiple thereof may be settled early ("Early Settlement")
as provided in the Purchase Contract Agreement; provided, however, that if
a Tax Event Redemption has occurred and the Treasury Portfolio has become a
component of the Income PRIDES, Holders may early settle Income PRIDES only
in integral multiples of 160,000 Income PRIDES. In order to exercise the
right to effect Early Settlement with respect to any Purchase Contracts
evidenced by this Income PRIDES Certificate, the Holder of this Income
PRIDES Certificate shall deliver this Income PRIDES Certificate to the
Agent at the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early set forth
below duly completed and accompanied by payment in the form of immediately
available funds payable to the order of the Company in an amount (the
"Early Settlement Amount") equal to (i) the product of (A) the Stated
Amount times (B) the number of Purchase Contracts with respect to which the
Holder has elected to effect Early Settlement, plus (ii) if such delivery
is made with respect to any Purchase Contracts during the period from the
close of business on any Record Date for any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments payable on such Payment Date with respect to such Purchase
Contracts. Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio underlying such
Securities shall be released from the Pledge as provided in the Pledge
Agreement and the Holder shall be entitled to receive a number of shares of
Common Stock on account of each Purchase Contract forming part of a Income
PRIDES as to which Early Settlement is effected equal to the Early
Settlement Rate; provided however, that upon the Early Settlement of the
Purchase Contracts, the Holder thereof will forfeit the right to receive
any Deferred Contract Adjustment Payments, if any, on such Purchase
Contracts. The Early Settlement Rate shall initially be equal to shares of
Common Stock and shall be adjusted in the same manner and at the same time
as the Settlement Rate is adjusted as provided in the Purchase Contract
Agreement.
Upon registration of transfer of this Income PRIDES Certificate,
the transferee shall be bound (without the necessity of any other action on
the part of such transferee, except as may be required by the Agent
pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Income PRIDES Certificate. The Company
covenants and agrees, and the Holder, by its acceptance hereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
The Holder of this Income PRIDES Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Income PRIDES evidenced hereby on his behalf
as his attorney-in-fact, expressly withholds any consent to the assumption
(i.e., affirmance) of the Purchase Contracts by the Company or its trustee
in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Agent to enter into and perform the Pledge Agreement on his
behalf as its attorney-in-fact, and consents to the Pledge of the Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, underlying this Income PRIDES Certificate
pursuant to the Pledge Agreement. The Holder further covenants and agrees,
that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof,
payments in respect to the Stated Amount of the Pledged Preferred
Securities, or the appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, on
the Purchase Contract Settlement Date shall be paid by the Collateral Agent
to the Company in satisfaction of such Holder's obligations under such
Purchase Contract and such Holder shall acquire no right, title or interest
in such payments.
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a
majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Income PRIDES
Certificate is registered as the owner of the Income PRIDES evidenced
hereby for the purpose of receiving payments of distributions payable
quarterly on the Preferred Securities, receiving payments of Contract
Adjustment Payments and any Deferred Contract Adjustment Payments,
performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the
Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement
thereof, entitle the Holder to any of the rights of a holder of shares of
Common Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
(cust) (minor)
Under Uniform Gifts to Minors Act
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)
(Please Print or Type Name and Address Including Postal Zip Code of
Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
attorney to transfer said Income PRIDES Certificates on the books of
CENDANT
Inc. with full power of substitution in the premises.
Dated:
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within Income
PRIDES Certificates in every particular,
without alteration or enlargement or any change
whatsoever.
Signature Guarantee:
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts underlying the number of Income
PRIDES evidenced by this Income PRIDES Certificate be registered in the
name of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different
name and address have been indicated below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will
pay any transfer tax payable incident thereto.
Dated:
Signature
Signature Guarantee:
(if assigned to another person)
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER a Person
other than the Holder,
please (i) print such Person's
name and address and (ii) provide a
guarantee of your signature:
Please print name
and address of
Registered
Holder:
Name Name
Address Address
Social Security or other
Taxpayer Identification
Number, if any
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance
with the terms of the Purchase Contract Agreement with respect to the
Purchase Contracts underlying the number of Income PRIDES evidenced by this
Income PRIDES Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase Contracts
underlying Growth PRIDES with an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such Early
Settlement be registered in the name of, and delivered, together with a
check in payment for any fractional share and any Income PRIDES Certificate
representing any Income PRIDES evidenced hereby as to which Early
Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and
address have been indicated below. Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, deliverable upon such Early Settlement will be transferred in
accordance with the transfer instructions set forth below. If shares are to
be registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer tax payable incident thereto.
Dated:
Signature
Signature Guarantee:
Number of Securities evidenced hereby as to which Early
Settlement of the related Purchase Contracts is being elected:
If shares of Common Stock or Income REGISTERED HOLDER PRIDES
Certificates are to be regis-
tered in the name of and delivered to
and Pledged Preferred Securities, or
the Treasury Portfolio, as the case may
be, are to be transferred to a Person
other than the Holder, please print such
Person's name and address:
Please print name
and address of
Registered
Holder:
Name Name
Address Address
Social Security or other
Taxpayer Identification
Number, if any
Transfer Instructions for Pledged Preferred Securities, or the Treasury
Portfolio, as the case may be, Transferable Upon Early Settlement or a
Termination Event:
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate
have been made:
Principal Amount of
Amount of Amount of this Global Certificate Signature of
decrease in Principal increase in Principal following such decrease authorized officer of
Amount of the Global Amount of the Global or Trustee or Securities
Date Certificate Certificate increase Custodian
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10010-2697
Attention: Corporate Trust Administration Department
Re: FELINE PRIDES of Cendant Corporation (the "Company"),
and Cendant Capital I
We hereby notify you in accordance with Section 4.1 of the Pledge
Agreement, dated as of _______ ___, , among the Company,
yourselves, as Collateral Agent, and ourselves, as Purchase Contract Agent
and as attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES]
from time to time, that the holder of securities listed below (the
"Holder") has elected to substitute [$_____ aggregate [principal amount] of
Treasury Securities] [$_______ Stated Amount of Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] in exchange for the [Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] [Pledged Treasury Securities] held by you in accordance with
the Pledge Agreement and has delivered to us a notice stating that the
Holder has Transferred [Treasury Securities] [Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] to you, as Collateral Agent. We hereby instruct you, upon
receipt of such [Pledged Treasury Securities] [Pledged Preferred Securities
or the appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be], and upon the payment by such Holder of any applicable
fees, to release the [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,]
[Treasury Securities] related to such [Income PRIDES] [Growth PRIDES] to us
in accordance with the Holder's instructions.
Date:
By:
Name:
Title:
Signature Guarantee:
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] for the
[Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities]:
Name
Social Security or other Taxpayer
Identification Number, if any
Address
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Cendant Corporation (the "Company"),
and Cendant Capital I
The undersigned Holder hereby notifies you that it has delivered
to The Chase Manhattan Bank, as Collateral Agent, $_______ aggregate
principal amount of [Treasury Securities] [Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] in exchange for the [Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] [Pledged Treasury Securities] held by the Collateral Agent,
in accordance with Section 4.1 of the Pledge Agreement, dated _______ ___,
, between you, the Company and the Collateral Agent. The undersigned
Holder has paid the Collateral Agent all applicable fees relating to such
exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES].
Date:
By:
Signature Guarantee:
Dated:
Please print name and address of Registered Holder:
Name Social Security or other Taxpayer
Identification Number, if any
Address
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Cendant Corporation (the "Company"),
and Cendant Capital I
The undersigned Holder hereby irrevocably notifies you in
accordance with Section 5.4 of the Purchase Contract Agreement, dated as of
______ ___, among the Company, yourselves, as Purchase Contract Agent
and as Attorney-in-Fact for the Holders of the Purchase Contracts, that
such Holder has elected to pay to the Collateral Agent, on or prior to 5:00
p.m. New York City time, on the Business Day immediately preceding the
Purchase Contract Settlement Date, (in lawful money of the United States by
[certified or cashiers check or] wire transfer, in each case in immediately
available funds), $_________ as the Purchase Price for the shares of Common
Stock issuable to such Holder by the Company under the related Purchase
Contract on the Purchase Contract Settlement Date. The undersigned Holder
hereby instructs you to notify promptly the Collateral Agent of the
undersigned Holders election to make such cash settlement with respect to
the Purchase Contracts related to such Holder's [Income PRIDES] [Growth
PRIDES].
Date:
By:
Signature Guarantee:
Dated:
Please print name and address of Registered Holder:
Name Social Security or other Taxpayer
Identification Number, if any
Address
EXHIBIT 5.1
CENDANT CORPORATION
9 West 57th Street
New York, NY 10019
October 13, 1999
Cendant Corporation
9 West 57th Street
New York, NY 10019
Ladies and Gentlemen:
I am acting as counsel for (1) Cendant Corporation, a corporation
organized under the laws of the State of Delaware (the "Company") and (2)
Cendant Capital II, Cendant Capital III, Cendant Capital IV and Cendant
Capital V, each a statutory business trust formed under the Business Trust
Act of the State of Delaware (each, a "Trust"), in connection with the
preparation of a Registration Statement on Form S-3 (File No. 333-78447)
filed with the Securities and Exchange Commission on May 14, 1999 under the
Securities Act of 1933, as amended (the "Act"), Amendment No. 1 thereto
filed with the Commission on July 12, 1999 and Amendment No. 2 thereto,
filed with the Commission on October 13, 1999 (such Registration Statement,
as so amended, being hereinafter referred to as the "Registration
Statement") in connection with the public offering of the Company's (i)
debentures due 2003 (the "Debentures"), (ii) shares of common stock, $.01
par value per share (collectively, the "Common Stock"), (iii) additional
FELINE PRIDES (the "Additional FELINE PRIDES"), consisting of additional
Income PRIDES (the "Additional Income PRIDES") and additional Growth PRIDES
(the "Additional Growth PRIDES"). Each Additional Income PRIDES will
consist of a Purchase Contract (a "Purchase Contract") to purchase Common
Stock and a Preferred Security (as defined below) of the Trust. Each
Additional Growth PRIDES will consist of a Purchase Contract and a 1/20
interest in a U.S. Treasury Security maturing on February 15, 2001, with a
face amount at maturity of $1,000 (each 1/20 interest, a "Treasury
Security") and (iv) new FELINE PRIDES (the "New FELINE PRIDES") consisting
of new Income PRIDES (the "New Income PRIDES") and new Growth PRIDES (the
"New Growth PRIDES). Each New Income PRIDES will consist of a Purchase
Contract and a Preferred Security. Each New Growth PRIDES will consist of a
Purchase Contract and a Treasury Security. The Registration Statement also
relates to the registration under the Act of Trust Originated Preferred
Securities (the "Preferred Securities"), having a stated liquidation amount
per Preferred Security equal to $50, representing a preferred undivided
beneficial interest in the assets of the applicable Trust and guarantee of
the Preferred Securities by the Company (the "Preferred Securities
Guarantee"). Capitalized terms used but not defined herein are used as
defined in the Registration Statement.
This opinion is being delivered in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, I have examined originals or
copies, certified or otherwise identified to my satisfaction, of (i) the
certificate of trust of Cendant Capital II dated February 5, 1998, the
certificate of trust of Cendant Capital III, dated February 5, 1998, the
certificate of trust of Cendant Capital IV, dated August 20, 1999 and the
Certificate of Trust of Cendant Capital V, dated August 20, 1999, each as
filed with the Secretary of State of the State of Delaware; (ii) the
Declaration for each of the Trusts (including the designation of the terms
of the Preferred Securities annexed thereto); and (iii) the Preferred
Securities. I have also examined originals or copies, certified or
otherwise identified to my satisfaction, of such other documents,
certificates and records as I have deemed necessary or appropriate as a
basis for the opinions set forth herein.
In my examination, I have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to me as originals, the conformity to original
documents of all documents submitted to me as certified or photostatic
copies and the authenticity of the originals of such copies. In making my
examination of documents executed by parties other than the Trust, I have
assumed that such parties had the power, corporate or other, to enter into
and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution
and delivery by such parties of such documents and that such documents
constitute valid and binding obligations of such parties. In addition, I
have assumed that Preferred Securities when executed, will be substantially
in the form reviewed by me. As to any facts material to the opinions
expressed herein which were not independently established or verified, I
have relied upon oral or written statements and representations of
officers, trustees and other representatives of the Company, the Trusts and
others.
I am admitted to the bar in the States of New York and New Jersey,
and I express no opinion as to the laws of any other jurisdiction.
Based on the above, upon and subject to the foregoing, I am of the
opinion that:
1. The Company is a corporation duly incorporated and validly existing
pursuant to the laws of the State of Delaware.
2. The Debentures, the Common Stock, the Purchase Contracts relating
to the Additional Income PRIDES and Additional Growth PRIDES and
the Purchase Contracts relating to the New Income PRIDES and the
New Growth PRIDES , which are covered by the Registration
Statement, when sold will be legally issued by the Company, duly
authorized, fully paid and non-assessable and, in the case of the
Debentures, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms except as such enforcement is subject to any applicable
bankruptcy insolvency, reorganization or other laws relating to or
affecting creditors' rights generally and general principles of
equity.
3. Upon issuance, the Preferred Securities Guarantee will constitute
the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except as such enforcement is subject to any applicable
bankruptcy, insolvency, reorganization or other law relating to or
affecting creditors' rights generally and general principles of
equity.
I hereby consent to the filing of this opinion with the Commission
as an exhibit to the Registration Statement. I also consent to the use of
my name under the heading "Legal Opinions" in the prospectus included in
the Registration Statement. In giving this consent, I do not thereby admit
that I am within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission
promulgated thereunder. This opinion is expressed as of the date hereof
unless otherwise expressly stated and I disclaim any undertaking to advise
you of any subsequent changes in the facts stated or assumed herein or of
any subsequent changes in applicable law.
Very truly yours,
/s/ Eric J. Bock
Eric J. Bock, Esq.
Vice President - Legal
EXHIBIT 5.2
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
October 13, 1999
Cendant Corporation
Cendant Capital II
Cendant Capital III
Cendant Capital IV
Cendant Capital V
c/o Cendant Corporation
9 West 57th Street
New York, NY 10019
Re: Cendant Corporation; Cendant Capital II;
Cendant Capital III; Cendant Capital IV; Cendant
Capital V,Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special counsel to (1) Cendant Corporation
(the "Company"), a corporation organized under the laws of the State of
Delaware, and (2) Cendant Capital II, Cendant Capital III, Cendant Capital
IV and Cendant Capital V (each, a "Trust"and" collectively", the "Trusts"
), each a statutory business trust formed under the Business Trust Act of
the State of Delaware, in connection with the preparation of a Registration
Statement on Form S-3 (File No. 333-78447), filed with the Securities and
Exchange Commission (the "Commission") on May 14, 1999 under the Securities
Act of 1933, as amended (the "Act"), Amendment No. 1, thereto, filed with
the Commission on July 12, 1999, and Amendment No. 2 thereto, filed with
the Commission on October 13, 1999 (such Registration Statement, as so
amended, being hereinafter referred to as the "Registration Statement") in
connection with the public offering of certain securities of the Company
and the Trusts. The Registration Statement relates to the registration
under the Act of the following securities of the Company: (i) debentures
(the "Debentures"), (ii) shares of common stock, $.01 par value per share (
the "Common Stock"), (iii) additional FELINE PRIDES (the "Additional FELINE
PRIDES"), consisting of additional Income PRIDES (the "Additional Income
PRIDES") and additional Growth PRIDES (the "Additional Growth PRIDES) and
(iv) new FELINE PRIDES (the "New FELINE PRIDES") consisting of new Income
PRIDES (the "New Income PRIDES") and new Growth PRIDES (the "New Growth
PRIDES). Each Additional Income PRIDES will consist of a Purchase Contract
(a "Purchase Contract") to purchase a specific number of shares of Common
Stock and a Preferred Security (as defined below) of the applicable Trust.
Each Additional Growth PRIDES will consist of a Purchase Contract and a
1/20 interest in a U.S. Treasury Security maturing on February 15, 2001,
with a face amount at maturity of $1,000 (each 1/20 interest, a "Treasury
Security") Each New Income PRIDES will consist of a Purchase Contract and a
Preferred Security. Each New Growth PRIDES will consist of a Purchase
Contract and a Treasury Security. The Registration Statement also relates
to the registration under the Act of Trust Originated Preferred Securities
of each Trust (the "Preferred Securities"), having a stated liquidation
amount per Preferred Security equal to $50, representing a preferred
undivided beneficial interest in the assets of the applicable Trust and
related guarantees of the Preferred Securities by the Company (the
"Preferred Securities Guarantees"). Capitalized terms used but not defined
herein are used as defined in the Registration Statement.
The Preferred Securities of each Trust are to be issued
pursuant to an Amended and Restated Declaration of Trust of such Trust, a
form of which is attached as an exhibit to the Registration Statement (the
"Declaration"), among the Company, as sponsor, Wilmington Trust Company, as
the institutional trustee (in such capacity, the "Institutional Trustee")
and as the Delaware trustee, and Michael P. Monaco and James E. Buckman, as
regular trustees.
This opinion is being delivered in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
certificate of trust of Cendant Capital II, dated February 5, 1998, the
certificate of trust of Cendant Capital III, dated February 5, 1998, the
certificate of trust of Cendant Capital IV, dated August 20, 1999, and the
certificate of trust of Cendant Capital V, dated August 20, 1999, each as
filed with the Secretary of State of the State of Delaware; (ii) the
Declarations (including the designation of the terms of the Preferred
Securities annexed thereto) for each of the Trusts; and (iii) specimen
certificates of each of the Preferred Securities. We have also examined
originals or copies, certified or otherwise identified to our satisfaction,
of such other documents, certificates and records as we have deemed
necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photo static
copies and the authenticity of the originals of such copies. In making our
examination of documents executed by parties other than the Trusts, we have
assumed that such parties had the power, corporate or other, to enter into
and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution
and delivery by such parties of such documents and that such documents
constitute valid and binding obligations of such parties. As to any facts
material to the opinions expressed herein which were not independently
established or verified, we have relied upon oral or written statements and
representations of officers, trustees and other representatives of the
Company, the Trusts and others.
Members of our firm are admitted to the bar in the States of
New York and Delaware, and we express no opinion as to the laws of any
other jurisdiction.
Based upon and subject to the foregoing and to the other
qualifications and limitations set forth herein, we are of the opinion that
the Preferred Securities have been duly authorized for issuance and, when
issued, executed and authenticated in accordance with the terms of the
applicable Declaration and delivered and paid for as contemplated by the
prospectus supplement included in the Registration Statement, will be
validly issued, fully paid and nonassessable, representing undivided
beneficial interests in the assets of the applicable Trust. We bring to
your attention, however, that the Preferred Securities holders may be
obligated, pursuant to the applicable Declaration, to (i) provide indemnity
and/or security in connection with and pay taxes or governmental charges
arising from transfers of Preferred Securities and (ii) provide security
and indemnity in connection with the requests of or directions to the
Institutional Trustee to exercise its rights and powers under the
applicable Declaration.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. We also consent to
the use of our name under the heading "Legal Matters" in the prospectus
supplement included in the Registration Statement. In giving this consent,
we do not thereby admit that we are within the category of persons whose
consent is required under Section 7 of the Act or the rules and regulations
of the Commission promulgated thereunder. This opinion is expressed as of
the date hereof unless otherwise expressly stated and we disclaim any
undertaking to advise you of any subsequent changes in the facts stated or
assumed herein or of any subsequent changes in applicable law.
Very truly yours,
SKADDEN, ARPS, SLATE, MEAGHER
& FLOM LLP
Exhibit 8.1
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022-3897
TELEPHONE: (212) 735-3000
FACSIMILE: (212) 735-2000
October 13, 1999
Cendant Corporation
Cendant Capital II
c/o Cendant Corporation
9 West 57th Street
New York, New York 10019
Re: Offering of Trust Preferred Securities and FELINE
PRIDES(sm) (Registration Statement No. 333-78447)
Ladies and gentlemen:
We have acted as tax counsel to Cendant corporation, a
corporation organized under the laws of the state of Delaware (the
"Company"), and Cendant Corporation II, a statutory business trust formed
under the Business Trust Act of the State of Delaware (the "Trust"), in
connection with above-captioned registration statement on Form S-3, as
amended (the "Registration Statement"), filed with the Securities and
Exchange Commission (the "Commission") for the purpose of registering (i)
Trust Originated Preferred Securities representing undivided beneficial
interests in the assets of the Trust (the "Preferred Securities"), (ii)
Debentures issued by the Company to the Trust in connection with the sale
of the Preferred Securities (the "Debentures"), and (iii) FELINE PRIDES(sm)
consisting of (A) units (referred to as Income PRIDES(sm)) initially
comprised of stock purchase contracts (the "Purchase Contracts") and
beneficial ownership of Preferred Securities and (B) units (referred to as
Growth PRIDES(sm)) initially comprised of Purchase Contracts and beneficial
ownership of zero-coupon U.S. Treasury Securities, as described in the
Prospectus forming a part of such Registration Statement (the
"Prospectus").
In rendering our opinion, we have participated in the
preparation of the Registration Statement and the Prospectus. Our opinion
is conditioned on, among other things, the initial and continuing accuracy
of the facts, information, covenants and representations set forth in the
Registration Statement, the Prospectus and certain other documents and the
statements and representations made by officers of the Company. In our
examination, we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of
the originals of such documents. We also have assumed that the transactions
related to the issuance of the Preferred Securities, the Debentures, and
the FELINE PRIDES will be consummated in the manner contemplated by the
Registration Statement and the Prospectus.
In rendering our opinion, we have considered the current
provisions of the Internal Revenue Code of 1986, as amended, Treasury
regulations promulgated thereunder, judicial decisions and Internal Revenue
Service rulings, all of which are subject to change, which changes may be
retroactively applied. A change in the authorities upon which our opinion
is based could affect our conclusions. There can be no assurance, moreover,
that any of the opinions expressed herein will be accepted by the Internal
Revenue Service or, if challenged, by a court.
Based solely upon the foregoing, we are of the opinion
that, under current United States federal income tax law, although the
discussion set forth in the Prospectus Supplement under the heading
"CERTAIN FEDERAL INCOME TAX CONSEQUENCES" does not purport to discuss all
possible United States federal income tax consequences of the purchase,
ownership, and disposition of Preferred Securities and FELINE PRIDES, such
discussion constitutes, in all material respects, a fair and accurate
summary of the United States federal income tax consequences of the
purchase, ownership, and disposition of Preferred Securities and FELINE
PRIDES.
Except as set forth above, we express no opinion to any
party as to the tax consequences, whether federal, state, local, or
foreign, of the issuance of the Preferred Securities, the Debentures, or
the FELINE PRIDES or of any transaction related to or contemplated by such
issuance. This opinion is furnished to you solely for your benefit in
connection with the offering of the Preferred Securities and the FELINE
PRIDES and is not to be used, circulated, quoted or otherwise referred to
for any other purpose or relied upon by any other person without our prior
written consent. We consent to the use of our name under the heading "Legal
Matters" in the Prospectus. We hereby consent to the filing of this opinion
with the Commission as Exhibit 8 to the Registration Statement. In giving
this consent, we do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act of
1933 or the rules and regulations of the Commission promulgated thereunder.
This opinion is expressed as of the date hereof, unless otherwise expressly
stated, and we disclaim any undertaking to advise you of any subsequent
changes of the facts stated or assumed herein or any subsequent changes in
applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
EXHIBIT 12.1
CENDANT CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
In connection with the Company's discovery and announcement of accounting
irregularities, previously reported information for periods prior to
December 31, 1994 should not be relied upon. Accordingly, the computation
of Ratio of Earnings to Fixed Charges is presented for the six months ended
June 30, 1999 and for the years subsequent to and
including December 31, 1995.
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
----------------------------------------------------
JUNE 30, 1999 1998 1997 1996 1995
---------------------- ------------ ------------ ------------ ------------
Income from continuing operations before income
taxes, minority interest, extraordinary gain
and cumulative effect of accounting change $ 1,311.6 $ 315.0 $ 257.3 $ 533.5 $ 350.3
Plus: Fixed changes 363.8 676.6 409.4 325.6 291.2
Less: Equity income (loss) in unconsolidated
affiliates 8.0 13.5 51.3 - -
Capitalized interest - - - 0.6 -
Minority interest in
mandatorily preferred securities 48.2 80.4 - - -
---------------------- ------------ ------------ ------------ ------------
Earnings available to cover fixed charges $ 1,619.2 $ 897.7 $ 615.4 $ 858.5 $ 641.5
====================== ============ ============ ============ ==========
Fixed charges (1):
Interest, including amortization of deferred
financing costs $ 278.6 $ 509.0 $ 379.0 $ 299.9 $ 270.4
Capitalized costs - - - 0.6 -
Other charges, financing costs - 27.9 - - -
Minority interest in mandatorily preferred
securities 48.2 80.4 - - -
Interest portion of rental payment 37.0 59.3 30.4 25.1 20.8
---------------------- ------------ ------------ ------------ ------------
Total fixed charges $ 363.8 $ 676.6 $ 409.4 $ 325.6 $ 291.2
====================== ============ ============ ============ ============
Ratio of earnings to fixed charges 4.4x(2) 1.33x(3) 1.50x(3) 2.64x(3) 2.20x(3)
====================== ============ ============ ============ ============
- ---------------
(1) Fixed charges consist of interest expense on all indebtedness
(including amortization of deferred financing costs) and the
portion of operating lease rental expense that is representative of
the interest factor (deemed to be one-third of operating lease
rentals).
(2) For the six months June 30, 1999, income from continuing operations
before income taxes and minority interest includes non-recurring
charges of $36.9 million and a net gain on disposition of
businesses of $749.5 million. Excluding such items, the ratio of
earnings to fixed charges for the six months ended June 30, 1999 is
2.49x.
(3) For the years ended December 31, 1998, 1997, 1996 and 1995, income
from continuing operations before income taxes, minority interest,
extraordinary gain and cumulative effect of accounting change
includes non-recurring other charges of $810.4 million (exclusive
of financing costs of $27.9 million), $704.1 million, $109.4
million and $97.0 million, respectively. Excluding such charges,
the ratio of earnings to fixed charges for the years ended December
31, 1998, 1997, 1996 and 1995 is 2.52x, 3.22x, 2.97x and 2.54x,
respectively.
EXHIBIT 23.1
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Amendment No. 2 to
Registration Statement number 333-78447 of Cendant Corporation on form S-3
of our report dated October 8, 1999, appearing in the Annual Report of
Cendant Corporation on form 10- K/A for the year ended December 31, 1998
(which expresses an unqualified opinion and includes an explanatory
paragraph relating to certain litigation as described in Note 18, and the
change in the method of recognizing revenue and membership solicitation
costs as described in Note 2) and to the reference to us under the heading
"Experts" in the Prospectus, which is part of such Registration Statement.
/s/ Deloitte & Touche LLP
Parsippany, New Jersey
October 8, 1999
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
PHH Corporation:
We consent to the incorporation by reference in Amendment No. 2 to the
Registration Statement on Form S-3 (No. 333-78447) of Cendant Corporation
of our report dated April 30, 1997, with respect to the consolidated
statements of income, shareholder's equity and cash flows of PHH
Corporation and subsidiaries (the "Company") for the year ended December
31, 1996, before the restatement related to the merger of Cendant
Corporation's relocation business with the Company and reclassifications to
conform to the presentation used by Cendant Corporation, which report is
included in the Annual Report on Form 10-K/A of Cendant Corporation for the
year ended December 31, 1998. We also consent to the reference to our name
under the heading "Experts" in the Registration Statement.
KPMG LLP
Baltimore, Maryland
October 7, 1999
_____________________________________________________________________________
_____________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________________________
FORM T- 1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) ________________
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5691211
(State of Incorporation (I.R.S. employer
If not a U.S. national bank) Identification number)
One Liberty Plaza
New York, N.Y.
(Address of principal 10006
Executive office) (Zip code)
_____________________________________________________________________________
CENDANT CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
060918165
(I.R.S. employer identification no.)
6 Sylvan Way
Parsippany, N.J. 07054
(Address of principal executive offices) (Postal Code)
_____________________________________________________________________________
SENIOR DEBENTURES
(Title of the indenture securities)
Item 1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Reserve Bank of New York
33 Liberty Street
New York, N. Y. 10045
State of New York Banking Department
State House, Albany, N.Y.
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust
powers.
Item 2. Affiliation with the Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation. The obligor is not an affiliate of the
Trustee.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
Exhibit I - Copy of the Organization Certificate of the
Trustee as now in effect. (Exhibit I to T-1 to
Registration Statement No. 3336688).
Exhibit 2 - Copy of the Certificate of Authority of the
Trustee to commerce business. (Exhibit 2 to T-1 to
Registration Statement No. 333-6688).
Exhibit 3 - None; authorization to exercise corporate trust
powers is contained in the documents identified
above as Exhibit I and 2.
Exhibit 4 - Copy of the existing By-Laws of the Trustee.
(Exhibit 4 to T- 1 to Registration Statement No.
333-6688).
Exhibit 5 - No Indenture referred to in Item 4.
Exhibit 6 - The consent of the Trustee required by Section
321 (b) of the Trust Indenture Act of 1939.(Exhibit
6 to T-1 to Registration Statement No. 333-27685).
Exhibit 7 - Copy of the latest Report of Condition of the
Trustee as of June 30, 1999
SIGNATURE
Pursuant to the requirements of the Trust Indenture
Act of 1939, the Trustee, The Bank of Nova Scotia Trust Company of New
York, a corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
New York, and State of New York, on the 1st day of September, 1999.
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK
By: /s/ Warren Goshine
_________________________
Warren Goshine
Secretary
FFIEC 034
Page RC- I
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK LEGAL TITLE OF BANK
- ---------------------------------------------------------------------------
LEGAL TITLE OF BANK
NEW YORK
- ---------------------------------------------------------------------------
CITY
NEW YORK 10006
- ---------------------------------------------------------------------------
STATE ZIP CODE
FDIC CERTIFICATE NUMBER _ _ _ _ _
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC-BALANCE SHEET
Dollar Amounts in Thousands C100
- -----------------------------------------------------------------------------------------------------------------
Mil Thou
ASSETS
1. Cash and balances due from depository institutions:
a. Noninterest-bearing balances and currency and coin[1,2] ........................ RCON 13 643 1.a.
0081
b. Interest-bearing balances[3] ................................................... RCON 1.b.
0071
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) ..................... RCON 1 371 2.a.
1754
b. Available-for-sale securities (from Schedule RC-8, column D) ................... RCON 0 2.b.
1773
3. Federal funds sold[4] and securities purchased under agreements to resell .......... RCON 3 852 3.
1350
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) RCON 4.a.
2122
b. LESS: Allowance for loan and lease losses 3123 4.b. RCON 4.b.
3123
c. LESS. Allocated transfer risk reserve RCON 4.c.
3128
d. Loans and leases, net of unearned income, allowance, and reserve ............... RCON 0 4.d.
(item 4.a minus 4.b and 4.c) 2125
5. Trading assets RCON 0 5.
3545
6. Premises and fixed assets (including capitalized leases) RCON 243 6.
2145
7. Other real estate owned (from Schedule RC-M) RCON 0 7.
2150
8. Investments in unconsolidated subsidiaries and associated companies RCON 0 8.
(from Schedule RC-M) 2130
9. Customers' liability to this bank on acceptances outstanding RCON 0 9.
2155
10. Intangible assets (from Schedule RC-M) RCON 7 455 10.
2143
11. Other assets (from Schedule RC-F) RCON 779 11.
2160
12. Total assets (sum of items 1 through 11) RCON 28 873 12.
2170
[1] Includes cash items in process of collection and unposted debits.
[2] The amount reported in this item must be greater than or equal to the
sum of Schedule RC-M, items 3.a and 3.b.
[3] Includes time certificates of deposit not held for trading.
[4] Report "term federal funds sold" in Schedule RC, item 4.a, "Loans and
leases, not of unearned income," and in Schedule RC-C, part I.
Before second table
Dollar Amounts in Thousands C100
- -------------------------------------------------------------------------------------------------------------------
Mil Thou
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON 15 928 13.a.
from Schedule RC-E) 2200
(1) Noninterest-bearing[1] RCON 15 764 13.a.(1)
6631
(2) Interest-bearing RCON 164 13.a.(2)
6636
b. In foreign offices, Edge and Agreement subsidiaries,
and IBFs
(1) Noninterest-bearing
(2) Interest-bearing
14. Federal funds purchased[2] and securities sold under RCON 0 14.
agreements to repurchase 2800
15. a. Demand notes issued to the U.S. Treasury RCON 0 15.a.
2840
b. Trading liabilities RCON 0 15.b.
3548
16. Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
a. With a remaining maturity of one year or less IS 0 RCON 0 16.a.
2332
b. With a remaining maturity of more than one year through RCON 0 16.b.
three years A547
c. With a remaining maturity of more than three years RCON 0 16.c.
A548
17. Not applicable
18. Bank's liability on acceptances executed and outstanding RCON 0 18.
2920
19. Subordinated notes and debentures[3] RCON 0 19.
3200
20. Other liabilities (from Schedule RC-G) 12c. . e 2 RCON 2 510 20.
2930
21. Total liabilities Isum, of items 13 through 20) RCON 18 438 21.
2948
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCON 0 23.
3838
24. Common stock RCON 1 000 24.
3230
25. Surplus (exclude all surplus related to preferred stock) RCON 8 200 25.
3839
26. a. Undivided profits and capital reserves RCON 1 235 26.a
3632
b. Net unrealized holding gains (losses) on available-for-sale RCON 0 26.b.
securities 8434
c. Accumulated not gains (losses) on cash flow hedges RCON 0 26.c.
4336
27. Cumulative foreign currency translation adjustments
28. Total equity capital (sum of items 23 through 27) RCON 10 435 28.
3210
29. Total liabilities and equity capital (sum of items 21 and 28) RCON 28 873 29.
3300
Memorandum
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external Number auditors as of any date
during 1998
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated
holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with
generally accepted auditing standards by a certified public accounting
firm (may be required by state chartering authority)
4 = Directors' examination of the bank performed accordance with generally
accepted auditing by standards by other external auditors Imay be
required by a certified public accounting firm which submits state a
report chartering authority) on the bank
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
[1] Includes total demand deposits and nonintarest-bearing time and
savings deposits.
[2] Report "term federal funds purchased" in Schedule RC, item 16,
"Other borrowed money."
[3] Includes limited-life preferred stock and related surplus.
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CENDANT CORPORATION
CENDANT CAPITAL II
(Exact name of obligor as specified in its charter)
Delaware 06-0918165
Delaware 22-3565321
(State of incorporation) (I.R.S. employer identification no.)
9 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive offices) (Zip Code)
Preferred Securities of Cendant Capital II
(Title of the indenture securities)
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is not
an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company,
which includes the certificate of authority of
Wilmington Trust Company to commence business and
the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by
Section 321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of
Wilmington Trust Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 10th
day of September, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Joseph B. Feil By: /s/ Bruce L. Bisson
_______________________ ____________________________
Assistant Secretary Name: Bruce L. Bisson
Title: Vice President
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission
upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: September 20, 1999 By: /s/Bruce L. Bisson
-----------------------------
Name: Bruce L. Bisson
Title: Vice President
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate
the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and
the name of which company was changed to "WILMINGTON TRUST Company" by an
amendment filed in the Office of the Secretary of State on March 18, A.D.
1903, and the Charter or Act of Incorporation of which company has been
from time to time amended and changed by merger agreements pursuant to the
corporation law for state banks and trust companies of the State of
Delaware, does hereby alter and amend its Charter or Act of Incorporation
so that the same as so altered and amended shall in its entirety read as
follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City.
In addition to such principal office, the said corporation
maintains and operates branch offices in the City of Newark, New
Castle County, Delaware, the Town of Newport, New Castle County,
Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle
County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware
Avenue, 2120 Market Street, and 3605 Market Street, all in the
City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from
time to time by the agency or agencies of the government of the
State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court
of law or equity and to make and use a common seal, and
alter the seal at pleasure, to hold, purchase, convey,
mortgage or otherwise deal in real and personal estate
and property, and to appoint such officers and agents as
the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws of
the United States or of this State, to discount bills,
notes or other evidences of debt, to receive deposits of
money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all
the powers, rights, privileges and franchises incident to
a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and to
prepare and give certificates of title for any lands or
premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and disposal
of property of all descriptions, and to prepare and
execute all papers which may be necessary or proper in
such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from executors,
administrators, guardians, public officers, courts,
receivers, assignees, trustees, and from all fiduciaries,
and from all other persons and individuals, and from all
corporations whether state, municipal, corporate or
private, and to rent boxes, safes, vaults and other
receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the
two parties, and in like manner may act as Treasurer of
any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of
any contract or agreement, and the fidelity of persons
holding places of responsibility or trust; to become
surety for any person, or persons, for the faithful
performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations,
or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and to
be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the State
of Delaware or elsewhere; and whenever this Corporation
is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon
it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other
securities, obligations, contracts and evidences of
indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or
of the Government of the United States, or of any state,
territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property,
any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys
of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to
time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the
property held or owned by the Corporation, and to sell
and pledge such bonds, as and when the Board of Directors
shall determine, and in the promotion of its said
corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate
or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to
the same extent as natural persons might or could do, and
in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association
or corporation, and to pay for the same in cash, stock of
this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner
the whole or any part of any business so acquired, and to
exercise all the powers necessary or convenient in and
about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts
of every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw,
make, accept, endorse, discount, execute and issue
promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any
of its operations and businesses, without restriction to
the same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and
in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said
paragraph) be nowise limited or restricted by reference
to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the
clauses of this paragraph shall be regarded as
independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in
one or more series as may from time to time be determined by the
Board of Directors each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative,
if made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board
of Directors of the Corporation is hereby expressly granted
authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of a particular series of Preferred Stock,
the voting powers and the designations, preferences and relative,
optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the
Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock
of such series to convert the same into or exchange the
same for, shares of any other class or classes or of any
series of the same or any other class or classes of stock
of the Corporation and the terms and conditions of such
conversion or exchange;
(4) Whether or not Preferred Stock of such series shall
be subject to redemption, and the redemption price or
prices and the time or times at which, and the terms and
conditions on which, Preferred Stock of such series may
be redeemed.
(5) The rights, if any, of the holders of Preferred Stock
of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or sale
of assets, dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as
a series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a
class, to elect one or more directors of the Corporation
if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or
under such circumstances and on such conditions as the
Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with
all the requirements, if any, with respect to the setting aside of
sums as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed
in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall
be entitled to receive such dividends as may be declared from time
to time by the Board of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the provisions
of section (b) of this Article FOURTH), to be distributed
to the holders of Preferred Stock in the event of
voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be
entitled to receive all of the remaining assets of the
Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held
by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b)
of this Article FOURTH, each holder of Common Stock shall
have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued
stock, additional authorized issue of shares of any class or
series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, whether such
holders or others, and upon such terms as may be deemed advisable
by the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences
and rights of each other series of Preferred Stock shall, in each
case, be as fixed from time to time by the Board of Directors in
the resolution or resolutions adopted pursuant to authority
granted in section (b) of this Article FOURTH and the consent, by
class or series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time outstanding
shall not be required for the issuance by the Board of Directors
of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock
adopted pursuant to section (b) of this Article FOURTH that the
consent of the holders of a majority (or such greater proportion
as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or
all other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of
Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased
or decreased from time to time by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to
vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than
five nor more than twenty-five as fixed from time to time by vote
of a majority of the whole Board, provided, however, that the
number of directors shall not be reduced so as to shorten the term
of any director at the time in office, and provided further, that
the number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of
one class expiring each year. At the annual meeting of
stockholders in 1982, directors of the first class shall be
elected to hold office for a term expiring at the next succeeding
annual meeting, directors of the second class shall be elected to
hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and any
newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a
quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold
office until the next election of the class for which such
director shall have been chosen and until his successor shall be
elected and qualified. No decrease in the number of directors
shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or the
By-Laws of the Corporation), any director or the entire Board of
Directors of the Corporation may be removed at any time without
cause, but only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a
meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not
made in accordance with the foregoing procedure, and if he should
so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may
be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action
is specifically denied.
SIXTH: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time
to time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon
corporations organized under the Act entitled "An Act Providing a
General Corporation Law", approved March 10, 1899, as from time to
time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their number to
constitute an Executive Committee, which Committee, to the extent
provided in said resolution, or in the By-Laws of the Company,
shall have and may exercise all of the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and shall have power to authorize the seal of the
Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of
the world.
THIRTEENTH: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of the
Corporation by a vote of the majority of the entire Board. The
stockholders may make, alter or repeal any By-Law whether or not
adopted by them, provided however, that any such additional
By-Laws, alterations or repeal may be adopted only by the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this
purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to
time designated by the Board, and the Directors may keep the books
of the Company outside of the State of Delaware at such places as
may be from time to time designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required
by law, and except as otherwise expressly provided in sections (b)
and (c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii)
any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of
related transactions) to or with any Interested
Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of
$1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate
of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or
that some lesser percentage may be specified, by law or in any agreement
with any national securities exchange or otherwise.
(2) The term "business combination" as used in
this Article FIFTEENTH shall mean any
transaction which is referred to in any one or
more of clauses (A) through (E) of paragraph 1
of the section (a).
(b) The provisions of section (a) of this Article
FIFTEENTH shall not be applicable to any particular
business combination and such business combination shall
require only such affirmative vote as is required by law
and any other provisions of the Charter or Act of
Incorporation or By-Laws if such business combination has
been approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual, firm, corporation or
other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation or
any Subsidiary) who or which as of the record date for the
determination of stockholders entitled to notice of and to vote on
such business combination, or immediately prior to the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially
owned by any Interested Stockholder, and such assignment
or succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned
person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares
of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed
owned through application of paragraph (3) above but shall not
include any other Voting Shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights, warrants or
options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
FIFTEENTH on the basis of information known to them, (1)
the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate
of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this
Charter or Act of Incorporation by the By-Laws), the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of the capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this
purpose as one class) shall be required to amend, alter or repeal
any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be
liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director, except to the extent
such exemption from liability or limitation thereof is not
permitted under the Delaware General Corporation Laws as the same
exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with
respect to any act or omission occurring prior to the
time of such repeal or modification."
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or
at such other date, time, or place as may be designated by resolution by
the Board of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the
President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10) days before said
meeting, at his last known address, a written or printed notice fixing the
time and place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined,
shall constitute a quorum at all meetings of stockholders for the
transaction of any business, but the holders of a small number of shares
may adjourn, from time to time, without further notice, until a quorum is
secured. At each annual or special meeting of stockholders, each
stockholder shall be entitled to one vote, either in person or by proxy,
for each share of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as determined
herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the
Company, provided, however, that this limitation shall not apply to any
person who was serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of
the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board of Directors or by the
President, and shall be called upon the written request of a majority of
the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director
of any special meeting of the Board of Directors, and of any change in the
time or place of any regular meeting, stating the time and place of such
meeting, which shall be mailed not less than two days before the time of
holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of
Directors, although less than a quorum, shall have the right to elect the
successor who shall hold office for the remainder of the full term of the
class of directors in which the vacancy occurred, and until such director's
successor shall have been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President
who may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may
appoint at any time such other committees and elect or appoint such other
officers as it may deem advisable. The Board of Directors may also elect at
such meeting one or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or divisions of the Company as it may
deem advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed
of not more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during the
pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members, or at the call of the
Chairman of the Executive Committee or at the call of the Chairman of the
Board of Directors. The majority of its members shall be necessary to
constitute a quorum for the transaction of business. Special meetings of
the Executive Committee may be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company,
and shall direct the disposal of the same, in accordance with such rules
and regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs
and business of the Company by its directors and officers as contemplated
by these By-Laws any two available members of the Executive Committee as
constituted immediately prior to such disaster shall constitute a quorum of
that Committee for the full conduct and management of the affairs and
business of the Company in accordance with the provisions of Article III of
these By-Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available for the
transaction of its business, such Executive Committee shall also be
empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at
such time, of a minimum of two members of such Executive Committee, any
three available directors shall constitute the Executive Committee for the
full conduct and management of the affairs and business of the Company in
accordance with the foregoing provisions of this Section. This By-Law shall
be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose,
and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim
Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its
affairs and business under all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of
not more than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of Directors
and who shall hold office during the pleasure of the Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust funds, in
all matters, however, being subject to the approval of the Board of
Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members or at the call of its
chairman. A majority of its members shall be necessary to constitute a
quorum for the transaction of business.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power
to appoint Committees and/or designate officers or employees of the Company
to whom supervision over the investment of trust funds may be delegated
when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of
five members who shall be selected by the Board of Directors from its own
members, none of whom shall be an officer of the Company, and shall hold
office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought
to its attention by the officer in charge of the Audit Division, review all
reports of examination of the Company made by any governmental agency or
such independent auditor employed for that purpose, and make such
recommendations to the Board of Directors with respect thereto or with
respect to any other matters pertaining to auditing the Company as it shall
deem desirable.
(C) The Audit Committee shall meet whenever
and wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall
constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be
composed of not more than five (5) members who shall be selected by the
Board of Directors from its own members who are not officers of the Company
and who shall hold office during the pleasure of the Board.
(B) The Compensation Committee shall in
general advise upon all matters of policy concerning the Company brought to
its attention by the management and from time to time review the management
of the Company, major organizational matters, including salaries and
employee benefits and specifically shall administer the Executive Incentive
Compensation Plan.
(C) Meetings of the Compensation Committee may
be called at any time by the Chairman of the Compensation Committee, the
Chairman of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director
may be elected by the Board of Directors as an associate director, to serve
during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all
matters brought to the Board, with the exception that he would have no
right to vote. An associate director will be eligible for appointment to
Committees of the Company, with the exception of the Executive Committee,
Audit Committee and Compensation Committee, which must be comprised solely
of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers
and shall perform such duties as the Board of Directors may from time to
time confer and direct. He shall also exercise such powers and perform such
duties as may from time to time be agreed upon between himself and the
President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of
the Board of Directors shall preside at all meetings of the Board of
Directors at which the Chairman of the Board shall not be present and shall
have such further authority and powers and shall perform such duties as the
Board of Directors or the Chairman of the Board may from time to time
confer and direct.
Section 3. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors. In the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and
shall at all times exercise general supervision over the interest, affairs
and operations of the Company and perform all duties incident to his
office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and
such other powers and duties as may from time to time be assigned to them
by the Board of Directors, the Executive Committee, the Chairman of the
Board or the President and by the officer in charge of the department or
division to which they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings
and to recording the same in the minute books of the Company. In addition
to the other notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and mailed
well in advance of the scheduled date of any other meeting. He shall have
custody of the corporate seal and shall affix the same to any documents
requiring such corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and
of all the transactions of the Company. He shall have general supervision
of the expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the Company, and
perform such other duties as may be assigned to him from time to time by
the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including
accounting, and shall render to the Board of Directors at appropriate times
a report relating to the general condition and internal operations of the
Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller
and such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board
of Directors shall prescribe, shall report to and be directly responsible
only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the
Auditor and such duties as may be prescribed by the officer in charge of
the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined
from time to time by the Board of Directors, who shall ex officio hold the
office Assistant Secretary of this Company and who may perform such duties
as may be prescribed by the officer in charge of the department or division
to whom they are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices,
subject to the direction of the Board of Directors, the Executive
Committee, Chairman of the Board of Directors or the President and the
officer in charge of the department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of
stock shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of
Directors and countersigned by the Secretary or Treasurer or an Assistant
Secretary, and the seal of the corporation shall be engraved thereon. Each
certificate shall recite that the stock represented thereby is
transferrable only upon the books of the Company by the holder thereof or
his attorney, upon surrender of the certificate properly endorsed. Any
certificate of stock surrendered to the Company shall be cancelled at the
time of transfer, and before a new certificate or certificates shall be
issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of
Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders
entitled to notice of, and to vote at, any meeting of stockholders and any
adjournment thereof, or entitled to receive payment of any dividend, or to
any allotment or rights, or to exercise any rights in respect of any
change, conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection
with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full
power and authority to enter into, make, sign, execute, acknowledge and/or
deliver and the Secretary or any Assistant Secretary shall have full power
and authority to attest and affix the corporate seal of the Company to any
and all deeds, conveyances, assignments, releases, contracts, agreements,
bonds, notes, mortgages and all other instruments incident to the business
of this Company or in acting as executor, administrator, guardian, trustee,
agent or in any other fiduciary or representative capacity by any and every
method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors
or the Executive Committee, and any and all such instruments shall have the
same force and validity as though expressly authorized by the Board of
Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable
honoraria or fees for attending meetings of the Board of Directors as the
Board of Directors may from time to time determine. Directors and associate
directors who serve as members of committees, other than salaried employees
of the Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall from time
to time determine and directors and associate directors may be employed by
the Company for such special services as the Board of Directors may from
time to time determine and shall be paid for such special services so
performed reasonable compensation as may be determined by the Board of
Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or
may hereafter be amended, any person who was or is made or is threatened to
be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "proceeding")
by reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or
of a partnership, joint venture, trust, enterprise or non-profit entity,
including service with respect to employee benefit plans, against all
liability and loss suffered and expenses reasonably incurred by such
person. The Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by a Director or
officer in his capacity as a Director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the Director or officer to repay all amounts advanced if it
should be ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of expenses, under this Article X is not paid in full within ninety days
after a written claim therefor has been received by the Corporation the
claimant may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have the
burden of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Charter or
Act of Incorporation, these By-Laws, agreement, vote of stockholders or
disinterested Directors or otherwise.
(E) Any repeal or modification of the
foregoing provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all
the members of the Board of Directors then in office.
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has
not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your
state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ----------------------------------------- --------------
Name of Bank City
in the State of DELAWARE, at the close of business on June 30, 1999.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins...................................207,947
Interest-bearing balances................................................................. 0
Held-to-maturity securities.................................................................... 37,680
Available-for-sale securities................................................................1,598,933
Federal funds sold and securities purchased under agreements to resell.........................180,366
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 4,237,557
LESS: Allowance for loan and lease losses. . . . . . 70,233
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve....................4,167,324
Assets held in trading accounts......................................................................0
Premises and fixed assets (including capitalized leases).......................................141,415
Other real estate owned......................................................................... 922
Investments in unconsolidated subsidiaries and associated companies..............................1,227
Customers' liability to this bank on acceptances outstanding.........................................0
Intangible assets............................................................................... 5,179
Other assets...................................................................................104,101
Total assets.................................................................................6,445,094
LIABILITIES
Deposits:
In domestic offices..........................................................................4,574,509
Noninterest-bearing . . . . . . . . 992,436
Interest-bearing. . . . . . . . . . 3,582,073
Federal funds purchased and Securities sold under agreements to repurchase.................... 344,719
Demand notes issued to the U.S. Treasury........................................................83,802
Trading liabilities (from Schedule RC-D).............................................................0
Other borrowed money:..........................................................................///////
With original maturity of one year or less............................................860,000
With original maturity of more than one year...........................................43,000
Bank's liability on acceptances executed and outstanding.............................................0
Subordinated notes and debentures....................................................................0
Other liabilities (from Schedule RC-G)....................................................... 80,279
Total liabilities............................................................................5,986,309
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................................................0
Common Stock.......................................................................................500
Surplus (exclude all surplus related to preferred stock)........................................62,118
Undivided profits and capital reserves.........................................................412,409
Net unrealized holding gains (losses) on available-for-sale securities........................(16,242)
Total equity capital...........................................................................458,785
Total liabilities, limited-life preferred stock, and equity capital..........................6,445,094
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CENDANT CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 06-0918165
(State of incorporation) (I.R.S. employer identification no.)
9 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive offices) (Zip Code)
Guarantees and backup undertakings of Cendant Corporation
in connection with Preferred Securities of Cendant Capital II
by Cendant Corporation
(Title of the indenture securities)
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each affiliation:
Based upon an examination of the books and records of
the trustee and upon information furnished by the obligor, the obligor is
not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement
of Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington
Trust Company to commence business and the
authorization of Wilmington Trust Company to exercise
corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington
Trust Company.
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the trustee, Wilmington Trust Company, a corporation
organized and existing under the laws of Delaware, has duly caused this
Statement of Eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Wilmington and State of
Delaware on the 10th day of September, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/Joseph B. Feil By: /s/Bruce L. Bisson
_______________________ ______________________________
Assistant Secretary Name: Bruce L. Bisson
Title: Vice President
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939,
as amended, Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission
upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: September 20, 1999 By: /s/Bruce L. Bisson
----------------------------
Name: Bruce L. Bisson
Title: Vice President
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate
the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and
the name of which company was changed to "WILMINGTON TRUST Company" by an
amendment filed in the Office of the Secretary of State on March 18, A.D.
1903, and the Charter or Act of Incorporation of which company has been
from time to time amended and changed by merger agreements pursuant to the
corporation law for state banks and trust companies of the State of
Delaware, does hereby alter and amend its Charter or Act of Incorporation
so that the same as so altered and amended shall in its entirety read as
follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City.
In addition to such principal office, the said corporation
maintains and operates branch offices in the City of Newark, New
Castle County, Delaware, the Town of Newport, New Castle County,
Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle
County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware
Avenue, 2120 Market Street, and 3605 Market Street, all in the
City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from
time to time by the agency or agencies of the government of the
State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court
of law or equity and to make and use a common seal, and
alter the seal at pleasure, to hold, purchase, convey,
mortgage or otherwise deal in real and personal estate
and property, and to appoint such officers and agents as
the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws of
the United States or of this State, to discount bills,
notes or other evidences of debt, to receive deposits of
money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all
the powers, rights, privileges and franchises incident to
a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and to
prepare and give certificates of title for any lands or
premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and disposal
of property of all descriptions, and to prepare and
execute all papers which may be necessary or proper in
such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from executors,
administrators, guardians, public officers, courts,
receivers, assignees, trustees, and from all fiduciaries,
and from all other persons and individuals, and from all
corporations whether state, municipal, corporate or
private, and to rent boxes, safes, vaults and other
receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the
two parties, and in like manner may act as Treasurer of
any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of
any contract or agreement, and the fidelity of persons
holding places of responsibility or trust; to become
surety for any person, or persons, for the faithful
performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations,
or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and to
be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the State
of Delaware or elsewhere; and whenever this Corporation
is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon
it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other
securities, obligations, contracts and evidences of
indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or
of the Government of the United States, or of any state,
territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property,
any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys
of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to
time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the
property held or owned by the Corporation, and to sell
and pledge such bonds, as and when the Board of Directors
shall determine, and in the promotion of its said
corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate
or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to
the same extent as natural persons might or could do, and
in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association
or corporation, and to pay for the same in cash, stock of
this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner
the whole or any part of any business so acquired, and to
exercise all the powers necessary or convenient in and
about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts
of every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw,
make, accept, endorse, discount, execute and issue
promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any
of its operations and businesses, without restriction to
the same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and
in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said
paragraph) be nowise limited or restricted by reference
to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the
clauses of this paragraph shall be regarded as
independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in
one or more series as may from time to time be determined by the
Board of Directors each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative,
if made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board
of Directors of the Corporation is hereby expressly granted
authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of a particular series of Preferred Stock,
the voting powers and the designations, preferences and relative,
optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the
Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock
of such series to convert the same into or exchange the
same for, shares of any other class or classes or of any
series of the same or any other class or classes of stock
of the Corporation and the terms and conditions of such
conversion or exchange;
(4) Whether or not Preferred Stock of such series shall
be subject to redemption, and the redemption price or
prices and the time or times at which, and the terms and
conditions on which, Preferred Stock of such series may
be redeemed.
(5) The rights, if any, of the holders of Preferred Stock
of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or sale
of assets, dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as
a series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a
class, to elect one or more directors of the Corporation
if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or
under such circumstances and on such conditions as the
Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with
all the requirements, if any, with respect to the setting aside of
sums as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed
in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall
be entitled to receive such dividends as may be declared from time
to time by the Board of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the provisions
of section (b) of this Article FOURTH), to be distributed
to the holders of Preferred Stock in the event of
voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be
entitled to receive all of the remaining assets of the
Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held
by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b)
of this Article FOURTH, each holder of Common Stock shall
have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued
stock, additional authorized issue of shares of any class or
series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, whether such
holders or others, and upon such terms as may be deemed advisable
by the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences
and rights of each other series of Preferred Stock shall, in each
case, be as fixed from time to time by the Board of Directors in
the resolution or resolutions adopted pursuant to authority
granted in section (b) of this Article FOURTH and the consent, by
class or series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time outstanding
shall not be required for the issuance by the Board of Directors
of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock
adopted pursuant to section (b) of this Article FOURTH that the
consent of the holders of a majority (or such greater proportion
as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or
all other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of
Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased
or decreased from time to time by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to
vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than
five nor more than twenty-five as fixed from time to time by vote
of a majority of the whole Board, provided, however, that the
number of directors shall not be reduced so as to shorten the term
of any director at the time in office, and provided further, that
the number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of
one class expiring each year. At the annual meeting of
stockholders in 1982, directors of the first class shall be
elected to hold office for a term expiring at the next succeeding
annual meeting, directors of the second class shall be elected to
hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and any
newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a
quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold
office until the next election of the class for which such
director shall have been chosen and until his successor shall be
elected and qualified. No decrease in the number of directors
shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or the
By-Laws of the Corporation), any director or the entire Board of
Directors of the Corporation may be removed at any time without
cause, but only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a
meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not
made in accordance with the foregoing procedure, and if he should
so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may
be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action
is specifically denied.
SIXTH: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time
to time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon
corporations organized under the Act entitled "An Act Providing a
General Corporation Law", approved March 10, 1899, as from time to
time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their number to
constitute an Executive Committee, which Committee, to the extent
provided in said resolution, or in the By-Laws of the Company,
shall have and may exercise all of the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and shall have power to authorize the seal of the
Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of
the world.
THIRTEENTH: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of the
Corporation by a vote of the majority of the entire Board. The
stockholders may make, alter or repeal any By-Law whether or not
adopted by them, provided however, that any such additional
By-Laws, alterations or repeal may be adopted only by the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this
purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to
time designated by the Board, and the Directors may keep the books
of the Company outside of the State of Delaware at such places as
may be from time to time designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required
by law, and except as otherwise expressly provided in sections (b)
and (c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii)
any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of
related transactions) to or with any Interested
Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of
$1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate
of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or
that some lesser percentage may be specified, by law or in any agreement
with any national securities exchange or otherwise.
(2) The term "business combination" as used in
this Article FIFTEENTH shall mean any
transaction which is referred to in any one or
more of clauses (A) through (E) of paragraph 1
of the section (a).
(b) The provisions of section (a) of this Article
FIFTEENTH shall not be applicable to any particular
business combination and such business combination shall
require only such affirmative vote as is required by law
and any other provisions of the Charter or Act of
Incorporation or By-Laws if such business combination has
been approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual, firm, corporation or
other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation or
any Subsidiary) who or which as of the record date for the
determination of stockholders entitled to notice of and to vote on
such business combination, or immediately prior to the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially
owned by any Interested Stockholder, and such assignment
or succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned
person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares
of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed
owned through application of paragraph (3) above but shall not
include any other Voting Shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights, warrants or
options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
FIFTEENTH on the basis of information known to them, (1)
the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate
of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this
Charter or Act of Incorporation by the By-Laws), the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of the capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this
purpose as one class) shall be required to amend, alter or repeal
any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be
liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director, except to the extent
such exemption from liability or limitation thereof is not
permitted under the Delaware General Corporation Laws as the same
exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with
respect to any act or omission occurring prior to the
time of such repeal or modification."
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or
at such other date, time, or place as may be designated by resolution by
the Board of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the
President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10) days before said
meeting, at his last known address, a written or printed notice fixing the
time and place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined,
shall constitute a quorum at all meetings of stockholders for the
transaction of any business, but the holders of a small number of shares
may adjourn, from time to time, without further notice, until a quorum is
secured. At each annual or special meeting of stockholders, each
stockholder shall be entitled to one vote, either in person or by proxy,
for each share of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as determined
herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the
Company, provided, however, that this limitation shall not apply to any
person who was serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of
the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board of Directors or by the
President, and shall be called upon the written request of a majority of
the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director
of any special meeting of the Board of Directors, and of any change in the
time or place of any regular meeting, stating the time and place of such
meeting, which shall be mailed not less than two days before the time of
holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of
Directors, although less than a quorum, shall have the right to elect the
successor who shall hold office for the remainder of the full term of the
class of directors in which the vacancy occurred, and until such director's
successor shall have been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President
who may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may
appoint at any time such other committees and elect or appoint such other
officers as it may deem advisable. The Board of Directors may also elect at
such meeting one or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or divisions of the Company as it may
deem advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed
of not more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during the
pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members, or at the call of the
Chairman of the Executive Committee or at the call of the Chairman of the
Board of Directors. The majority of its members shall be necessary to
constitute a quorum for the transaction of business. Special meetings of
the Executive Committee may be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company,
and shall direct the disposal of the same, in accordance with such rules
and regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs
and business of the Company by its directors and officers as contemplated
by these By-Laws any two available members of the Executive Committee as
constituted immediately prior to such disaster shall constitute a quorum of
that Committee for the full conduct and management of the affairs and
business of the Company in accordance with the provisions of Article III of
these By-Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available for the
transaction of its business, such Executive Committee shall also be
empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at
such time, of a minimum of two members of such Executive Committee, any
three available directors shall constitute the Executive Committee for the
full conduct and management of the affairs and business of the Company in
accordance with the foregoing provisions of this Section. This By-Law shall
be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose,
and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim
Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its
affairs and business under all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of
not more than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of Directors
and who shall hold office during the pleasure of the Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust funds, in
all matters, however, being subject to the approval of the Board of
Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members or at the call of its
chairman. A majority of its members shall be necessary to constitute a
quorum for the transaction of business.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power
to appoint Committees and/or designate officers or employees of the Company
to whom supervision over the investment of trust funds may be delegated
when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of
five members who shall be selected by the Board of Directors from its own
members, none of whom shall be an officer of the Company, and shall hold
office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought
to its attention by the officer in charge of the Audit Division, review all
reports of examination of the Company made by any governmental agency or
such independent auditor employed for that purpose, and make such
recommendations to the Board of Directors with respect thereto or with
respect to any other matters pertaining to auditing the Company as it shall
deem desirable.
(C) The Audit Committee shall meet whenever
and wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall
constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be
composed of not more than five (5) members who shall be selected by the
Board of Directors from its own members who are not officers of the Company
and who shall hold office during the pleasure of the Board.
(B) The Compensation Committee shall in
general advise upon all matters of policy concerning the Company brought to
its attention by the management and from time to time review the management
of the Company, major organizational matters, including salaries and
employee benefits and specifically shall administer the Executive Incentive
Compensation Plan.
(C) Meetings of the Compensation Committee may
be called at any time by the Chairman of the Compensation Committee, the
Chairman of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director
may be elected by the Board of Directors as an associate director, to serve
during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all
matters brought to the Board, with the exception that he would have no
right to vote. An associate director will be eligible for appointment to
Committees of the Company, with the exception of the Executive Committee,
Audit Committee and Compensation Committee, which must be comprised solely
of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers
and shall perform such duties as the Board of Directors may from time to
time confer and direct. He shall also exercise such powers and perform such
duties as may from time to time be agreed upon between himself and the
President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of
the Board of Directors shall preside at all meetings of the Board of
Directors at which the Chairman of the Board shall not be present and shall
have such further authority and powers and shall perform such duties as the
Board of Directors or the Chairman of the Board may from time to time
confer and direct.
Section 3. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors. In the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and
shall at all times exercise general supervision over the interest, affairs
and operations of the Company and perform all duties incident to his
office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and
such other powers and duties as may from time to time be assigned to them
by the Board of Directors, the Executive Committee, the Chairman of the
Board or the President and by the officer in charge of the department or
division to which they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings
and to recording the same in the minute books of the Company. In addition
to the other notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and mailed
well in advance of the scheduled date of any other meeting. He shall have
custody of the corporate seal and shall affix the same to any documents
requiring such corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and
of all the transactions of the Company. He shall have general supervision
of the expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the Company, and
perform such other duties as may be assigned to him from time to time by
the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including
accounting, and shall render to the Board of Directors at appropriate times
a report relating to the general condition and internal operations of the
Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller
and such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board
of Directors shall prescribe, shall report to and be directly responsible
only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the
Auditor and such duties as may be prescribed by the officer in charge of
the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined
from time to time by the Board of Directors, who shall ex officio hold the
office Assistant Secretary of this Company and who may perform such duties
as may be prescribed by the officer in charge of the department or division
to whom they are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices,
subject to the direction of the Board of Directors, the Executive
Committee, Chairman of the Board of Directors or the President and the
officer in charge of the department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of
stock shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of
Directors and countersigned by the Secretary or Treasurer or an Assistant
Secretary, and the seal of the corporation shall be engraved thereon. Each
certificate shall recite that the stock represented thereby is
transferrable only upon the books of the Company by the holder thereof or
his attorney, upon surrender of the certificate properly endorsed. Any
certificate of stock surrendered to the Company shall be cancelled at the
time of transfer, and before a new certificate or certificates shall be
issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of
Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders
entitled to notice of, and to vote at, any meeting of stockholders and any
adjournment thereof, or entitled to receive payment of any dividend, or to
any allotment or rights, or to exercise any rights in respect of any
change, conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection
with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full
power and authority to enter into, make, sign, execute, acknowledge and/or
deliver and the Secretary or any Assistant Secretary shall have full power
and authority to attest and affix the corporate seal of the Company to any
and all deeds, conveyances, assignments, releases, contracts, agreements,
bonds, notes, mortgages and all other instruments incident to the business
of this Company or in acting as executor, administrator, guardian, trustee,
agent or in any other fiduciary or representative capacity by any and every
method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors
or the Executive Committee, and any and all such instruments shall have the
same force and validity as though expressly authorized by the Board of
Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable
honoraria or fees for attending meetings of the Board of Directors as the
Board of Directors may from time to time determine. Directors and associate
directors who serve as members of committees, other than salaried employees
of the Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall from time
to time determine and directors and associate directors may be employed by
the Company for such special services as the Board of Directors may from
time to time determine and shall be paid for such special services so
performed reasonable compensation as may be determined by the Board of
Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or
may hereafter be amended, any person who was or is made or is threatened to
be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "proceeding")
by reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or
of a partnership, joint venture, trust, enterprise or non-profit entity,
including service with respect to employee benefit plans, against all
liability and loss suffered and expenses reasonably incurred by such
person. The Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by a Director or
officer in his capacity as a Director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the Director or officer to repay all amounts advanced if it
should be ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of expenses, under this Article X is not paid in full within ninety days
after a written claim therefor has been received by the Corporation the
claimant may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have the
burden of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Charter or
Act of Incorporation, these By-Laws, agreement, vote of stockholders or
disinterested Directors or otherwise.
(E) Any repeal or modification of the
foregoing provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all
the members of the Board of Directors then in office.
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has
not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your
state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ----------------------------------------- --------------
Name of Bank City
in the State of DELAWARE, at the close of business on June 30, 1999.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins...................................207,947
Interest-bearing balances................................................................. 0
Held-to-maturity securities.................................................................... 37,680
Available-for-sale securities................................................................1,598,933
Federal funds sold and securities purchased under agreements to resell.........................180,366
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 4,237,557
LESS: Allowance for loan and lease losses. . . . . . 70,233
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve....................4,167,324
Assets held in trading accounts......................................................................0
Premises and fixed assets (including capitalized leases).......................................141,415
Other real estate owned......................................................................... 922
Investments in unconsolidated subsidiaries and associated companies..............................1,227
Customers' liability to this bank on acceptances outstanding.........................................0
Intangible assets............................................................................... 5,179
Other assets...................................................................................104,101
Total assets.................................................................................6,445,094
LIABILITIES
Deposits:
In domestic offices..........................................................................4,574,509
Noninterest-bearing . . . . . . . . 992,436
Interest-bearing. . . . . . . . . . 3,582,073
Federal funds purchased and Securities sold under agreements to repurchase.................... 344,719
Demand notes issued to the U.S. Treasury........................................................83,802
Trading liabilities (from Schedule RC-D).............................................................0
Other borrowed money:..........................................................................///////
With original maturity of one year or less............................................860,000
With original maturity of more than one year...........................................43,000
Bank's liability on acceptances executed and outstanding.............................................0
Subordinated notes and debentures....................................................................0
Other liabilities (from Schedule RC-G)....................................................... 80,279
Total liabilities............................................................................5,986,309
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................................................0
Common Stock.......................................................................................500
Surplus (exclude all surplus related to preferred stock)........................................62,118
Undivided profits and capital reserves.........................................................412,409
Net unrealized holding gains (losses) on available-for-sale securities........................(16,242)
Total equity capital...........................................................................458,785
Total liabilities, limited-life preferred stock, and equity capital..........................6,445,094
Registration No.
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CENDANT CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 06-0918165
(State of incorporation) (I.R.S. employer identification no.)
9 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive offices) (Zip Code)
Guarantees and backup undertakings of Cendant Corporation
in connection with Preferred Securities of Cendant Capital III
by Cendant Corporation
(Title of the indenture securities)
============================================================================
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is not
an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, Wilmington Trust Company, a corporation organized
and existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 10th
day of September, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/Joseph B. Feil By: /s/Bruce L. Bisson
------------------------ --------------------------------
Assistant Secretary Name: Bruce L. Bisson
Title: Vice President
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission
upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: September 10, 1999 By: ________________________________
Name:
Title: Vice President
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate
the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and
the name of which company was changed to "WILMINGTON TRUST Company" by an
amendment filed in the Office of the Secretary of State on March 18, A.D.
1903, and the Charter or Act of Incorporation of which company has been
from time to time amended and changed by merger agreements pursuant to the
corporation law for state banks and trust companies of the State of
Delaware, does hereby alter and amend its Charter or Act of Incorporation
so that the same as so altered and amended shall in its entirety read as
follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City.
In addition to such principal office, the said corporation
maintains and operates branch offices in the City of Newark, New
Castle County, Delaware, the Town of Newport, New Castle County,
Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle
County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware
Avenue, 2120 Market Street, and 3605 Market Street, all in the
City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from
time to time by the agency or agencies of the government of the
State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court
of law or equity and to make and use a common seal, and
alter the seal at pleasure, to hold, purchase, convey,
mortgage or otherwise deal in real and personal estate
and property, and to appoint such officers and agents as
the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws of
the United States or of this State, to discount bills,
notes or other evidences of debt, to receive deposits of
money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all
the powers, rights, privileges and franchises incident to
a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and to
prepare and give certificates of title for any lands or
premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and disposal
of property of all descriptions, and to prepare and
execute all papers which may be necessary or proper in
such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from executors,
administrators, guardians, public officers, courts,
receivers, assignees, trustees, and from all fiduciaries,
and from all other persons and individuals, and from all
corporations whether state, municipal, corporate or
private, and to rent boxes, safes, vaults and other
receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the
two parties, and in like manner may act as Treasurer of
any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of
any contract or agreement, and the fidelity of persons
holding places of responsibility or trust; to become
surety for any person, or persons, for the faithful
performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations,
or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and to
be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the State
of Delaware or elsewhere; and whenever this Corporation
is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon
it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other
securities, obligations, contracts and evidences of
indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or
of the Government of the United States, or of any state,
territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property,
any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys
of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to
time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the
property held or owned by the Corporation, and to sell
and pledge such bonds, as and when the Board of Directors
shall determine, and in the promotion of its said
corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate
or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to
the same extent as natural persons might or could do, and
in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association
or corporation, and to pay for the same in cash, stock of
this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner
the whole or any part of any business so acquired, and to
exercise all the powers necessary or convenient in and
about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts
of every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw,
make, accept, endorse, discount, execute and issue
promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any
of its operations and businesses, without restriction to
the same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and
in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said
paragraph) be nowise limited or restricted by reference
to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the
clauses of this paragraph shall be regarded as
independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in
one or more series as may from time to time be determined by the
Board of Directors each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative,
if made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board
of Directors of the Corporation is hereby expressly granted
authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of a particular series of Preferred Stock,
the voting powers and the designations, preferences and relative,
optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the
Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock
of such series to convert the same into or exchange the
same for, shares of any other class or classes or of any
series of the same or any other class or classes of stock
of the Corporation and the terms and conditions of such
conversion or exchange;
(4) Whether or not Preferred Stock of such series shall
be subject to redemption, and the redemption price or
prices and the time or times at which, and the terms and
conditions on which, Preferred Stock of such series may
be redeemed.
(5) The rights, if any, of the holders of Preferred Stock
of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or sale
of assets, dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as
a series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a
class, to elect one or more directors of the Corporation
if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or
under such circumstances and on such conditions as the
Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with
all the requirements, if any, with respect to the setting aside of
sums as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed
in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall
be entitled to receive such dividends as may be declared from time
to time by the Board of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the provisions
of section (b) of this Article FOURTH), to be distributed
to the holders of Preferred Stock in the event of
voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be
entitled to receive all of the remaining assets of the
Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held
by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b)
of this Article FOURTH, each holder of Common Stock shall
have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued
stock, additional authorized issue of shares of any class or
series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, whether such
holders or others, and upon such terms as may be deemed advisable
by the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences
and rights of each other series of Preferred Stock shall, in each
case, be as fixed from time to time by the Board of Directors in
the resolution or resolutions adopted pursuant to authority
granted in section (b) of this Article FOURTH and the consent, by
class or series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time outstanding
shall not be required for the issuance by the Board of Directors
of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock
adopted pursuant to section (b) of this Article FOURTH that the
consent of the holders of a majority (or such greater proportion
as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or
all other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of
Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased
or decreased from time to time by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to
vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than
five nor more than twenty-five as fixed from time to time by vote
of a majority of the whole Board, provided, however, that the
number of directors shall not be reduced so as to shorten the term
of any director at the time in office, and provided further, that
the number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of
one class expiring each year. At the annual meeting of
stockholders in 1982, directors of the first class shall be
elected to hold office for a term expiring at the next succeeding
annual meeting, directors of the second class shall be elected to
hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and any
newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a
quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold
office until the next election of the class for which such
director shall have been chosen and until his successor shall be
elected and qualified. No decrease in the number of directors
shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or the
By-Laws of the Corporation), any director or the entire Board of
Directors of the Corporation may be removed at any time without
cause, but only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a
meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not
made in accordance with the foregoing procedure, and if he should
so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may
be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action
is specifically denied.
SIXTH: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time
to time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon
corporations organized under the Act entitled "An Act Providing a
General Corporation Law", approved March 10, 1899, as from time to
time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their number to
constitute an Executive Committee, which Committee, to the extent
provided in said resolution, or in the By-Laws of the Company,
shall have and may exercise all of the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and shall have power to authorize the seal of the
Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of
the world.
THIRTEENTH: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of the
Corporation by a vote of the majority of the entire Board. The
stockholders may make, alter or repeal any By-Law whether or not
adopted by them, provided however, that any such additional
By-Laws, alterations or repeal may be adopted only by the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this
purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to
time designated by the Board, and the Directors may keep the books
of the Company outside of the State of Delaware at such places as
may be from time to time designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required
by law, and except as otherwise expressly provided in sections (b)
and (c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii)
any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of
related transactions) to or with any Interested
Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of
$1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate
of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or
that some lesser percentage may be specified, by law or in any agreement
with any national securities exchange or otherwise.
(2) The term "business combination" as used in
this Article FIFTEENTH shall mean any
transaction which is referred to in any one or
more of clauses (A) through (E) of paragraph 1
of the section (a).
(b) The provisions of section (a) of this Article
FIFTEENTH shall not be applicable to any particular
business combination and such business combination shall
require only such affirmative vote as is required by law
and any other provisions of the Charter or Act of
Incorporation or By-Laws if such business combination has
been approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual, firm, corporation or
other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation or
any Subsidiary) who or which as of the record date for the
determination of stockholders entitled to notice of and to vote on
such business combination, or immediately prior to the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially
owned by any Interested Stockholder, and such assignment
or succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned
person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares
of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed
owned through application of paragraph (3) above but shall not
include any other Voting Shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights, warrants or
options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
FIFTEENTH on the basis of information known to them, (1)
the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate
of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this
Charter or Act of Incorporation by the By-Laws), the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of the capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this
purpose as one class) shall be required to amend, alter or repeal
any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be
liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director, except to the extent
such exemption from liability or limitation thereof is not
permitted under the Delaware General Corporation Laws as the same
exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with
respect to any act or omission occurring prior to the
time of such repeal or modification."
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or
at such other date, time, or place as may be designated by resolution by
the Board of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the
President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10) days before said
meeting, at his last known address, a written or printed notice fixing the
time and place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined,
shall constitute a quorum at all meetings of stockholders for the
transaction of any business, but the holders of a small number of shares
may adjourn, from time to time, without further notice, until a quorum is
secured. At each annual or special meeting of stockholders, each
stockholder shall be entitled to one vote, either in person or by proxy,
for each share of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as determined
herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the
Company, provided, however, that this limitation shall not apply to any
person who was serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of
the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board of Directors or by the
President, and shall be called upon the written request of a majority of
the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director
of any special meeting of the Board of Directors, and of any change in the
time or place of any regular meeting, stating the time and place of such
meeting, which shall be mailed not less than two days before the time of
holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of
Directors, although less than a quorum, shall have the right to elect the
successor who shall hold office for the remainder of the full term of the
class of directors in which the vacancy occurred, and until such director's
successor shall have been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President
who may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may
appoint at any time such other committees and elect or appoint such other
officers as it may deem advisable. The Board of Directors may also elect at
such meeting one or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or divisions of the Company as it may
deem advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed
of not more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during the
pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members, or at the call of the
Chairman of the Executive Committee or at the call of the Chairman of the
Board of Directors. The majority of its members shall be necessary to
constitute a quorum for the transaction of business. Special meetings of
the Executive Committee may be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company,
and shall direct the disposal of the same, in accordance with such rules
and regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs
and business of the Company by its directors and officers as contemplated
by these By-Laws any two available members of the Executive Committee as
constituted immediately prior to such disaster shall constitute a quorum of
that Committee for the full conduct and management of the affairs and
business of the Company in accordance with the provisions of Article III of
these By-Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available for the
transaction of its business, such Executive Committee shall also be
empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at
such time, of a minimum of two members of such Executive Committee, any
three available directors shall constitute the Executive Committee for the
full conduct and management of the affairs and business of the Company in
accordance with the foregoing provisions of this Section. This By-Law shall
be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose,
and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim
Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its
affairs and business under all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of
not more than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of Directors
and who shall hold office during the pleasure of the Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust funds, in
all matters, however, being subject to the approval of the Board of
Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members or at the call of its
chairman. A majority of its members shall be necessary to constitute a
quorum for the transaction of business.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power
to appoint Committees and/or designate officers or employees of the Company
to whom supervision over the investment of trust funds may be delegated
when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of
five members who shall be selected by the Board of Directors from its own
members, none of whom shall be an officer of the Company, and shall hold
office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought
to its attention by the officer in charge of the Audit Division, review all
reports of examination of the Company made by any governmental agency or
such independent auditor employed for that purpose, and make such
recommendations to the Board of Directors with respect thereto or with
respect to any other matters pertaining to auditing the Company as it shall
deem desirable.
(C) The Audit Committee shall meet whenever
and wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall
constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be
composed of not more than five (5) members who shall be selected by the
Board of Directors from its own members who are not officers of the Company
and who shall hold office during the pleasure of the Board.
(B) The Compensation Committee shall in
general advise upon all matters of policy concerning the Company brought to
its attention by the management and from time to time review the management
of the Company, major organizational matters, including salaries and
employee benefits and specifically shall administer the Executive Incentive
Compensation Plan.
(C) Meetings of the Compensation Committee may
be called at any time by the Chairman of the Compensation Committee, the
Chairman of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director
may be elected by the Board of Directors as an associate director, to serve
during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all
matters brought to the Board, with the exception that he would have no
right to vote. An associate director will be eligible for appointment to
Committees of the Company, with the exception of the Executive Committee,
Audit Committee and Compensation Committee, which must be comprised solely
of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers
and shall perform such duties as the Board of Directors may from time to
time confer and direct. He shall also exercise such powers and perform such
duties as may from time to time be agreed upon between himself and the
President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of
the Board of Directors shall preside at all meetings of the Board of
Directors at which the Chairman of the Board shall not be present and shall
have such further authority and powers and shall perform such duties as the
Board of Directors or the Chairman of the Board may from time to time
confer and direct.
Section 3. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors. In the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and
shall at all times exercise general supervision over the interest, affairs
and operations of the Company and perform all duties incident to his
office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and
such other powers and duties as may from time to time be assigned to them
by the Board of Directors, the Executive Committee, the Chairman of the
Board or the President and by the officer in charge of the department or
division to which they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings
and to recording the same in the minute books of the Company. In addition
to the other notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and mailed
well in advance of the scheduled date of any other meeting. He shall have
custody of the corporate seal and shall affix the same to any documents
requiring such corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and
of all the transactions of the Company. He shall have general supervision
of the expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the Company, and
perform such other duties as may be assigned to him from time to time by
the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including
accounting, and shall render to the Board of Directors at appropriate times
a report relating to the general condition and internal operations of the
Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller
and such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board
of Directors shall prescribe, shall report to and be directly responsible
only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the
Auditor and such duties as may be prescribed by the officer in charge of
the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined
from time to time by the Board of Directors, who shall ex officio hold the
office Assistant Secretary of this Company and who may perform such duties
as may be prescribed by the officer in charge of the department or division
to whom they are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices,
subject to the direction of the Board of Directors, the Executive
Committee, Chairman of the Board of Directors or the President and the
officer in charge of the department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of
stock shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of
Directors and countersigned by the Secretary or Treasurer or an Assistant
Secretary, and the seal of the corporation shall be engraved thereon. Each
certificate shall recite that the stock represented thereby is
transferrable only upon the books of the Company by the holder thereof or
his attorney, upon surrender of the certificate properly endorsed. Any
certificate of stock surrendered to the Company shall be cancelled at the
time of transfer, and before a new certificate or certificates shall be
issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of
Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders
entitled to notice of, and to vote at, any meeting of stockholders and any
adjournment thereof, or entitled to receive payment of any dividend, or to
any allotment or rights, or to exercise any rights in respect of any
change, conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection
with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full
power and authority to enter into, make, sign, execute, acknowledge and/or
deliver and the Secretary or any Assistant Secretary shall have full power
and authority to attest and affix the corporate seal of the Company to any
and all deeds, conveyances, assignments, releases, contracts, agreements,
bonds, notes, mortgages and all other instruments incident to the business
of this Company or in acting as executor, administrator, guardian, trustee,
agent or in any other fiduciary or representative capacity by any and every
method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors
or the Executive Committee, and any and all such instruments shall have the
same force and validity as though expressly authorized by the Board of
Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable
honoraria or fees for attending meetings of the Board of Directors as the
Board of Directors may from time to time determine. Directors and associate
directors who serve as members of committees, other than salaried employees
of the Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall from time
to time determine and directors and associate directors may be employed by
the Company for such special services as the Board of Directors may from
time to time determine and shall be paid for such special services so
performed reasonable compensation as may be determined by the Board of
Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or
may hereafter be amended, any person who was or is made or is threatened to
be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "proceeding")
by reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or
of a partnership, joint venture, trust, enterprise or non-profit entity,
including service with respect to employee benefit plans, against all
liability and loss suffered and expenses reasonably incurred by such
person. The Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by a Director or
officer in his capacity as a Director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the Director or officer to repay all amounts advanced if it
should be ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of expenses, under this Article X is not paid in full within ninety days
after a written claim therefor has been received by the Corporation the
claimant may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have the
burden of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Charter or
Act of Incorporation, these By-Laws, agreement, vote of stockholders or
disinterested Directors or otherwise.
(E) Any repeal or modification of the
foregoing provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all
the members of the Board of Directors then in office.
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has
not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your
state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ----------------------------------------- --------------
Name of Bank City
in the State of DELAWARE, at the close of business on June 30, 1999.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins...................................207,947
Interest-bearing balances................................................................. 0
Held-to-maturity securities.................................................................... 37,680
Available-for-sale securities................................................................1,598,933
Federal funds sold and securities purchased under agreements to resell.........................180,366
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 4,237,557
LESS: Allowance for loan and lease losses. . . . . . 70,233
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve....................4,167,324
Assets held in trading accounts......................................................................0
Premises and fixed assets (including capitalized leases).......................................141,415
Other real estate owned......................................................................... 922
Investments in unconsolidated subsidiaries and associated companies..............................1,227
Customers' liability to this bank on acceptances outstanding.........................................0
Intangible assets............................................................................... 5,179
Other assets...................................................................................104,101
Total assets.................................................................................6,445,094
LIABILITIES
Deposits:
In domestic offices..........................................................................4,574,509
Noninterest-bearing . . . . . . . . 992,436
Interest-bearing. . . . . . . . . . 3,582,073
Federal funds purchased and Securities sold under agreements to repurchase.................... 344,719
Demand notes issued to the U.S. Treasury........................................................83,802
Trading liabilities (from Schedule RC-D).............................................................0
Other borrowed money:..........................................................................///////
With original maturity of one year or less............................................860,000
With original maturity of more than one year...........................................43,000
Bank's liability on acceptances executed and outstanding.............................................0
Subordinated notes and debentures....................................................................0
Other liabilities (from Schedule RC-G)....................................................... 80,279
Total liabilities............................................................................5,986,309
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................................................0
Common Stock.......................................................................................500
Surplus (exclude all surplus related to preferred stock)........................................62,118
Undivided profits and capital reserves.........................................................412,409
Net unrealized holding gains (losses) on available-for-sale securities........................(16,242)
Total equity capital...........................................................................458,785
Total liabilities, limited-life preferred stock, and equity capital..........................6,445,094
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CENDANT CORPORATION
CENDANT CAPITAL III
(Exact name of obligor as specified in its charter)
Delaware 06-0918165
Delaware 22-3565321
(State of incorporation) (I.R.S. employer identification no.)
9 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive offices) (Zip Code)
Preferred Securities of Cendant Capital III
(Title of the indenture securities)
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is not
an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by
Section 321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington
Trust Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 10th
day of September, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Joseph B. Feil By: /s/ Bruce L. Bisson
------------------------- -------------------------------
Assistant Secretary Name: Bruce L. Bisson
Title: Vice President
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission
upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: September 10, 1999 By: /s/ Bruce L. Bisson
-------------------------------
Name: Bruce L. Bisson
Title: Vice President
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate
the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and
the name of which company was changed to "WILMINGTON TRUST Company" by an
amendment filed in the Office of the Secretary of State on March 18, A.D.
1903, and the Charter or Act of Incorporation of which company has been
from time to time amended and changed by merger agreements pursuant to the
corporation law for state banks and trust companies of the State of
Delaware, does hereby alter and amend its Charter or Act of Incorporation
so that the same as so altered and amended shall in its entirety read as
follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City.
In addition to such principal office, the said corporation
maintains and operates branch offices in the City of Newark, New
Castle County, Delaware, the Town of Newport, New Castle County,
Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle
County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware
Avenue, 2120 Market Street, and 3605 Market Street, all in the
City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from
time to time by the agency or agencies of the government of the
State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court
of law or equity and to make and use a common seal, and
alter the seal at pleasure, to hold, purchase, convey,
mortgage or otherwise deal in real and personal estate
and property, and to appoint such officers and agents as
the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws of
the United States or of this State, to discount bills,
notes or other evidences of debt, to receive deposits of
money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all
the powers, rights, privileges and franchises incident to
a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and to
prepare and give certificates of title for any lands or
premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and disposal
of property of all descriptions, and to prepare and
execute all papers which may be necessary or proper in
such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from executors,
administrators, guardians, public officers, courts,
receivers, assignees, trustees, and from all fiduciaries,
and from all other persons and individuals, and from all
corporations whether state, municipal, corporate or
private, and to rent boxes, safes, vaults and other
receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the
two parties, and in like manner may act as Treasurer of
any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of
any contract or agreement, and the fidelity of persons
holding places of responsibility or trust; to become
surety for any person, or persons, for the faithful
performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations,
or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and to
be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the State
of Delaware or elsewhere; and whenever this Corporation
is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon
it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other
securities, obligations, contracts and evidences of
indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or
of the Government of the United States, or of any state,
territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property,
any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys
of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to
time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the
property held or owned by the Corporation, and to sell
and pledge such bonds, as and when the Board of Directors
shall determine, and in the promotion of its said
corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate
or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to
the same extent as natural persons might or could do, and
in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association
or corporation, and to pay for the same in cash, stock of
this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner
the whole or any part of any business so acquired, and to
exercise all the powers necessary or convenient in and
about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts
of every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw,
make, accept, endorse, discount, execute and issue
promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any
of its operations and businesses, without restriction to
the same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and
in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said
paragraph) be nowise limited or restricted by reference
to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the
clauses of this paragraph shall be regarded as
independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in
one or more series as may from time to time be determined by the
Board of Directors each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative,
if made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board
of Directors of the Corporation is hereby expressly granted
authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of a particular series of Preferred Stock,
the voting powers and the designations, preferences and relative,
optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the
Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock
of such series to convert the same into or exchange the
same for, shares of any other class or classes or of any
series of the same or any other class or classes of stock
of the Corporation and the terms and conditions of such
conversion or exchange;
(4) Whether or not Preferred Stock of such series shall
be subject to redemption, and the redemption price or
prices and the time or times at which, and the terms and
conditions on which, Preferred Stock of such series may
be redeemed.
(5) The rights, if any, of the holders of Preferred Stock
of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or sale
of assets, dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as
a series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a
class, to elect one or more directors of the Corporation
if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or
under such circumstances and on such conditions as the
Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with
all the requirements, if any, with respect to the setting aside of
sums as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed
in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall
be entitled to receive such dividends as may be declared from time
to time by the Board of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the provisions
of section (b) of this Article FOURTH), to be distributed
to the holders of Preferred Stock in the event of
voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be
entitled to receive all of the remaining assets of the
Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held
by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b)
of this Article FOURTH, each holder of Common Stock shall
have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued
stock, additional authorized issue of shares of any class or
series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, whether such
holders or others, and upon such terms as may be deemed advisable
by the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences
and rights of each other series of Preferred Stock shall, in each
case, be as fixed from time to time by the Board of Directors in
the resolution or resolutions adopted pursuant to authority
granted in section (b) of this Article FOURTH and the consent, by
class or series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time outstanding
shall not be required for the issuance by the Board of Directors
of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock
adopted pursuant to section (b) of this Article FOURTH that the
consent of the holders of a majority (or such greater proportion
as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or
all other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of
Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased
or decreased from time to time by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to
vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than
five nor more than twenty-five as fixed from time to time by vote
of a majority of the whole Board, provided, however, that the
number of directors shall not be reduced so as to shorten the term
of any director at the time in office, and provided further, that
the number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of
one class expiring each year. At the annual meeting of
stockholders in 1982, directors of the first class shall be
elected to hold office for a term expiring at the next succeeding
annual meeting, directors of the second class shall be elected to
hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and any
newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a
quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold
office until the next election of the class for which such
director shall have been chosen and until his successor shall be
elected and qualified. No decrease in the number of directors
shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or the
By-Laws of the Corporation), any director or the entire Board of
Directors of the Corporation may be removed at any time without
cause, but only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a
meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not
made in accordance with the foregoing procedure, and if he should
so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may
be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action
is specifically denied.
SIXTH: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time
to time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon
corporations organized under the Act entitled "An Act Providing a
General Corporation Law", approved March 10, 1899, as from time to
time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their number to
constitute an Executive Committee, which Committee, to the extent
provided in said resolution, or in the By-Laws of the Company,
shall have and may exercise all of the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and shall have power to authorize the seal of the
Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of
the world.
THIRTEENTH: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of the
Corporation by a vote of the majority of the entire Board. The
stockholders may make, alter or repeal any By-Law whether or not
adopted by them, provided however, that any such additional
By-Laws, alterations or repeal may be adopted only by the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this
purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to
time designated by the Board, and the Directors may keep the books
of the Company outside of the State of Delaware at such places as
may be from time to time designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required
by law, and except as otherwise expressly provided in sections (b)
and (c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii)
any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of
related transactions) to or with any Interested
Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of
$1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate
of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or
that some lesser percentage may be specified, by law or in any agreement
with any national securities exchange or otherwise.
(2) The term "business combination" as used in
this Article FIFTEENTH shall mean any
transaction which is referred to in any one or
more of clauses (A) through (E) of paragraph 1
of the section (a).
(b) The provisions of section (a) of this Article
FIFTEENTH shall not be applicable to any particular
business combination and such business combination shall
require only such affirmative vote as is required by law
and any other provisions of the Charter or Act of
Incorporation or By-Laws if such business combination has
been approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual, firm, corporation or
other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation or
any Subsidiary) who or which as of the record date for the
determination of stockholders entitled to notice of and to vote on
such business combination, or immediately prior to the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially
owned by any Interested Stockholder, and such assignment
or succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned
person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares
of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed
owned through application of paragraph (3) above but shall not
include any other Voting Shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights, warrants or
options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
FIFTEENTH on the basis of information known to them, (1)
the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate
of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this
Charter or Act of Incorporation by the By-Laws), the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of the capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this
purpose as one class) shall be required to amend, alter or repeal
any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be
liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director, except to the extent
such exemption from liability or limitation thereof is not
permitted under the Delaware General Corporation Laws as the same
exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with
respect to any act or omission occurring prior to the
time of such repeal or modification."
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or
at such other date, time, or place as may be designated by resolution by
the Board of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the
President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10) days before said
meeting, at his last known address, a written or printed notice fixing the
time and place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined,
shall constitute a quorum at all meetings of stockholders for the
transaction of any business, but the holders of a small number of shares
may adjourn, from time to time, without further notice, until a quorum is
secured. At each annual or special meeting of stockholders, each
stockholder shall be entitled to one vote, either in person or by proxy,
for each share of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as determined
herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the
Company, provided, however, that this limitation shall not apply to any
person who was serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of
the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board of Directors or by the
President, and shall be called upon the written request of a majority of
the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director
of any special meeting of the Board of Directors, and of any change in the
time or place of any regular meeting, stating the time and place of such
meeting, which shall be mailed not less than two days before the time of
holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of
Directors, although less than a quorum, shall have the right to elect the
successor who shall hold office for the remainder of the full term of the
class of directors in which the vacancy occurred, and until such director's
successor shall have been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President
who may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may
appoint at any time such other committees and elect or appoint such other
officers as it may deem advisable. The Board of Directors may also elect at
such meeting one or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or divisions of the Company as it may
deem advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed
of not more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during the
pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members, or at the call of the
Chairman of the Executive Committee or at the call of the Chairman of the
Board of Directors. The majority of its members shall be necessary to
constitute a quorum for the transaction of business. Special meetings of
the Executive Committee may be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company,
and shall direct the disposal of the same, in accordance with such rules
and regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs
and business of the Company by its directors and officers as contemplated
by these By-Laws any two available members of the Executive Committee as
constituted immediately prior to such disaster shall constitute a quorum of
that Committee for the full conduct and management of the affairs and
business of the Company in accordance with the provisions of Article III of
these By-Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available for the
transaction of its business, such Executive Committee shall also be
empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at
such time, of a minimum of two members of such Executive Committee, any
three available directors shall constitute the Executive Committee for the
full conduct and management of the affairs and business of the Company in
accordance with the foregoing provisions of this Section. This By-Law shall
be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose,
and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim
Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its
affairs and business under all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of
not more than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of Directors
and who shall hold office during the pleasure of the Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust funds, in
all matters, however, being subject to the approval of the Board of
Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members or at the call of its
chairman. A majority of its members shall be necessary to constitute a
quorum for the transaction of business.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power
to appoint Committees and/or designate officers or employees of the Company
to whom supervision over the investment of trust funds may be delegated
when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of
five members who shall be selected by the Board of Directors from its own
members, none of whom shall be an officer of the Company, and shall hold
office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought
to its attention by the officer in charge of the Audit Division, review all
reports of examination of the Company made by any governmental agency or
such independent auditor employed for that purpose, and make such
recommendations to the Board of Directors with respect thereto or with
respect to any other matters pertaining to auditing the Company as it shall
deem desirable.
(C) The Audit Committee shall meet whenever
and wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall
constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be
composed of not more than five (5) members who shall be selected by the
Board of Directors from its own members who are not officers of the Company
and who shall hold office during the pleasure of the Board.
(B) The Compensation Committee shall in
general advise upon all matters of policy concerning the Company brought to
its attention by the management and from time to time review the management
of the Company, major organizational matters, including salaries and
employee benefits and specifically shall administer the Executive Incentive
Compensation Plan.
(C) Meetings of the Compensation Committee may
be called at any time by the Chairman of the Compensation Committee, the
Chairman of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director
may be elected by the Board of Directors as an associate director, to serve
during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all
matters brought to the Board, with the exception that he would have no
right to vote. An associate director will be eligible for appointment to
Committees of the Company, with the exception of the Executive Committee,
Audit Committee and Compensation Committee, which must be comprised solely
of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers
and shall perform such duties as the Board of Directors may from time to
time confer and direct. He shall also exercise such powers and perform such
duties as may from time to time be agreed upon between himself and the
President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of
the Board of Directors shall preside at all meetings of the Board of
Directors at which the Chairman of the Board shall not be present and shall
have such further authority and powers and shall perform such duties as the
Board of Directors or the Chairman of the Board may from time to time
confer and direct.
Section 3. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors. In the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and
shall at all times exercise general supervision over the interest, affairs
and operations of the Company and perform all duties incident to his
office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and
such other powers and duties as may from time to time be assigned to them
by the Board of Directors, the Executive Committee, the Chairman of the
Board or the President and by the officer in charge of the department or
division to which they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings
and to recording the same in the minute books of the Company. In addition
to the other notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and mailed
well in advance of the scheduled date of any other meeting. He shall have
custody of the corporate seal and shall affix the same to any documents
requiring such corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and
of all the transactions of the Company. He shall have general supervision
of the expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the Company, and
perform such other duties as may be assigned to him from time to time by
the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including
accounting, and shall render to the Board of Directors at appropriate times
a report relating to the general condition and internal operations of the
Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller
and such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board
of Directors shall prescribe, shall report to and be directly responsible
only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the
Auditor and such duties as may be prescribed by the officer in charge of
the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined
from time to time by the Board of Directors, who shall ex officio hold the
office Assistant Secretary of this Company and who may perform such duties
as may be prescribed by the officer in charge of the department or division
to whom they are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices,
subject to the direction of the Board of Directors, the Executive
Committee, Chairman of the Board of Directors or the President and the
officer in charge of the department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of
stock shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of
Directors and countersigned by the Secretary or Treasurer or an Assistant
Secretary, and the seal of the corporation shall be engraved thereon. Each
certificate shall recite that the stock represented thereby is
transferrable only upon the books of the Company by the holder thereof or
his attorney, upon surrender of the certificate properly endorsed. Any
certificate of stock surrendered to the Company shall be cancelled at the
time of transfer, and before a new certificate or certificates shall be
issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of
Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders
entitled to notice of, and to vote at, any meeting of stockholders and any
adjournment thereof, or entitled to receive payment of any dividend, or to
any allotment or rights, or to exercise any rights in respect of any
change, conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection
with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full
power and authority to enter into, make, sign, execute, acknowledge and/or
deliver and the Secretary or any Assistant Secretary shall have full power
and authority to attest and affix the corporate seal of the Company to any
and all deeds, conveyances, assignments, releases, contracts, agreements,
bonds, notes, mortgages and all other instruments incident to the business
of this Company or in acting as executor, administrator, guardian, trustee,
agent or in any other fiduciary or representative capacity by any and every
method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors
or the Executive Committee, and any and all such instruments shall have the
same force and validity as though expressly authorized by the Board of
Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable
honoraria or fees for attending meetings of the Board of Directors as the
Board of Directors may from time to time determine. Directors and associate
directors who serve as members of committees, other than salaried employees
of the Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall from time
to time determine and directors and associate directors may be employed by
the Company for such special services as the Board of Directors may from
time to time determine and shall be paid for such special services so
performed reasonable compensation as may be determined by the Board of
Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or
may hereafter be amended, any person who was or is made or is threatened to
be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "proceeding")
by reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or
of a partnership, joint venture, trust, enterprise or non-profit entity,
including service with respect to employee benefit plans, against all
liability and loss suffered and expenses reasonably incurred by such
person. The Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by a Director or
officer in his capacity as a Director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the Director or officer to repay all amounts advanced if it
should be ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of expenses, under this Article X is not paid in full within ninety days
after a written claim therefor has been received by the Corporation the
claimant may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have the
burden of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Charter or
Act of Incorporation, these By-Laws, agreement, vote of stockholders or
disinterested Directors or otherwise.
(E) Any repeal or modification of the
foregoing provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all
the members of the Board of Directors then in office.
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has
not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your
state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ----------------------------------------- --------------
Name of Bank City
in the State of DELAWARE, at the close of business on June 30, 1999.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins...................................207,947
Interest-bearing balances................................................................. 0
Held-to-maturity securities.................................................................... 37,680
Available-for-sale securities................................................................1,598,933
Federal funds sold and securities purchased under agreements to resell.........................180,366
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 4,237,557
LESS: Allowance for loan and lease losses. . . . . . 70,233
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve....................4,167,324
Assets held in trading accounts......................................................................0
Premises and fixed assets (including capitalized leases).......................................141,415
Other real estate owned......................................................................... 922
Investments in unconsolidated subsidiaries and associated companies..............................1,227
Customers' liability to this bank on acceptances outstanding.........................................0
Intangible assets............................................................................... 5,179
Other assets...................................................................................104,101
Total assets.................................................................................6,445,094
LIABILITIES
Deposits:
In domestic offices..........................................................................4,574,509
Noninterest-bearing . . . . . . . . 992,436
Interest-bearing. . . . . . . . . . 3,582,073
Federal funds purchased and Securities sold under agreements to repurchase.................... 344,719
Demand notes issued to the U.S. Treasury........................................................83,802
Trading liabilities (from Schedule RC-D).............................................................0
Other borrowed money:..........................................................................///////
With original maturity of one year or less............................................860,000
With original maturity of more than one year...........................................43,000
Bank's liability on acceptances executed and outstanding.............................................0
Subordinated notes and debentures....................................................................0
Other liabilities (from Schedule RC-G)....................................................... 80,279
Total liabilities............................................................................5,986,309
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................................................0
Common Stock.......................................................................................500
Surplus (exclude all surplus related to preferred stock)........................................62,118
Undivided profits and capital reserves.........................................................412,409
Net unrealized holding gains (losses) on available-for-sale securities........................(16,242)
Total equity capital...........................................................................458,785
Total liabilities, limited-life preferred stock, and equity capital..........................6,445,094
Registration No.
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CENDANT CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 06-0918165
(State of incorporation) (I.R.S. employer identification no.)
9 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive offices) (Zip Code)
Guarantees and backup undertakings of Cendant Corporation
in connection with Preferred Securities of Cendant Capital IV
by Cendant Corporation
(Title of the indenture securities)
=============================================================================
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is not
an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, Wilmington Trust Company, a corporation organized
and existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 10th
day of September, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Joseph B. Feil By: /s/ Bruce L. Bisson
--------------------------- -------------------------------
Assistant Secretary Name: Bruce L. Bisson
Title: Vice President
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission
upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: September 10, 1999 By: ___________________________________
Name:
Title: Vice President
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate
the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and
the name of which company was changed to "WILMINGTON TRUST Company" by an
amendment filed in the Office of the Secretary of State on March 18, A.D.
1903, and the Charter or Act of Incorporation of which company has been
from time to time amended and changed by merger agreements pursuant to the
corporation law for state banks and trust companies of the State of
Delaware, does hereby alter and amend its Charter or Act of Incorporation
so that the same as so altered and amended shall in its entirety read as
follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City.
In addition to such principal office, the said corporation
maintains and operates branch offices in the City of Newark, New
Castle County, Delaware, the Town of Newport, New Castle County,
Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle
County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware
Avenue, 2120 Market Street, and 3605 Market Street, all in the
City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from
time to time by the agency or agencies of the government of the
State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court
of law or equity and to make and use a common seal, and
alter the seal at pleasure, to hold, purchase, convey,
mortgage or otherwise deal in real and personal estate
and property, and to appoint such officers and agents as
the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws of
the United States or of this State, to discount bills,
notes or other evidences of debt, to receive deposits of
money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all
the powers, rights, privileges and franchises incident to
a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and to
prepare and give certificates of title for any lands or
premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and disposal
of property of all descriptions, and to prepare and
execute all papers which may be necessary or proper in
such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from executors,
administrators, guardians, public officers, courts,
receivers, assignees, trustees, and from all fiduciaries,
and from all other persons and individuals, and from all
corporations whether state, municipal, corporate or
private, and to rent boxes, safes, vaults and other
receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the
two parties, and in like manner may act as Treasurer of
any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of
any contract or agreement, and the fidelity of persons
holding places of responsibility or trust; to become
surety for any person, or persons, for the faithful
performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations,
or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and to
be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the State
of Delaware or elsewhere; and whenever this Corporation
is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon
it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other
securities, obligations, contracts and evidences of
indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or
of the Government of the United States, or of any state,
territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property,
any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys
of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to
time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the
property held or owned by the Corporation, and to sell
and pledge such bonds, as and when the Board of Directors
shall determine, and in the promotion of its said
corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate
or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to
the same extent as natural persons might or could do, and
in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association
or corporation, and to pay for the same in cash, stock of
this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner
the whole or any part of any business so acquired, and to
exercise all the powers necessary or convenient in and
about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts
of every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw,
make, accept, endorse, discount, execute and issue
promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any
of its operations and businesses, without restriction to
the same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and
in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said
paragraph) be nowise limited or restricted by reference
to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the
clauses of this paragraph shall be regarded as
independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in
one or more series as may from time to time be determined by the
Board of Directors each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative,
if made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board
of Directors of the Corporation is hereby expressly granted
authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of a particular series of Preferred Stock,
the voting powers and the designations, preferences and relative,
optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the
Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock
of such series to convert the same into or exchange the
same for, shares of any other class or classes or of any
series of the same or any other class or classes of stock
of the Corporation and the terms and conditions of such
conversion or exchange;
(4) Whether or not Preferred Stock of such series shall
be subject to redemption, and the redemption price or
prices and the time or times at which, and the terms and
conditions on which, Preferred Stock of such series may
be redeemed.
(5) The rights, if any, of the holders of Preferred Stock
of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or sale
of assets, dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as
a series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a
class, to elect one or more directors of the Corporation
if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or
under such circumstances and on such conditions as the
Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with
all the requirements, if any, with respect to the setting aside of
sums as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed
in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall
be entitled to receive such dividends as may be declared from time
to time by the Board of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the provisions
of section (b) of this Article FOURTH), to be distributed
to the holders of Preferred Stock in the event of
voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be
entitled to receive all of the remaining assets of the
Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held
by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b)
of this Article FOURTH, each holder of Common Stock shall
have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued
stock, additional authorized issue of shares of any class or
series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, whether such
holders or others, and upon such terms as may be deemed advisable
by the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences
and rights of each other series of Preferred Stock shall, in each
case, be as fixed from time to time by the Board of Directors in
the resolution or resolutions adopted pursuant to authority
granted in section (b) of this Article FOURTH and the consent, by
class or series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time outstanding
shall not be required for the issuance by the Board of Directors
of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock
adopted pursuant to section (b) of this Article FOURTH that the
consent of the holders of a majority (or such greater proportion
as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or
all other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of
Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased
or decreased from time to time by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to
vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than
five nor more than twenty-five as fixed from time to time by vote
of a majority of the whole Board, provided, however, that the
number of directors shall not be reduced so as to shorten the term
of any director at the time in office, and provided further, that
the number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of
one class expiring each year. At the annual meeting of
stockholders in 1982, directors of the first class shall be
elected to hold office for a term expiring at the next succeeding
annual meeting, directors of the second class shall be elected to
hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and any
newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a
quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold
office until the next election of the class for which such
director shall have been chosen and until his successor shall be
elected and qualified. No decrease in the number of directors
shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or the
By-Laws of the Corporation), any director or the entire Board of
Directors of the Corporation may be removed at any time without
cause, but only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a
meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not
made in accordance with the foregoing procedure, and if he should
so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may
be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action
is specifically denied.
SIXTH: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time
to time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon
corporations organized under the Act entitled "An Act Providing a
General Corporation Law", approved March 10, 1899, as from time to
time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their number to
constitute an Executive Committee, which Committee, to the extent
provided in said resolution, or in the By-Laws of the Company,
shall have and may exercise all of the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and shall have power to authorize the seal of the
Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of
the world.
THIRTEENTH: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of the
Corporation by a vote of the majority of the entire Board. The
stockholders may make, alter or repeal any By-Law whether or not
adopted by them, provided however, that any such additional
By-Laws, alterations or repeal may be adopted only by the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this
purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to
time designated by the Board, and the Directors may keep the books
of the Company outside of the State of Delaware at such places as
may be from time to time designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required
by law, and except as otherwise expressly provided in sections (b)
and (c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii)
any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of
related transactions) to or with any Interested
Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of
$1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate
of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or
that some lesser percentage may be specified, by law or in any agreement
with any national securities exchange or otherwise.
(2) The term "business combination" as used in
this Article FIFTEENTH shall mean any
transaction which is referred to in any one or
more of clauses (A) through (E) of paragraph 1
of the section (a).
(b) The provisions of section (a) of this Article
FIFTEENTH shall not be applicable to any particular
business combination and such business combination shall
require only such affirmative vote as is required by law
and any other provisions of the Charter or Act of
Incorporation or By-Laws if such business combination has
been approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual, firm, corporation or
other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation or
any Subsidiary) who or which as of the record date for the
determination of stockholders entitled to notice of and to vote on
such business combination, or immediately prior to the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially
owned by any Interested Stockholder, and such assignment
or succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned
person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares
of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed
owned through application of paragraph (3) above but shall not
include any other Voting Shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights, warrants or
options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
FIFTEENTH on the basis of information known to them, (1)
the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate
of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this
Charter or Act of Incorporation by the By-Laws), the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of the capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this
purpose as one class) shall be required to amend, alter or repeal
any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be
liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director, except to the extent
such exemption from liability or limitation thereof is not
permitted under the Delaware General Corporation Laws as the same
exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with
respect to any act or omission occurring prior to the
time of such repeal or modification."
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or
at such other date, time, or place as may be designated by resolution by
the Board of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the
President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10) days before said
meeting, at his last known address, a written or printed notice fixing the
time and place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined,
shall constitute a quorum at all meetings of stockholders for the
transaction of any business, but the holders of a small number of shares
may adjourn, from time to time, without further notice, until a quorum is
secured. At each annual or special meeting of stockholders, each
stockholder shall be entitled to one vote, either in person or by proxy,
for each share of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as determined
herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the
Company, provided, however, that this limitation shall not apply to any
person who was serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of
the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board of Directors or by the
President, and shall be called upon the written request of a majority of
the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director
of any special meeting of the Board of Directors, and of any change in the
time or place of any regular meeting, stating the time and place of such
meeting, which shall be mailed not less than two days before the time of
holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of
Directors, although less than a quorum, shall have the right to elect the
successor who shall hold office for the remainder of the full term of the
class of directors in which the vacancy occurred, and until such director's
successor shall have been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President
who may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may
appoint at any time such other committees and elect or appoint such other
officers as it may deem advisable. The Board of Directors may also elect at
such meeting one or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or divisions of the Company as it may
deem advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed
of not more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during the
pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members, or at the call of the
Chairman of the Executive Committee or at the call of the Chairman of the
Board of Directors. The majority of its members shall be necessary to
constitute a quorum for the transaction of business. Special meetings of
the Executive Committee may be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company,
and shall direct the disposal of the same, in accordance with such rules
and regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs
and business of the Company by its directors and officers as contemplated
by these By-Laws any two available members of the Executive Committee as
constituted immediately prior to such disaster shall constitute a quorum of
that Committee for the full conduct and management of the affairs and
business of the Company in accordance with the provisions of Article III of
these By-Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available for the
transaction of its business, such Executive Committee shall also be
empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at
such time, of a minimum of two members of such Executive Committee, any
three available directors shall constitute the Executive Committee for the
full conduct and management of the affairs and business of the Company in
accordance with the foregoing provisions of this Section. This By-Law shall
be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose,
and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim
Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its
affairs and business under all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of
not more than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of Directors
and who shall hold office during the pleasure of the Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust funds, in
all matters, however, being subject to the approval of the Board of
Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members or at the call of its
chairman. A majority of its members shall be necessary to constitute a
quorum for the transaction of business.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power
to appoint Committees and/or designate officers or employees of the Company
to whom supervision over the investment of trust funds may be delegated
when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of
five members who shall be selected by the Board of Directors from its own
members, none of whom shall be an officer of the Company, and shall hold
office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought
to its attention by the officer in charge of the Audit Division, review all
reports of examination of the Company made by any governmental agency or
such independent auditor employed for that purpose, and make such
recommendations to the Board of Directors with respect thereto or with
respect to any other matters pertaining to auditing the Company as it shall
deem desirable.
(C) The Audit Committee shall meet whenever
and wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall
constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be
composed of not more than five (5) members who shall be selected by the
Board of Directors from its own members who are not officers of the Company
and who shall hold office during the pleasure of the Board.
(B) The Compensation Committee shall in
general advise upon all matters of policy concerning the Company brought to
its attention by the management and from time to time review the management
of the Company, major organizational matters, including salaries and
employee benefits and specifically shall administer the Executive Incentive
Compensation Plan.
(C) Meetings of the Compensation Committee may
be called at any time by the Chairman of the Compensation Committee, the
Chairman of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director
may be elected by the Board of Directors as an associate director, to serve
during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all
matters brought to the Board, with the exception that he would have no
right to vote. An associate director will be eligible for appointment to
Committees of the Company, with the exception of the Executive Committee,
Audit Committee and Compensation Committee, which must be comprised solely
of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers
and shall perform such duties as the Board of Directors may from time to
time confer and direct. He shall also exercise such powers and perform such
duties as may from time to time be agreed upon between himself and the
President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of
the Board of Directors shall preside at all meetings of the Board of
Directors at which the Chairman of the Board shall not be present and shall
have such further authority and powers and shall perform such duties as the
Board of Directors or the Chairman of the Board may from time to time
confer and direct.
Section 3. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors. In the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and
shall at all times exercise general supervision over the interest, affairs
and operations of the Company and perform all duties incident to his
office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and
such other powers and duties as may from time to time be assigned to them
by the Board of Directors, the Executive Committee, the Chairman of the
Board or the President and by the officer in charge of the department or
division to which they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings
and to recording the same in the minute books of the Company. In addition
to the other notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and mailed
well in advance of the scheduled date of any other meeting. He shall have
custody of the corporate seal and shall affix the same to any documents
requiring such corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and
of all the transactions of the Company. He shall have general supervision
of the expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the Company, and
perform such other duties as may be assigned to him from time to time by
the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including
accounting, and shall render to the Board of Directors at appropriate times
a report relating to the general condition and internal operations of the
Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller
and such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board
of Directors shall prescribe, shall report to and be directly responsible
only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the
Auditor and such duties as may be prescribed by the officer in charge of
the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined
from time to time by the Board of Directors, who shall ex officio hold the
office Assistant Secretary of this Company and who may perform such duties
as may be prescribed by the officer in charge of the department or division
to whom they are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices,
subject to the direction of the Board of Directors, the Executive
Committee, Chairman of the Board of Directors or the President and the
officer in charge of the department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of
stock shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of
Directors and countersigned by the Secretary or Treasurer or an Assistant
Secretary, and the seal of the corporation shall be engraved thereon. Each
certificate shall recite that the stock represented thereby is
transferrable only upon the books of the Company by the holder thereof or
his attorney, upon surrender of the certificate properly endorsed. Any
certificate of stock surrendered to the Company shall be cancelled at the
time of transfer, and before a new certificate or certificates shall be
issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of
Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders
entitled to notice of, and to vote at, any meeting of stockholders and any
adjournment thereof, or entitled to receive payment of any dividend, or to
any allotment or rights, or to exercise any rights in respect of any
change, conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection
with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full
power and authority to enter into, make, sign, execute, acknowledge and/or
deliver and the Secretary or any Assistant Secretary shall have full power
and authority to attest and affix the corporate seal of the Company to any
and all deeds, conveyances, assignments, releases, contracts, agreements,
bonds, notes, mortgages and all other instruments incident to the business
of this Company or in acting as executor, administrator, guardian, trustee,
agent or in any other fiduciary or representative capacity by any and every
method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors
or the Executive Committee, and any and all such instruments shall have the
same force and validity as though expressly authorized by the Board of
Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable
honoraria or fees for attending meetings of the Board of Directors as the
Board of Directors may from time to time determine. Directors and associate
directors who serve as members of committees, other than salaried employees
of the Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall from time
to time determine and directors and associate directors may be employed by
the Company for such special services as the Board of Directors may from
time to time determine and shall be paid for such special services so
performed reasonable compensation as may be determined by the Board of
Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or
may hereafter be amended, any person who was or is made or is threatened to
be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "proceeding")
by reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or
of a partnership, joint venture, trust, enterprise or non-profit entity,
including service with respect to employee benefit plans, against all
liability and loss suffered and expenses reasonably incurred by such
person. The Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by a Director or
officer in his capacity as a Director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the Director or officer to repay all amounts advanced if it
should be ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of expenses, under this Article X is not paid in full within ninety days
after a written claim therefor has been received by the Corporation the
claimant may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have the
burden of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Charter or
Act of Incorporation, these By-Laws, agreement, vote of stockholders or
disinterested Directors or otherwise.
(E) Any repeal or modification of the
foregoing provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all
the members of the Board of Directors then in office.
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or
at such other date, time, or place as may be designated by resolution by
the Board of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the
President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10) days before said
meeting, at his last known address, a written or printed notice fixing the
time and place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined,
shall constitute a quorum at all meetings of stockholders for the
transaction of any business, but the holders of a small number of shares
may adjourn, from time to time, without further notice, until a quorum is
secured. At each annual or special meeting of stockholders, each
stockholder shall be entitled to one vote, either in person or by proxy,
for each share of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as determined
herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the
Company, provided, however, that this limitation shall not apply to any
person who was serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of
the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board of Directors or by the
President, and shall be called upon the written request of a majority of
the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director
of any special meeting of the Board of Directors, and of any change in the
time or place of any regular meeting, stating the time and place of such
meeting, which shall be mailed not less than two days before the time of
holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of
Directors, although less than a quorum, shall have the right to elect the
successor who shall hold office for the remainder of the full term of the
class of directors in which the vacancy occurred, and until such director's
successor shall have been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President
who may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may
appoint at any time such other committees and elect or appoint such other
officers as it may deem advisable. The Board of Directors may also elect at
such meeting one or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or divisions of the Company as it may
deem advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed
of not more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during the
pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members, or at the call of the
Chairman of the Executive Committee or at the call of the Chairman of the
Board of Directors. The majority of its members shall be necessary to
constitute a quorum for the transaction of business. Special meetings of
the Executive Committee may be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company,
and shall direct the disposal of the same, in accordance with such rules
and regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs
and business of the Company by its directors and officers as contemplated
by these By-Laws any two available members of the Executive Committee as
constituted immediately prior to such disaster shall constitute a quorum of
that Committee for the full conduct and management of the affairs and
business of the Company in accordance with the provisions of Article III of
these By-Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available for the
transaction of its business, such Executive Committee shall also be
empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at
such time, of a minimum of two members of such Executive Committee, any
three available directors shall constitute the Executive Committee for the
full conduct and management of the affairs and business of the Company in
accordance with the foregoing provisions of this Section. This By-Law shall
be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose,
and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim
Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its
affairs and business under all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of
not more than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of Directors
and who shall hold office during the pleasure of the Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust funds, in
all matters, however, being subject to the approval of the Board of
Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members or at the call of its
chairman. A majority of its members shall be necessary to constitute a
quorum for the transaction of business.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power
to appoint Committees and/or designate officers or employees of the Company
to whom supervision over the investment of trust funds may be delegated
when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of
five members who shall be selected by the Board of Directors from its own
members, none of whom shall be an officer of the Company, and shall hold
office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought
to its attention by the officer in charge of the Audit Division, review all
reports of examination of the Company made by any governmental agency or
such independent auditor employed for that purpose, and make such
recommendations to the Board of Directors with respect thereto or with
respect to any other matters pertaining to auditing the Company as it shall
deem desirable.
(C) The Audit Committee shall meet whenever
and wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall
constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be
composed of not more than five (5) members who shall be selected by the
Board of Directors from its own members who are not officers of the Company
and who shall hold office during the pleasure of the Board.
(B) The Compensation Committee shall in
general advise upon all matters of policy concerning the Company brought to
its attention by the management and from time to time review the management
of the Company, major organizational matters, including salaries and
employee benefits and specifically shall administer the Executive Incentive
Compensation Plan.
(C) Meetings of the Compensation Committee may
be called at any time by the Chairman of the Compensation Committee, the
Chairman of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director
may be elected by the Board of Directors as an associate director, to serve
during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all
matters brought to the Board, with the exception that he would have no
right to vote. An associate director will be eligible for appointment to
Committees of the Company, with the exception of the Executive Committee,
Audit Committee and Compensation Committee, which must be comprised solely
of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers
and shall perform such duties as the Board of Directors may from time to
time confer and direct. He shall also exercise such powers and perform such
duties as may from time to time be agreed upon between himself and the
President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of
the Board of Directors shall preside at all meetings of the Board of
Directors at which the Chairman of the Board shall not be present and shall
have such further authority and powers and shall perform such duties as the
Board of Directors or the Chairman of the Board may from time to time
confer and direct.
Section 3. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors. In the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and
shall at all times exercise general supervision over the interest, affairs
and operations of the Company and perform all duties incident to his
office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and
such other powers and duties as may from time to time be assigned to them
by the Board of Directors, the Executive Committee, the Chairman of the
Board or the President and by the officer in charge of the department or
division to which they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings
and to recording the same in the minute books of the Company. In addition
to the other notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and mailed
well in advance of the scheduled date of any other meeting. He shall have
custody of the corporate seal and shall affix the same to any documents
requiring such corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and
of all the transactions of the Company. He shall have general supervision
of the expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the Company, and
perform such other duties as may be assigned to him from time to time by
the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including
accounting, and shall render to the Board of Directors at appropriate times
a report relating to the general condition and internal operations of the
Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller
and such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board
of Directors shall prescribe, shall report to and be directly responsible
only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the
Auditor and such duties as may be prescribed by the officer in charge of
the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined
from time to time by the Board of Directors, who shall ex officio hold the
office Assistant Secretary of this Company and who may perform such duties
as may be prescribed by the officer in charge of the department or division
to whom they are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices,
subject to the direction of the Board of Directors, the Executive
Committee, Chairman of the Board of Directors or the President and the
officer in charge of the department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of
stock shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of
Directors and countersigned by the Secretary or Treasurer or an Assistant
Secretary, and the seal of the corporation shall be engraved thereon. Each
certificate shall recite that the stock represented thereby is
transferrable only upon the books of the Company by the holder thereof or
his attorney, upon surrender of the certificate properly endorsed. Any
certificate of stock surrendered to the Company shall be cancelled at the
time of transfer, and before a new certificate or certificates shall be
issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of
Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders
entitled to notice of, and to vote at, any meeting of stockholders and any
adjournment thereof, or entitled to receive payment of any dividend, or to
any allotment or rights, or to exercise any rights in respect of any
change, conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection
with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full
power and authority to enter into, make, sign, execute, acknowledge and/or
deliver and the Secretary or any Assistant Secretary shall have full power
and authority to attest and affix the corporate seal of the Company to any
and all deeds, conveyances, assignments, releases, contracts, agreements,
bonds, notes, mortgages and all other instruments incident to the business
of this Company or in acting as executor, administrator, guardian, trustee,
agent or in any other fiduciary or representative capacity by any and every
method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors
or the Executive Committee, and any and all such instruments shall have the
same force and validity as though expressly authorized by the Board of
Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable
honoraria or fees for attending meetings of the Board of Directors as the
Board of Directors may from time to time determine. Directors and associate
directors who serve as members of committees, other than salaried employees
of the Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall from time
to time determine and directors and associate directors may be employed by
the Company for such special services as the Board of Directors may from
time to time determine and shall be paid for such special services so
performed reasonable compensation as may be determined by the Board of
Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or
may hereafter be amended, any person who was or is made or is threatened to
be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "proceeding")
by reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or
of a partnership, joint venture, trust, enterprise or non-profit entity,
including service with respect to employee benefit plans, against all
liability and loss suffered and expenses reasonably incurred by such
person. The Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by a Director or
officer in his capacity as a Director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the Director or officer to repay all amounts advanced if it
should be ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of expenses, under this Article X is not paid in full within ninety days
after a written claim therefor has been received by the Corporation the
claimant may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have the
burden of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Charter or
Act of Incorporation, these By-Laws, agreement, vote of stockholders or
disinterested Directors or otherwise.
(E) Any repeal or modification of the
foregoing provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all
the members of the Board of Directors then in office.
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has
not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your
state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ----------------------------------------- --------------
Name of Bank City
in the State of DELAWARE, at the close of business on June 30, 1999.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins...................................207,947
Interest-bearing balances................................................................. 0
Held-to-maturity securities.................................................................... 37,680
Available-for-sale securities................................................................1,598,933
Federal funds sold and securities purchased under agreements to resell.........................180,366
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 4,237,557
LESS: Allowance for loan and lease losses. . . . . . 70,233
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve....................4,167,324
Assets held in trading accounts......................................................................0
Premises and fixed assets (including capitalized leases).......................................141,415
Other real estate owned......................................................................... 922
Investments in unconsolidated subsidiaries and associated companies..............................1,227
Customers' liability to this bank on acceptances outstanding.........................................0
Intangible assets............................................................................... 5,179
Other assets...................................................................................104,101
Total assets.................................................................................6,445,094
LIABILITIES
Deposits:
In domestic offices..........................................................................4,574,509
Noninterest-bearing . . . . . . . . 992,436
Interest-bearing. . . . . . . . . . 3,582,073
Federal funds purchased and Securities sold under agreements to repurchase.................... 344,719
Demand notes issued to the U.S. Treasury........................................................83,802
Trading liabilities (from Schedule RC-D).............................................................0
Other borrowed money:..........................................................................///////
With original maturity of one year or less............................................860,000
With original maturity of more than one year...........................................43,000
Bank's liability on acceptances executed and outstanding.............................................0
Subordinated notes and debentures....................................................................0
Other liabilities (from Schedule RC-G)....................................................... 80,279
Total liabilities............................................................................5,986,309
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................................................0
Common Stock.......................................................................................500
Surplus (exclude all surplus related to preferred stock)........................................62,118
Undivided profits and capital reserves.........................................................412,409
Net unrealized holding gains (losses) on available-for-sale securities........................(16,242)
Total equity capital...........................................................................458,785
Total liabilities, limited-life preferred stock, and equity capital..........................6,445,094
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CENDANT CORPORATION
CENDANT CAPITAL IV
(Exact name of obligor as specified in its charter)
Delaware 06-0918165
Delaware 22-3565321
(State of incorporation) (I.R.S. employer identification no.)
9 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive offices) (Zip Code)
Preferred Securities of Cendant Capital IV
(Title of the indenture securities)
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is not
an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by
Section 321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington
Trust Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 10th
day of September, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Joseph B. Feil By: /s/ Bruce L. Bisson
------------------------ -------------------------
Assistant Secretary Name: Bruce L. Bisson
Title: Vice President
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission
upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: September 10, 1999 By:/s/ Bruce L. Bisson
-------------------------------
Name: Bruce L. Bisson
Title: Vice President
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate
the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and
the name of which company was changed to "WILMINGTON TRUST Company" by an
amendment filed in the Office of the Secretary of State on March 18, A.D.
1903, and the Charter or Act of Incorporation of which company has been
from time to time amended and changed by merger agreements pursuant to the
corporation law for state banks and trust companies of the State of
Delaware, does hereby alter and amend its Charter or Act of Incorporation
so that the same as so altered and amended shall in its entirety read as
follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City.
In addition to such principal office, the said corporation
maintains and operates branch offices in the City of Newark, New
Castle County, Delaware, the Town of Newport, New Castle County,
Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle
County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware
Avenue, 2120 Market Street, and 3605 Market Street, all in the
City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from
time to time by the agency or agencies of the government of the
State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court
of law or equity and to make and use a common seal, and
alter the seal at pleasure, to hold, purchase, convey,
mortgage or otherwise deal in real and personal estate
and property, and to appoint such officers and agents as
the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws of
the United States or of this State, to discount bills,
notes or other evidences of debt, to receive deposits of
money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all
the powers, rights, privileges and franchises incident to
a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and to
prepare and give certificates of title for any lands or
premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and disposal
of property of all descriptions, and to prepare and
execute all papers which may be necessary or proper in
such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from executors,
administrators, guardians, public officers, courts,
receivers, assignees, trustees, and from all fiduciaries,
and from all other persons and individuals, and from all
corporations whether state, municipal, corporate or
private, and to rent boxes, safes, vaults and other
receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the
two parties, and in like manner may act as Treasurer of
any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of
any contract or agreement, and the fidelity of persons
holding places of responsibility or trust; to become
surety for any person, or persons, for the faithful
performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations,
or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and to
be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the State
of Delaware or elsewhere; and whenever this Corporation
is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon
it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other
securities, obligations, contracts and evidences of
indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or
of the Government of the United States, or of any state,
territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property,
any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys
of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to
time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the
property held or owned by the Corporation, and to sell
and pledge such bonds, as and when the Board of Directors
shall determine, and in the promotion of its said
corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate
or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to
the same extent as natural persons might or could do, and
in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association
or corporation, and to pay for the same in cash, stock of
this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner
the whole or any part of any business so acquired, and to
exercise all the powers necessary or convenient in and
about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts
of every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw,
make, accept, endorse, discount, execute and issue
promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any
of its operations and businesses, without restriction to
the same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and
in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said
paragraph) be nowise limited or restricted by reference
to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the
clauses of this paragraph shall be regarded as
independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in
one or more series as may from time to time be determined by the
Board of Directors each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative,
if made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board
of Directors of the Corporation is hereby expressly granted
authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of a particular series of Preferred Stock,
the voting powers and the designations, preferences and relative,
optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the
Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock
of such series to convert the same into or exchange the
same for, shares of any other class or classes or of any
series of the same or any other class or classes of stock
of the Corporation and the terms and conditions of such
conversion or exchange;
(4) Whether or not Preferred Stock of such series shall
be subject to redemption, and the redemption price or
prices and the time or times at which, and the terms and
conditions on which, Preferred Stock of such series may
be redeemed.
(5) The rights, if any, of the holders of Preferred Stock
of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or sale
of assets, dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as
a series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a
class, to elect one or more directors of the Corporation
if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or
under such circumstances and on such conditions as the
Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with
all the requirements, if any, with respect to the setting aside of
sums as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed
in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall
be entitled to receive such dividends as may be declared from time
to time by the Board of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the provisions
of section (b) of this Article FOURTH), to be distributed
to the holders of Preferred Stock in the event of
voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be
entitled to receive all of the remaining assets of the
Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held
by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b)
of this Article FOURTH, each holder of Common Stock shall
have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued
stock, additional authorized issue of shares of any class or
series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, whether such
holders or others, and upon such terms as may be deemed advisable
by the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences
and rights of each other series of Preferred Stock shall, in each
case, be as fixed from time to time by the Board of Directors in
the resolution or resolutions adopted pursuant to authority
granted in section (b) of this Article FOURTH and the consent, by
class or series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time outstanding
shall not be required for the issuance by the Board of Directors
of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock
adopted pursuant to section (b) of this Article FOURTH that the
consent of the holders of a majority (or such greater proportion
as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or
all other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of
Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased
or decreased from time to time by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to
vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than
five nor more than twenty-five as fixed from time to time by vote
of a majority of the whole Board, provided, however, that the
number of directors shall not be reduced so as to shorten the term
of any director at the time in office, and provided further, that
the number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of
one class expiring each year. At the annual meeting of
stockholders in 1982, directors of the first class shall be
elected to hold office for a term expiring at the next succeeding
annual meeting, directors of the second class shall be elected to
hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and any
newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a
quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold
office until the next election of the class for which such
director shall have been chosen and until his successor shall be
elected and qualified. No decrease in the number of directors
shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or the
By-Laws of the Corporation), any director or the entire Board of
Directors of the Corporation may be removed at any time without
cause, but only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a
meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not
made in accordance with the foregoing procedure, and if he should
so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may
be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action
is specifically denied.
SIXTH: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time
to time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon
corporations organized under the Act entitled "An Act Providing a
General Corporation Law", approved March 10, 1899, as from time to
time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their number to
constitute an Executive Committee, which Committee, to the extent
provided in said resolution, or in the By-Laws of the Company,
shall have and may exercise all of the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and shall have power to authorize the seal of the
Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of
the world.
THIRTEENTH: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of the
Corporation by a vote of the majority of the entire Board. The
stockholders may make, alter or repeal any By-Law whether or not
adopted by them, provided however, that any such additional
By-Laws, alterations or repeal may be adopted only by the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this
purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to
time designated by the Board, and the Directors may keep the books
of the Company outside of the State of Delaware at such places as
may be from time to time designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required
by law, and except as otherwise expressly provided in sections (b)
and (c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii)
any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of
related transactions) to or with any Interested
Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of
$1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate
of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or
that some lesser percentage may be specified, by law or in any agreement
with any national securities exchange or otherwise.
(2) The term "business combination" as used in
this Article FIFTEENTH shall mean any
transaction which is referred to in any one or
more of clauses (A) through (E) of paragraph 1
of the section (a).
(b) The provisions of section (a) of this Article
FIFTEENTH shall not be applicable to any particular
business combination and such business combination shall
require only such affirmative vote as is required by law
and any other provisions of the Charter or Act of
Incorporation or By-Laws if such business combination has
been approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual, firm, corporation or
other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation or
any Subsidiary) who or which as of the record date for the
determination of stockholders entitled to notice of and to vote on
such business combination, or immediately prior to the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially
owned by any Interested Stockholder, and such assignment
or succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned
person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares
of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed
owned through application of paragraph (3) above but shall not
include any other Voting Shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights, warrants or
options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
FIFTEENTH on the basis of information known to them, (1)
the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate
of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this
Charter or Act of Incorporation by the By-Laws), the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of the capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this
purpose as one class) shall be required to amend, alter or repeal
any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be
liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director, except to the extent
such exemption from liability or limitation thereof is not
permitted under the Delaware General Corporation Laws as the same
exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with
respect to any act or omission occurring prior to the
time of such repeal or modification."
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or
at such other date, time, or place as may be designated by resolution by
the Board of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the
President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10) days before said
meeting, at his last known address, a written or printed notice fixing the
time and place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined,
shall constitute a quorum at all meetings of stockholders for the
transaction of any business, but the holders of a small number of shares
may adjourn, from time to time, without further notice, until a quorum is
secured. At each annual or special meeting of stockholders, each
stockholder shall be entitled to one vote, either in person or by proxy,
for each share of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as determined
herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the
Company, provided, however, that this limitation shall not apply to any
person who was serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of
the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board of Directors or by the
President, and shall be called upon the written request of a majority of
the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director
of any special meeting of the Board of Directors, and of any change in the
time or place of any regular meeting, stating the time and place of such
meeting, which shall be mailed not less than two days before the time of
holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of
Directors, although less than a quorum, shall have the right to elect the
successor who shall hold office for the remainder of the full term of the
class of directors in which the vacancy occurred, and until such director's
successor shall have been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President
who may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may
appoint at any time such other committees and elect or appoint such other
officers as it may deem advisable. The Board of Directors may also elect at
such meeting one or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or divisions of the Company as it may
deem advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed
of not more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during the
pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members, or at the call of the
Chairman of the Executive Committee or at the call of the Chairman of the
Board of Directors. The majority of its members shall be necessary to
constitute a quorum for the transaction of business. Special meetings of
the Executive Committee may be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company,
and shall direct the disposal of the same, in accordance with such rules
and regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs
and business of the Company by its directors and officers as contemplated
by these By-Laws any two available members of the Executive Committee as
constituted immediately prior to such disaster shall constitute a quorum of
that Committee for the full conduct and management of the affairs and
business of the Company in accordance with the provisions of Article III of
these By-Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available for the
transaction of its business, such Executive Committee shall also be
empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at
such time, of a minimum of two members of such Executive Committee, any
three available directors shall constitute the Executive Committee for the
full conduct and management of the affairs and business of the Company in
accordance with the foregoing provisions of this Section. This By-Law shall
be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose,
and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim
Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its
affairs and business under all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of
not more than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of Directors
and who shall hold office during the pleasure of the Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust funds, in
all matters, however, being subject to the approval of the Board of
Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members or at the call of its
chairman. A majority of its members shall be necessary to constitute a
quorum for the transaction of business.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power
to appoint Committees and/or designate officers or employees of the Company
to whom supervision over the investment of trust funds may be delegated
when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of
five members who shall be selected by the Board of Directors from its own
members, none of whom shall be an officer of the Company, and shall hold
office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought
to its attention by the officer in charge of the Audit Division, review all
reports of examination of the Company made by any governmental agency or
such independent auditor employed for that purpose, and make such
recommendations to the Board of Directors with respect thereto or with
respect to any other matters pertaining to auditing the Company as it shall
deem desirable.
(C) The Audit Committee shall meet whenever
and wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall
constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be
composed of not more than five (5) members who shall be selected by the
Board of Directors from its own members who are not officers of the Company
and who shall hold office during the pleasure of the Board.
(B) The Compensation Committee shall in
general advise upon all matters of policy concerning the Company brought to
its attention by the management and from time to time review the management
of the Company, major organizational matters, including salaries and
employee benefits and specifically shall administer the Executive Incentive
Compensation Plan.
(C) Meetings of the Compensation Committee may
be called at any time by the Chairman of the Compensation Committee, the
Chairman of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director
may be elected by the Board of Directors as an associate director, to serve
during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all
matters brought to the Board, with the exception that he would have no
right to vote. An associate director will be eligible for appointment to
Committees of the Company, with the exception of the Executive Committee,
Audit Committee and Compensation Committee, which must be comprised solely
of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers
and shall perform such duties as the Board of Directors may from time to
time confer and direct. He shall also exercise such powers and perform such
duties as may from time to time be agreed upon between himself and the
President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of
the Board of Directors shall preside at all meetings of the Board of
Directors at which the Chairman of the Board shall not be present and shall
have such further authority and powers and shall perform such duties as the
Board of Directors or the Chairman of the Board may from time to time
confer and direct.
Section 3. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors. In the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and
shall at all times exercise general supervision over the interest, affairs
and operations of the Company and perform all duties incident to his
office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and
such other powers and duties as may from time to time be assigned to them
by the Board of Directors, the Executive Committee, the Chairman of the
Board or the President and by the officer in charge of the department or
division to which they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings
and to recording the same in the minute books of the Company. In addition
to the other notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and mailed
well in advance of the scheduled date of any other meeting. He shall have
custody of the corporate seal and shall affix the same to any documents
requiring such corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and
of all the transactions of the Company. He shall have general supervision
of the expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the Company, and
perform such other duties as may be assigned to him from time to time by
the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including
accounting, and shall render to the Board of Directors at appropriate times
a report relating to the general condition and internal operations of the
Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller
and such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board
of Directors shall prescribe, shall report to and be directly responsible
only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the
Auditor and such duties as may be prescribed by the officer in charge of
the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined
from time to time by the Board of Directors, who shall ex officio hold the
office Assistant Secretary of this Company and who may perform such duties
as may be prescribed by the officer in charge of the department or division
to whom they are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices,
subject to the direction of the Board of Directors, the Executive
Committee, Chairman of the Board of Directors or the President and the
officer in charge of the department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of
stock shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of
Directors and countersigned by the Secretary or Treasurer or an Assistant
Secretary, and the seal of the corporation shall be engraved thereon. Each
certificate shall recite that the stock represented thereby is
transferrable only upon the books of the Company by the holder thereof or
his attorney, upon surrender of the certificate properly endorsed. Any
certificate of stock surrendered to the Company shall be cancelled at the
time of transfer, and before a new certificate or certificates shall be
issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of
Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders
entitled to notice of, and to vote at, any meeting of stockholders and any
adjournment thereof, or entitled to receive payment of any dividend, or to
any allotment or rights, or to exercise any rights in respect of any
change, conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection
with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full
power and authority to enter into, make, sign, execute, acknowledge and/or
deliver and the Secretary or any Assistant Secretary shall have full power
and authority to attest and affix the corporate seal of the Company to any
and all deeds, conveyances, assignments, releases, contracts, agreements,
bonds, notes, mortgages and all other instruments incident to the business
of this Company or in acting as executor, administrator, guardian, trustee,
agent or in any other fiduciary or representative capacity by any and every
method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors
or the Executive Committee, and any and all such instruments shall have the
same force and validity as though expressly authorized by the Board of
Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable
honoraria or fees for attending meetings of the Board of Directors as the
Board of Directors may from time to time determine. Directors and associate
directors who serve as members of committees, other than salaried employees
of the Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall from time
to time determine and directors and associate directors may be employed by
the Company for such special services as the Board of Directors may from
time to time determine and shall be paid for such special services so
performed reasonable compensation as may be determined by the Board of
Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or
may hereafter be amended, any person who was or is made or is threatened to
be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "proceeding")
by reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or
of a partnership, joint venture, trust, enterprise or non-profit entity,
including service with respect to employee benefit plans, against all
liability and loss suffered and expenses reasonably incurred by such
person. The Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by a Director or
officer in his capacity as a Director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the Director or officer to repay all amounts advanced if it
should be ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of expenses, under this Article X is not paid in full within ninety days
after a written claim therefor has been received by the Corporation the
claimant may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have the
burden of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Charter or
Act of Incorporation, these By-Laws, agreement, vote of stockholders or
disinterested Directors or otherwise.
(E) Any repeal or modification of the
foregoing provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all
the members of the Board of Directors then in office.
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has
not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your
state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ----------------------------------------- --------------
Name of Bank City
in the State of DELAWARE, at the close of business on June 30, 1999.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins...................................207,947
Interest-bearing balances................................................................. 0
Held-to-maturity securities.................................................................... 37,680
Available-for-sale securities................................................................1,598,933
Federal funds sold and securities purchased under agreements to resell.........................180,366
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 4,237,557
LESS: Allowance for loan and lease losses. . . . . . 70,233
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve....................4,167,324
Assets held in trading accounts......................................................................0
Premises and fixed assets (including capitalized leases).......................................141,415
Other real estate owned......................................................................... 922
Investments in unconsolidated subsidiaries and associated companies..............................1,227
Customers' liability to this bank on acceptances outstanding.........................................0
Intangible assets............................................................................... 5,179
Other assets...................................................................................104,101
Total assets.................................................................................6,445,094
LIABILITIES
Deposits:
In domestic offices..........................................................................4,574,509
Noninterest-bearing . . . . . . . . 992,436
Interest-bearing. . . . . . . . . . 3,582,073
Federal funds purchased and Securities sold under agreements to repurchase.................... 344,719
Demand notes issued to the U.S. Treasury........................................................83,802
Trading liabilities (from Schedule RC-D).............................................................0
Other borrowed money:..........................................................................///////
With original maturity of one year or less............................................860,000
With original maturity of more than one year...........................................43,000
Bank's liability on acceptances executed and outstanding.............................................0
Subordinated notes and debentures....................................................................0
Other liabilities (from Schedule RC-G)....................................................... 80,279
Total liabilities............................................................................5,986,309
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................................................0
Common Stock.......................................................................................500
Surplus (exclude all surplus related to preferred stock)........................................62,118
Undivided profits and capital reserves.........................................................412,409
Net unrealized holding gains (losses) on available-for-sale securities........................(16,242)
Total equity capital...........................................................................458,785
Total liabilities, limited-life preferred stock, and equity capital..........................6,445,094
Registration No.
============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CENDANT CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 06-0918165
(State of incorporation) (I.R.S. employer identification no.)
9 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive offices) (Zip Code)
Guarantees and backup undertakings of Cendant Corporation
in connection with Preferred Securities of Cendant Capital V
by Cendant Corporation
(Title of the indenture securities)
============================================================================
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is not
an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, Wilmington Trust Company, a corporation organized
and existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 10th
day of September, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/Joseph B. Feil By: /s/ Bruce L. Bisson
------------------------- --------------------------------
Assistant Secretary Name: Bruce L. Bisson
Title: Vice President
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission
upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: September 10, 1999 By: __________________________________
Name:
Title: Vice President
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate
the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and
the name of which company was changed to "WILMINGTON TRUST Company" by an
amendment filed in the Office of the Secretary of State on March 18, A.D.
1903, and the Charter or Act of Incorporation of which company has been
from time to time amended and changed by merger agreements pursuant to the
corporation law for state banks and trust companies of the State of
Delaware, does hereby alter and amend its Charter or Act of Incorporation
so that the same as so altered and amended shall in its entirety read as
follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City.
In addition to such principal office, the said corporation
maintains and operates branch offices in the City of Newark, New
Castle County, Delaware, the Town of Newport, New Castle County,
Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle
County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware
Avenue, 2120 Market Street, and 3605 Market Street, all in the
City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from
time to time by the agency or agencies of the government of the
State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court
of law or equity and to make and use a common seal, and
alter the seal at pleasure, to hold, purchase, convey,
mortgage or otherwise deal in real and personal estate
and property, and to appoint such officers and agents as
the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws of
the United States or of this State, to discount bills,
notes or other evidences of debt, to receive deposits of
money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all
the powers, rights, privileges and franchises incident to
a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and to
prepare and give certificates of title for any lands or
premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and disposal
of property of all descriptions, and to prepare and
execute all papers which may be necessary or proper in
such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from executors,
administrators, guardians, public officers, courts,
receivers, assignees, trustees, and from all fiduciaries,
and from all other persons and individuals, and from all
corporations whether state, municipal, corporate or
private, and to rent boxes, safes, vaults and other
receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the
two parties, and in like manner may act as Treasurer of
any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of
any contract or agreement, and the fidelity of persons
holding places of responsibility or trust; to become
surety for any person, or persons, for the faithful
performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations,
or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and to
be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the State
of Delaware or elsewhere; and whenever this Corporation
is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon
it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other
securities, obligations, contracts and evidences of
indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or
of the Government of the United States, or of any state,
territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property,
any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys
of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to
time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the
property held or owned by the Corporation, and to sell
and pledge such bonds, as and when the Board of Directors
shall determine, and in the promotion of its said
corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate
or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to
the same extent as natural persons might or could do, and
in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association
or corporation, and to pay for the same in cash, stock of
this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner
the whole or any part of any business so acquired, and to
exercise all the powers necessary or convenient in and
about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts
of every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw,
make, accept, endorse, discount, execute and issue
promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any
of its operations and businesses, without restriction to
the same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and
in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said
paragraph) be nowise limited or restricted by reference
to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the
clauses of this paragraph shall be regarded as
independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in
one or more series as may from time to time be determined by the
Board of Directors each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative,
if made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board
of Directors of the Corporation is hereby expressly granted
authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of a particular series of Preferred Stock,
the voting powers and the designations, preferences and relative,
optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the
Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock
of such series to convert the same into or exchange the
same for, shares of any other class or classes or of any
series of the same or any other class or classes of stock
of the Corporation and the terms and conditions of such
conversion or exchange;
(4) Whether or not Preferred Stock of such series shall
be subject to redemption, and the redemption price or
prices and the time or times at which, and the terms and
conditions on which, Preferred Stock of such series may
be redeemed.
(5) The rights, if any, of the holders of Preferred Stock
of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or sale
of assets, dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as
a series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a
class, to elect one or more directors of the Corporation
if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or
under such circumstances and on such conditions as the
Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with
all the requirements, if any, with respect to the setting aside of
sums as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed
in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall
be entitled to receive such dividends as may be declared from time
to time by the Board of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the provisions
of section (b) of this Article FOURTH), to be distributed
to the holders of Preferred Stock in the event of
voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be
entitled to receive all of the remaining assets of the
Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held
by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b)
of this Article FOURTH, each holder of Common Stock shall
have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued
stock, additional authorized issue of shares of any class or
series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, whether such
holders or others, and upon such terms as may be deemed advisable
by the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences
and rights of each other series of Preferred Stock shall, in each
case, be as fixed from time to time by the Board of Directors in
the resolution or resolutions adopted pursuant to authority
granted in section (b) of this Article FOURTH and the consent, by
class or series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time outstanding
shall not be required for the issuance by the Board of Directors
of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock
adopted pursuant to section (b) of this Article FOURTH that the
consent of the holders of a majority (or such greater proportion
as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or
all other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of
Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased
or decreased from time to time by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to
vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than
five nor more than twenty-five as fixed from time to time by vote
of a majority of the whole Board, provided, however, that the
number of directors shall not be reduced so as to shorten the term
of any director at the time in office, and provided further, that
the number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of
one class expiring each year. At the annual meeting of
stockholders in 1982, directors of the first class shall be
elected to hold office for a term expiring at the next succeeding
annual meeting, directors of the second class shall be elected to
hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and any
newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a
quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold
office until the next election of the class for which such
director shall have been chosen and until his successor shall be
elected and qualified. No decrease in the number of directors
shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or the
By-Laws of the Corporation), any director or the entire Board of
Directors of the Corporation may be removed at any time without
cause, but only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a
meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not
made in accordance with the foregoing procedure, and if he should
so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may
be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action
is specifically denied.
SIXTH: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time
to time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon
corporations organized under the Act entitled "An Act Providing a
General Corporation Law", approved March 10, 1899, as from time to
time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their number to
constitute an Executive Committee, which Committee, to the extent
provided in said resolution, or in the By-Laws of the Company,
shall have and may exercise all of the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and shall have power to authorize the seal of the
Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of
the world.
THIRTEENTH: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of the
Corporation by a vote of the majority of the entire Board. The
stockholders may make, alter or repeal any By-Law whether or not
adopted by them, provided however, that any such additional
By-Laws, alterations or repeal may be adopted only by the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this
purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to
time designated by the Board, and the Directors may keep the books
of the Company outside of the State of Delaware at such places as
may be from time to time designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required
by law, and except as otherwise expressly provided in sections (b)
and (c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii)
any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of
related transactions) to or with any Interested
Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of
$1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate
of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or
that some lesser percentage may be specified, by law or in any agreement
with any national securities exchange or otherwise.
(2) The term "business combination" as used in
this Article FIFTEENTH shall mean any
transaction which is referred to in any one or
more of clauses (A) through (E) of paragraph 1
of the section (a).
(b) The provisions of section (a) of this Article
FIFTEENTH shall not be applicable to any particular
business combination and such business combination shall
require only such affirmative vote as is required by law
and any other provisions of the Charter or Act of
Incorporation or By-Laws if such business combination has
been approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual, firm, corporation or
other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation or
any Subsidiary) who or which as of the record date for the
determination of stockholders entitled to notice of and to vote on
such business combination, or immediately prior to the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially
owned by any Interested Stockholder, and such assignment
or succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned
person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares
of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed
owned through application of paragraph (3) above but shall not
include any other Voting Shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights, warrants or
options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
FIFTEENTH on the basis of information known to them, (1)
the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate
of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this
Charter or Act of Incorporation by the By-Laws), the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of the capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this
purpose as one class) shall be required to amend, alter or repeal
any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be
liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director, except to the extent
such exemption from liability or limitation thereof is not
permitted under the Delaware General Corporation Laws as the same
exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with
respect to any act or omission occurring prior to the
time of such repeal or modification."
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or
at such other date, time, or place as may be designated by resolution by
the Board of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the
President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10) days before said
meeting, at his last known address, a written or printed notice fixing the
time and place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined,
shall constitute a quorum at all meetings of stockholders for the
transaction of any business, but the holders of a small number of shares
may adjourn, from time to time, without further notice, until a quorum is
secured. At each annual or special meeting of stockholders, each
stockholder shall be entitled to one vote, either in person or by proxy,
for each share of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as determined
herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the
Company, provided, however, that this limitation shall not apply to any
person who was serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of
the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board of Directors or by the
President, and shall be called upon the written request of a majority of
the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director
of any special meeting of the Board of Directors, and of any change in the
time or place of any regular meeting, stating the time and place of such
meeting, which shall be mailed not less than two days before the time of
holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of
Directors, although less than a quorum, shall have the right to elect the
successor who shall hold office for the remainder of the full term of the
class of directors in which the vacancy occurred, and until such director's
successor shall have been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President
who may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may
appoint at any time such other committees and elect or appoint such other
officers as it may deem advisable. The Board of Directors may also elect at
such meeting one or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or divisions of the Company as it may
deem advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed
of not more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during the
pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members, or at the call of the
Chairman of the Executive Committee or at the call of the Chairman of the
Board of Directors. The majority of its members shall be necessary to
constitute a quorum for the transaction of business. Special meetings of
the Executive Committee may be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company,
and shall direct the disposal of the same, in accordance with such rules
and regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs
and business of the Company by its directors and officers as contemplated
by these By-Laws any two available members of the Executive Committee as
constituted immediately prior to such disaster shall constitute a quorum of
that Committee for the full conduct and management of the affairs and
business of the Company in accordance with the provisions of Article III of
these By-Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available for the
transaction of its business, such Executive Committee shall also be
empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at
such time, of a minimum of two members of such Executive Committee, any
three available directors shall constitute the Executive Committee for the
full conduct and management of the affairs and business of the Company in
accordance with the foregoing provisions of this Section. This By-Law shall
be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose,
and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim
Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its
affairs and business under all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of
not more than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of Directors
and who shall hold office during the pleasure of the Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust funds, in
all matters, however, being subject to the approval of the Board of
Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members or at the call of its
chairman. A majority of its members shall be necessary to constitute a
quorum for the transaction of business.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power
to appoint Committees and/or designate officers or employees of the Company
to whom supervision over the investment of trust funds may be delegated
when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of
five members who shall be selected by the Board of Directors from its own
members, none of whom shall be an officer of the Company, and shall hold
office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought
to its attention by the officer in charge of the Audit Division, review all
reports of examination of the Company made by any governmental agency or
such independent auditor employed for that purpose, and make such
recommendations to the Board of Directors with respect thereto or with
respect to any other matters pertaining to auditing the Company as it shall
deem desirable.
(C) The Audit Committee shall meet whenever
and wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall
constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be
composed of not more than five (5) members who shall be selected by the
Board of Directors from its own members who are not officers of the Company
and who shall hold office during the pleasure of the Board.
(B) The Compensation Committee shall in
general advise upon all matters of policy concerning the Company brought to
its attention by the management and from time to time review the management
of the Company, major organizational matters, including salaries and
employee benefits and specifically shall administer the Executive Incentive
Compensation Plan.
(C) Meetings of the Compensation Committee may
be called at any time by the Chairman of the Compensation Committee, the
Chairman of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director
may be elected by the Board of Directors as an associate director, to serve
during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all
matters brought to the Board, with the exception that he would have no
right to vote. An associate director will be eligible for appointment to
Committees of the Company, with the exception of the Executive Committee,
Audit Committee and Compensation Committee, which must be comprised solely
of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers
and shall perform such duties as the Board of Directors may from time to
time confer and direct. He shall also exercise such powers and perform such
duties as may from time to time be agreed upon between himself and the
President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of
the Board of Directors shall preside at all meetings of the Board of
Directors at which the Chairman of the Board shall not be present and shall
have such further authority and powers and shall perform such duties as the
Board of Directors or the Chairman of the Board may from time to time
confer and direct.
Section 3. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors. In the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and
shall at all times exercise general supervision over the interest, affairs
and operations of the Company and perform all duties incident to his
office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and
such other powers and duties as may from time to time be assigned to them
by the Board of Directors, the Executive Committee, the Chairman of the
Board or the President and by the officer in charge of the department or
division to which they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings
and to recording the same in the minute books of the Company. In addition
to the other notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and mailed
well in advance of the scheduled date of any other meeting. He shall have
custody of the corporate seal and shall affix the same to any documents
requiring such corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and
of all the transactions of the Company. He shall have general supervision
of the expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the Company, and
perform such other duties as may be assigned to him from time to time by
the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including
accounting, and shall render to the Board of Directors at appropriate times
a report relating to the general condition and internal operations of the
Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller
and such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board
of Directors shall prescribe, shall report to and be directly responsible
only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the
Auditor and such duties as may be prescribed by the officer in charge of
the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined
from time to time by the Board of Directors, who shall ex officio hold the
office Assistant Secretary of this Company and who may perform such duties
as may be prescribed by the officer in charge of the department or division
to whom they are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices,
subject to the direction of the Board of Directors, the Executive
Committee, Chairman of the Board of Directors or the President and the
officer in charge of the department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of
stock shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of
Directors and countersigned by the Secretary or Treasurer or an Assistant
Secretary, and the seal of the corporation shall be engraved thereon. Each
certificate shall recite that the stock represented thereby is
transferrable only upon the books of the Company by the holder thereof or
his attorney, upon surrender of the certificate properly endorsed. Any
certificate of stock surrendered to the Company shall be cancelled at the
time of transfer, and before a new certificate or certificates shall be
issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of
Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders
entitled to notice of, and to vote at, any meeting of stockholders and any
adjournment thereof, or entitled to receive payment of any dividend, or to
any allotment or rights, or to exercise any rights in respect of any
change, conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection
with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full
power and authority to enter into, make, sign, execute, acknowledge and/or
deliver and the Secretary or any Assistant Secretary shall have full power
and authority to attest and affix the corporate seal of the Company to any
and all deeds, conveyances, assignments, releases, contracts, agreements,
bonds, notes, mortgages and all other instruments incident to the business
of this Company or in acting as executor, administrator, guardian, trustee,
agent or in any other fiduciary or representative capacity by any and every
method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors
or the Executive Committee, and any and all such instruments shall have the
same force and validity as though expressly authorized by the Board of
Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable
honoraria or fees for attending meetings of the Board of Directors as the
Board of Directors may from time to time determine. Directors and associate
directors who serve as members of committees, other than salaried employees
of the Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall from time
to time determine and directors and associate directors may be employed by
the Company for such special services as the Board of Directors may from
time to time determine and shall be paid for such special services so
performed reasonable compensation as may be determined by the Board of
Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or
may hereafter be amended, any person who was or is made or is threatened to
be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "proceeding")
by reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or
of a partnership, joint venture, trust, enterprise or non-profit entity,
including service with respect to employee benefit plans, against all
liability and loss suffered and expenses reasonably incurred by such
person. The Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by a Director or
officer in his capacity as a Director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the Director or officer to repay all amounts advanced if it
should be ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of expenses, under this Article X is not paid in full within ninety days
after a written claim therefor has been received by the Corporation the
claimant may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have the
burden of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Charter or
Act of Incorporation, these By-Laws, agreement, vote of stockholders or
disinterested Directors or otherwise.
(E) Any repeal or modification of the
foregoing provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all
the members of the Board of Directors then in office.
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has
not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your
state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ----------------------------------------- --------------
Name of Bank City
in the State of DELAWARE, at the close of business on June 30, 1999.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins...................................207,947
Interest-bearing balances................................................................. 0
Held-to-maturity securities.................................................................... 37,680
Available-for-sale securities................................................................1,598,933
Federal funds sold and securities purchased under agreements to resell.........................180,366
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 4,237,557
LESS: Allowance for loan and lease losses. . . . . . 70,233
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve....................4,167,324
Assets held in trading accounts......................................................................0
Premises and fixed assets (including capitalized leases).......................................141,415
Other real estate owned......................................................................... 922
Investments in unconsolidated subsidiaries and associated companies..............................1,227
Customers' liability to this bank on acceptances outstanding.........................................0
Intangible assets............................................................................... 5,179
Other assets...................................................................................104,101
Total assets.................................................................................6,445,094
LIABILITIES
Deposits:
In domestic offices..........................................................................4,574,509
Noninterest-bearing . . . . . . . . 992,436
Interest-bearing. . . . . . . . . . 3,582,073
Federal funds purchased and Securities sold under agreements to repurchase.................... 344,719
Demand notes issued to the U.S. Treasury........................................................83,802
Trading liabilities (from Schedule RC-D).............................................................0
Other borrowed money:..........................................................................///////
With original maturity of one year or less............................................860,000
With original maturity of more than one year...........................................43,000
Bank's liability on acceptances executed and outstanding.............................................0
Subordinated notes and debentures....................................................................0
Other liabilities (from Schedule RC-G)....................................................... 80,279
Total liabilities............................................................................5,986,309
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................................................0
Common Stock.......................................................................................500
Surplus (exclude all surplus related to preferred stock)........................................62,118
Undivided profits and capital reserves.........................................................412,409
Net unrealized holding gains (losses) on available-for-sale securities........................(16,242)
Total equity capital...........................................................................458,785
Total liabilities, limited-life preferred stock, and equity capital..........................6,445,094
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CENDANT CORPORATION
CENDANT CAPITAL V
(Exact name of obligor as specified in its charter)
Delaware 06-0918165
Delaware 22-3565321
(State of incorporation) (I.R.S. employer identification no.)
9 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive offices) (Zip Code)
Preferred Securities of Cendant Capital V
(Title of the indenture securities)
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is not
an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by
Section 321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington
Trust Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 10th
day of September, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Joseph B. Feil By: /s/ Bruce L. Bisson
------------------------- -------------------------------
Assistant Secretary Name: Bruce L. Bisson
Title: Vice President
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission
upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: September 10, 1999 By: _______________________________
Name:
Title: Vice President
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate
the Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and
the name of which company was changed to "WILMINGTON TRUST Company" by an
amendment filed in the Office of the Secretary of State on March 18, A.D.
1903, and the Charter or Act of Incorporation of which company has been
from time to time amended and changed by merger agreements pursuant to the
corporation law for state banks and trust companies of the State of
Delaware, does hereby alter and amend its Charter or Act of Incorporation
so that the same as so altered and amended shall in its entirety read as
follows:
FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.
SECOND: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is WILMINGTON
TRUST COMPANY whose address is Rodney Square North, in said City.
In addition to such principal office, the said corporation
maintains and operates branch offices in the City of Newark, New
Castle County, Delaware, the Town of Newport, New Castle County,
Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle
County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware
Avenue, 2120 Market Street, and 3605 Market Street, all in the
City of Wilmington, New Castle County, Delaware, and such other
branch offices or places of business as may be authorized from
time to time by the agency or agencies of the government of the
State of Delaware empowered to confer such authority.
THIRD: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court
of law or equity and to make and use a common seal, and
alter the seal at pleasure, to hold, purchase, convey,
mortgage or otherwise deal in real and personal estate
and property, and to appoint such officers and agents as
the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws of
the United States or of this State, to discount bills,
notes or other evidences of debt, to receive deposits of
money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all
the powers, rights, privileges and franchises incident to
a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and to
prepare and give certificates of title for any lands or
premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and disposal
of property of all descriptions, and to prepare and
execute all papers which may be necessary or proper in
such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from executors,
administrators, guardians, public officers, courts,
receivers, assignees, trustees, and from all fiduciaries,
and from all other persons and individuals, and from all
corporations whether state, municipal, corporate or
private, and to rent boxes, safes, vaults and other
receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the
two parties, and in like manner may act as Treasurer of
any corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of
any contract or agreement, and the fidelity of persons
holding places of responsibility or trust; to become
surety for any person, or persons, for the faithful
performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations,
or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and to
be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the State
of Delaware or elsewhere; and whenever this Corporation
is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon
it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other
securities, obligations, contracts and evidences of
indebtedness, of any private, public or municipal
corporation within and without the State of Delaware, or
of the Government of the United States, or of any state,
territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures, notes,
shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property,
any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys
of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to
time to vary or realize such investments; to issue bonds
and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the
property held or owned by the Corporation, and to sell
and pledge such bonds, as and when the Board of Directors
shall determine, and in the promotion of its said
corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate
or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to
the same extent as natural persons might or could do, and
in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association
or corporation, and to pay for the same in cash, stock of
this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner
the whole or any part of any business so acquired, and to
exercise all the powers necessary or convenient in and
about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts
of every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw,
make, accept, endorse, discount, execute and issue
promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any
of its operations and businesses, without restriction to
the same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and
in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said
paragraph) be nowise limited or restricted by reference
to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the
objects, purposes and powers specified in each of the
clauses of this paragraph shall be regarded as
independent objects, purposes and powers.
FOURTH: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in
one or more series as may from time to time be determined by the
Board of Directors each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall
be alike in every particular, except that there may be different
dates from which dividends, if any, thereon shall be cumulative,
if made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each
such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the provisions of
subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board
of Directors of the Corporation is hereby expressly granted
authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of a particular series of Preferred Stock,
the voting powers and the designations, preferences and relative,
optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the
Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock
of such series to convert the same into or exchange the
same for, shares of any other class or classes or of any
series of the same or any other class or classes of stock
of the Corporation and the terms and conditions of such
conversion or exchange;
(4) Whether or not Preferred Stock of such series shall
be subject to redemption, and the redemption price or
prices and the time or times at which, and the terms and
conditions on which, Preferred Stock of such series may
be redeemed.
(5) The rights, if any, of the holders of Preferred Stock
of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or sale
of assets, dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as
a series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a
class, to elect one or more directors of the Corporation
if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or
under such circumstances and on such conditions as the
Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article FOURTH), if any, shall
have been met and after the Corporation shall have complied with
all the requirements, if any, with respect to the setting aside of
sums as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
FOURTH), and subject further to any conditions which may be fixed
in accordance with the provisions of section (b) of this Article
FOURTH, then and not otherwise the holders of Common Stock shall
be entitled to receive such dividends as may be declared from time
to time by the Board of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the provisions
of section (b) of this Article FOURTH), to be distributed
to the holders of Preferred Stock in the event of
voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be
entitled to receive all of the remaining assets of the
Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held
by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b)
of this Article FOURTH, each holder of Common Stock shall
have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued
stock, additional authorized issue of shares of any class or
series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, whether such
holders or others, and upon such terms as may be deemed advisable
by the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences
and rights of each other series of Preferred Stock shall, in each
case, be as fixed from time to time by the Board of Directors in
the resolution or resolutions adopted pursuant to authority
granted in section (b) of this Article FOURTH and the consent, by
class or series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time outstanding
shall not be required for the issuance by the Board of Directors
of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock
adopted pursuant to section (b) of this Article FOURTH that the
consent of the holders of a majority (or such greater proportion
as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or
all other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of
Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased
or decreased from time to time by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to
vote thereon.
FIFTH: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than
five nor more than twenty-five as fixed from time to time by vote
of a majority of the whole Board, provided, however, that the
number of directors shall not be reduced so as to shorten the term
of any director at the time in office, and provided further, that
the number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole
Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of
one class expiring each year. At the annual meeting of
stockholders in 1982, directors of the first class shall be
elected to hold office for a term expiring at the next succeeding
annual meeting, directors of the second class shall be elected to
hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and any
newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a
quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold
office until the next election of the class for which such
director shall have been chosen and until his successor shall be
elected and qualified. No decrease in the number of directors
shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or the
By-Laws of the Corporation), any director or the entire Board of
Directors of the Corporation may be removed at any time without
cause, but only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a
meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations
which are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not
made in accordance with the foregoing procedure, and if he should
so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may
be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action
is specifically denied.
SIXTH: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time
to time find necessary or proper.
SEVENTH: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon
corporations organized under the Act entitled "An Act Providing a
General Corporation Law", approved March 10, 1899, as from time to
time amended.
EIGHTH: - This Act shall be deemed and taken to be a private Act.
NINTH: - This Corporation is to have perpetual existence.
TENTH: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their number to
constitute an Executive Committee, which Committee, to the extent
provided in said resolution, or in the By-Laws of the Company,
shall have and may exercise all of the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and shall have power to authorize the seal of the
Corporation to be affixed to all papers which may require it.
ELEVENTH: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
TWELFTH: - The Corporation may transact business in any part of
the world.
THIRTEENTH: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of the
Corporation by a vote of the majority of the entire Board. The
stockholders may make, alter or repeal any By-Law whether or not
adopted by them, provided however, that any such additional
By-Laws, alterations or repeal may be adopted only by the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this
purpose as one class).
FOURTEENTH: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to
time designated by the Board, and the Directors may keep the books
of the Company outside of the State of Delaware at such places as
may be from time to time designated by them.
FIFTEENTH: - (a) (1) In addition to any affirmative vote required
by law, and except as otherwise expressly provided in sections (b)
and (c) of this Article FIFTEENTH:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii)
any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of
related transactions) to or with any Interested
Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of
$1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate
of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or
that some lesser percentage may be specified, by law or in any agreement
with any national securities exchange or otherwise.
(2) The term "business combination" as used in
this Article FIFTEENTH shall mean any
transaction which is referred to in any one or
more of clauses (A) through (E) of paragraph 1
of the section (a).
(b) The provisions of section (a) of this Article
FIFTEENTH shall not be applicable to any particular
business combination and such business combination shall
require only such affirmative vote as is required by law
and any other provisions of the Charter or Act of
Incorporation or By-Laws if such business combination has
been approved by a majority of the whole Board.
(c) For the purposes of this Article FIFTEENTH:
(1) A "person" shall mean any individual, firm, corporation or
other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation or
any Subsidiary) who or which as of the record date for the
determination of stockholders entitled to notice of and to vote on
such business combination, or immediately prior to the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially
owned by any Interested Stockholder, and such assignment
or succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act
of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly,
by any other person with which such first mentioned
person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares
of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed
owned through application of paragraph (3) above but shall not
include any other Voting Shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights, warrants or
options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
FIFTEENTH on the basis of information known to them, (1)
the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate
of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
(e) Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SIXTEENTH: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this
Charter or Act of Incorporation by the By-Laws), the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of the capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this
purpose as one class) shall be required to amend, alter or repeal
any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
SIXTEENTH of this Charter or Act of Incorporation.
SEVENTEENTH: (a) a Director of this Corporation shall not be
liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director, except to the extent
such exemption from liability or limitation thereof is not
permitted under the Delaware General Corporation Laws as the same
exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with
respect to any act or omission occurring prior to the
time of such repeal or modification."
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or
at such other date, time, or place as may be designated by resolution by
the Board of Directors.
Section 2. Special meetings of all stockholders may be called at
any time by the Board of Directors, the Chairman of the Board or the
President.
Section 3. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10) days before said
meeting, at his last known address, a written or printed notice fixing the
time and place of such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined,
shall constitute a quorum at all meetings of stockholders for the
transaction of any business, but the holders of a small number of shares
may adjourn, from time to time, without further notice, until a quorum is
secured. At each annual or special meeting of stockholders, each
stockholder shall be entitled to one vote, either in person or by proxy,
for each share of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as determined
herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the
Company, provided, however, that this limitation shall not apply to any
person who was serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of
the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board of Directors or by the
President, and shall be called upon the written request of a majority of
the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director
of any special meeting of the Board of Directors, and of any change in the
time or place of any regular meeting, stating the time and place of such
meeting, which shall be mailed not less than two days before the time of
holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of
Directors, although less than a quorum, shall have the right to elect the
successor who shall hold office for the remainder of the full term of the
class of directors in which the vacancy occurred, and until such director's
successor shall have been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect
from its own members a Chairman of the Board of Directors and a President
who may be the same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person, may
appoint at any time such other committees and elect or appoint such other
officers as it may deem advisable. The Board of Directors may also elect at
such meeting one or more Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be
in charge of such of the departments or divisions of the Company as it may
deem advisable.
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed
of not more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during the
pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members, or at the call of the
Chairman of the Executive Committee or at the call of the Chairman of the
Board of Directors. The majority of its members shall be necessary to
constitute a quorum for the transaction of business. Special meetings of
the Executive Committee may be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company,
and shall direct the disposal of the same, in accordance with such rules
and regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs
and business of the Company by its directors and officers as contemplated
by these By-Laws any two available members of the Executive Committee as
constituted immediately prior to such disaster shall constitute a quorum of
that Committee for the full conduct and management of the affairs and
business of the Company in accordance with the provisions of Article III of
these By-Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available for the
transaction of its business, such Executive Committee shall also be
empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at
such time, of a minimum of two members of such Executive Committee, any
three available directors shall constitute the Executive Committee for the
full conduct and management of the affairs and business of the Company in
accordance with the foregoing provisions of this Section. This By-Law shall
be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose,
and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any interim
Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its
affairs and business under all of the other provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of
not more than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of Directors
and who shall hold office during the pleasure of the Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust funds, in
all matters, however, being subject to the approval of the Board of
Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such
times to be determined by a majority of its members or at the call of its
chairman. A majority of its members shall be necessary to constitute a
quorum for the transaction of business.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power
to appoint Committees and/or designate officers or employees of the Company
to whom supervision over the investment of trust funds may be delegated
when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of
five members who shall be selected by the Board of Directors from its own
members, none of whom shall be an officer of the Company, and shall hold
office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought
to its attention by the officer in charge of the Audit Division, review all
reports of examination of the Company made by any governmental agency or
such independent auditor employed for that purpose, and make such
recommendations to the Board of Directors with respect thereto or with
respect to any other matters pertaining to auditing the Company as it shall
deem desirable.
(C) The Audit Committee shall meet whenever
and wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall
constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be
composed of not more than five (5) members who shall be selected by the
Board of Directors from its own members who are not officers of the Company
and who shall hold office during the pleasure of the Board.
(B) The Compensation Committee shall in
general advise upon all matters of policy concerning the Company brought to
its attention by the management and from time to time review the management
of the Company, major organizational matters, including salaries and
employee benefits and specifically shall administer the Executive Incentive
Compensation Plan.
(C) Meetings of the Compensation Committee may
be called at any time by the Chairman of the Compensation Committee, the
Chairman of the Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director
may be elected by the Board of Directors as an associate director, to serve
during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all
matters brought to the Board, with the exception that he would have no
right to vote. An associate director will be eligible for appointment to
Committees of the Company, with the exception of the Executive Committee,
Audit Committee and Compensation Committee, which must be comprised solely
of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at
the meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers
and shall perform such duties as the Board of Directors may from time to
time confer and direct. He shall also exercise such powers and perform such
duties as may from time to time be agreed upon between himself and the
President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of
the Board of Directors shall preside at all meetings of the Board of
Directors at which the Chairman of the Board shall not be present and shall
have such further authority and powers and shall perform such duties as the
Board of Directors or the Chairman of the Board may from time to time
confer and direct.
Section 3. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute or assigned to him by the Board of Directors. In the absence of the
Chairman of the Board the President shall have the powers and duties of the
Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and
shall at all times exercise general supervision over the interest, affairs
and operations of the Company and perform all duties incident to his
office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and
such other powers and duties as may from time to time be assigned to them
by the Board of Directors, the Executive Committee, the Chairman of the
Board or the President and by the officer in charge of the department or
division to which they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings
and to recording the same in the minute books of the Company. In addition
to the other notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and mailed
well in advance of the scheduled date of any other meeting. He shall have
custody of the corporate seal and shall affix the same to any documents
requiring such corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and
responsible for all monies, funds and valuables of the Company and for the
keeping of proper records of the evidence of property or indebtedness and
of all the transactions of the Company. He shall have general supervision
of the expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the Company, and
perform such other duties as may be assigned to him from time to time by
the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including
accounting, and shall render to the Board of Directors at appropriate times
a report relating to the general condition and internal operations of the
Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller
and such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be
in charge of the Audit Division of the Company with such title as the Board
of Directors shall prescribe, shall report to and be directly responsible
only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the
Auditor and such duties as may be prescribed by the officer in charge of
the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined
from time to time by the Board of Directors, who shall ex officio hold the
office Assistant Secretary of this Company and who may perform such duties
as may be prescribed by the officer in charge of the department or division
to whom they are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices,
subject to the direction of the Board of Directors, the Executive
Committee, Chairman of the Board of Directors or the President and the
officer in charge of the department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of
stock shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of
Directors and countersigned by the Secretary or Treasurer or an Assistant
Secretary, and the seal of the corporation shall be engraved thereon. Each
certificate shall recite that the stock represented thereby is
transferrable only upon the books of the Company by the holder thereof or
his attorney, upon surrender of the certificate properly endorsed. Any
certificate of stock surrendered to the Company shall be cancelled at the
time of transfer, and before a new certificate or certificates shall be
issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of
Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders
entitled to notice of, and to vote at, any meeting of stockholders and any
adjournment thereof, or entitled to receive payment of any dividend, or to
any allotment or rights, or to exercise any rights in respect of any
change, conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which record date
shall not be more than 60 nor less than 10 days proceeding the date of any
meeting of stockholders or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection
with obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full
power and authority to enter into, make, sign, execute, acknowledge and/or
deliver and the Secretary or any Assistant Secretary shall have full power
and authority to attest and affix the corporate seal of the Company to any
and all deeds, conveyances, assignments, releases, contracts, agreements,
bonds, notes, mortgages and all other instruments incident to the business
of this Company or in acting as executor, administrator, guardian, trustee,
agent or in any other fiduciary or representative capacity by any and every
method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors
or the Executive Committee, and any and all such instruments shall have the
same force and validity as though expressly authorized by the Board of
Directors and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable
honoraria or fees for attending meetings of the Board of Directors as the
Board of Directors may from time to time determine. Directors and associate
directors who serve as members of committees, other than salaried employees
of the Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall from time
to time determine and directors and associate directors may be employed by
the Company for such special services as the Board of Directors may from
time to time determine and shall be paid for such special services so
performed reasonable compensation as may be determined by the Board of
Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or
may hereafter be amended, any person who was or is made or is threatened to
be made a party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "proceeding")
by reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or
of a partnership, joint venture, trust, enterprise or non-profit entity,
including service with respect to employee benefit plans, against all
liability and loss suffered and expenses reasonably incurred by such
person. The Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by a Director or
officer in his capacity as a Director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the Director or officer to repay all amounts advanced if it
should be ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of expenses, under this Article X is not paid in full within ninety days
after a written claim therefor has been received by the Corporation the
claimant may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have the
burden of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Charter or
Act of Incorporation, these By-Laws, agreement, vote of stockholders or
disinterested Directors or otherwise.
(E) Any repeal or modification of the
foregoing provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all
the members of the Board of Directors then in office.
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and
savings banks with state publication requirements. It has
not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your
state publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ----------------------------------------- --------------
Name of Bank City
in the State of DELAWARE, at the close of business on June 30, 1999.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins...................................207,947
Interest-bearing balances................................................................. 0
Held-to-maturity securities.................................................................... 37,680
Available-for-sale securities................................................................1,598,933
Federal funds sold and securities purchased under agreements to resell.........................180,366
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 4,237,557
LESS: Allowance for loan and lease losses. . . . . . 70,233
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve....................4,167,324
Assets held in trading accounts......................................................................0
Premises and fixed assets (including capitalized leases).......................................141,415
Other real estate owned......................................................................... 922
Investments in unconsolidated subsidiaries and associated companies..............................1,227
Customers' liability to this bank on acceptances outstanding.........................................0
Intangible assets............................................................................... 5,179
Other assets...................................................................................104,101
Total assets.................................................................................6,445,094
LIABILITIES
Deposits:
In domestic offices..........................................................................4,574,509
Noninterest-bearing . . . . . . . . 992,436
Interest-bearing. . . . . . . . . . 3,582,073
Federal funds purchased and Securities sold under agreements to repurchase.................... 344,719
Demand notes issued to the U.S. Treasury........................................................83,802
Trading liabilities (from Schedule RC-D).............................................................0
Other borrowed money:..........................................................................///////
With original maturity of one year or less............................................860,000
With original maturity of more than one year...........................................43,000
Bank's liability on acceptances executed and outstanding.............................................0
Subordinated notes and debentures....................................................................0
Other liabilities (from Schedule RC-G)....................................................... 80,279
Total liabilities............................................................................5,986,309
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................................................0
Common Stock.......................................................................................500
Surplus (exclude all surplus related to preferred stock)........................................62,118
Undivided profits and capital reserves.........................................................412,409
Net unrealized holding gains (losses) on available-for-sale securities........................(16,242)
Total equity capital...........................................................................458,785
Total liabilities, limited-life preferred stock, and equity capital..........................6,445,094
FORM OF
RIGHTS AGREEMENT
BETWEEN
CENDANT CORPORATION
AND
BANK ONE TRUST COMPANY, N.A.
RIGHTS TO PURCHASE NEW FELINE PRIDES
, 1999
RIGHTS AGREEMENT
This RIGHTS AGREEMENT (the "Agreement") is dated as of
1999, between Cendant Corporation, a Delaware corporation (the "Company"),
and The First National Bank of Chicago, a national banking association, as
Rights Agent and Transfer Agent (the "Rights Agent" and the "Transfer
Agent").
RECITALS
WHEREAS, the Company has entered a certain Stipulation and
Agreement of Compromise and Settlement dated as of March 17, 1999 (the
"Settlement Agreement") under which the Company is obligated to issue up to
29,161,474 Rights (the "Rights") entitling each holder thereof to two New
FELINE PRIDES for every three Rights delivered with two Current FELINE
PRIDES; and
WHEREAS, the Rights Agent, at the request of the Company, has
agreed to act as the agent of the Company in connection with the issuance,
registration, transfer, exchange and exercise of the Rights;
NOW, THEREFORE, in consideration of the premises and mutual
agreements herein set forth, the parties hereto agree as follows:
AGREEMENT
1. Certain Definitions
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Current FELINE PRIDES" mean the Income PRIDES ("Current
Income PRIDES") and Growth PRIDES ("Current Growth PRIDES") that were
issued pursuant to a prospectus and prospectus supplement, dated February
23, 1998, and February 24, 1998, respectively.
(b) "New FELINE PRIDES" mean the new Income PRIDES (the "New
Income PRIDES") and new Growth PRIDES (the "New Growth PRIDES") to be
issued pursuant to the Settlement Agreement. Each new Income PRIDES will
consist of a purchase contract (a "Purchase Contract") to purchase shares
of common stock of the Company, $.01 par value per share (collectively, the
"Common Stock") and a trust originated preferred security equal to $50 (the
"Preferred Security") representing a preferred undivided beneficial
interest in the assets of Cendant Capital II, a statutory business trust
formed under the Business Trust Act of the State of Delaware (the "Delaware
Business Trust Act"). Each New Growth PRIDES will consist of a Purchase
Contract and a 1/20 interest in a U.S. Treasury Security maturing on
February 15, 2001, with a face amount at maturity of $1,000 (a "Treasury
Security").
(c) "Additional FELINE PRIDES" mean the additional Income PRIDES
(the "Additional Income PRIDES") and additional Growth PRIDES (the
"Additional Growth PRIDES") to be issued pursuant to the Settlement
Agreement. Each Additional Income PRIDES will consist of a Purchase
Contract and a Preferred Security. Each Additional Growth PRIDES will
consist of a Purchase Contract and a Treasury Security.
(d) "Special FELINE PRIDES" mean the special Income PRIDES (the
"Special Income PRIDES") and special Growth PRIDES (the "Special Growth
PRIDES") to be issued pursuant to the Settlement Agreement. Each Special
Income PRIDES will consist of a Purchase Contract and a trust originated
preferred security equal to $50 representing a preferred undivided
beneficial interest in the assets of Cendant Capital III, Cendant Capital
IV and Cendant Capital V, each a statutory business trust formed under the
Business Trust Act of the State of Delaware (the "Delaware Business Trust
Act"). Each Special Growth PRIDES will consist of a Purchase Contract and
a Treasury Security.
(e) "FELINE PRIDES" shall mean, as the context requires, the
Current FELINE PRIDES, Additional FELINE PRIDES and Special FELINE PRIDES.
(f) "Income PRIDES" shall mean, as the context requires, the
Current Income PRIDES, Additional Income PRIDES and Special Income PRIDES.
(g) "Growth PRIDES" shall mean, as the context requires, the
Current Growth PRIDES, Additional Growth PRIDES and Special Growth PRIDES.
(h) "Distribution Date" means the date of distribution of the
Rights, which will be no later than five (5) business days from the date on
which each and all of the conditions in Section VI of the Settlement
Agreement, set forth in Exhibit B hereof, have been satisfied.
2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as agent for
the Company in accordance with the instructions hereinafter set forth; and
the Rights Agent hereby accepts such appointment, upon the terms and
conditions hereinafter set forth.
3. Amount Issued.
Pursuant to the Settlement Agreement and subject to the provisions
of this Agreement, the Company shall issue up to 29,161,474 transferable
Rights enabling each holder thereof to exchange two Current, Additional or
Special FELINE PRIDES and three Rights for two New FELINE PRIDES.
4. Form of Rights Certificates.
The Rights shall be evidenced by certificates (the "Rights
Certificates") to be delivered pursuant to this Agreement, in registered
form only. The Rights Certificates and the forms of election to exchange
and of assignment to be printed on the reverse thereof shall be in
substantially the form set forth in Exhibit A hereto together with such
appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Agreement, and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with any law or with any rules
made pursuant thereto or with any rules of any securities exchange, any
agreement between the Company and any holder of a Right, or as may,
consistently herewith, be determined by the officers executing such Rights
Certificates, as evidenced by their execution of such Rights Certificates.
5. Execution of Rights Certificates.
Rights Certificates shall be signed on behalf of the Company by its
Chairman, President, a Vice President or its Treasurer and attested by its
Secretary or Assistant Secretary. If the Rights Agent manually
countersigns such Rights Certificates on behalf of the Company, each such
signature upon the Rights Certificates may be in the form of a facsimile
signature of the current or any future Chairman, President, Vice President,
Treasurer, Secretary or Assistant Secretary and may be imprinted or
otherwise reproduced on the Rights Certificates and for that purpose the
Company may adopt and use the facsimile signature of any person who shall
have been Chairman, President, Vice President, Treasurer, Secretary or
Assistant Secretary, notwithstanding the fact that at the time the Rights
Certificates shall be delivered or disposed of, such person shall have
ceased to hold such office.
If any officer of the Company who shall have signed any of the
Rights Certificates shall cease to be such officer before the Rights
Certificates so signed shall have been delivered by the Rights Agent or
disposed of by the Company, such Rights Certificates nevertheless may be
delivered or disposed of as though such person had not ceased to be such
officer of the Company; and any Rights Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company to sign
such Rights Certificate, notwithstanding that on the date of the execution
of this Agreement any such person was not such officer.
6. Issue of Rights Certificates.
As soon as practicable after the Distribution Date, the Rights
Agent will send by first-class, insured, postage prepaid mail, to each
person set forth on the list provided by the Company, at the address of
such holder as shown on the records of the Company, a Rights Certificate,
evidencing the number of Rights set forth on such list. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
7. Registration of Rights Certificate
The Rights Certificates shall be numbered and shall be registered
in a register (the "Rights Register") to be maintained by the Rights Agent.
The Company and the Rights Agent may deem and treat the registered holder
of a Rights Certificate as the absolute owner thereof (notwithstanding any
notation of ownership or other writing thereon made by anyone), for the
purpose of any exercise thereof or any distribution to the holder thereof
and for all other purposes, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
8. Registration of Transfers and Exchanges.
Until the Close of Business on the Expiration Date (as hereinafter
defined), the Rights Agent shall from time to time register the transfer of
any outstanding Rights Certificates in the Rights Register, upon surrender
of such Rights Certificates, duly endorsed, and, if not surrendered by or
on behalf of an Original Holder of Rights Certificates accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Rights Agent, duly signed by the registered holder or holders thereof or by
the duly appointed legal representative thereof or by a duly authorized
attorney, such signature to be guaranteed by an "eligible guarantor
institution" as defined under Rule 17Ad-15 promulgated under the Securities
Exchange Act of 1934, as amended. Upon any such registration of transfer, a
new Rights Certificate shall be issued to the transferee.
Rights Certificates may be exchanged at the option of the holder or
holders thereof, when surrendered to the Rights Agent at its offices or
agency maintained in [ ] (or at such other offices or
agencies as may be designated by the Agent) for the purpose of exchanging,
transferring and exercising the Rights, (a "Rights Agent Office,") or at
the offices of any successor Rights Agent as provided in Section 20 hereof,
for another Rights Certificate or other Rights Certificates of like tenor
and representing in the aggregate a like number of Rights.
9. Duration and Exercise of Rights; Rights Price.
(a) The Rights shall expire at 5:00 p.m. Eastern Standard Time
(the "Close of Business") on February 14, 2001 (the "Expiration Date").
Until the Close of Business on the Expiration Date, the Rights may be
exercised on any business day. After the Close of Business on the
Expiration Date, the Rights will become void and of no value and all
related Company obligations shall expire.
(b) (i) Subject to the terms of this Agreement, each holder of
Rights shall have the right, from the time the Rights are distributed
until the Close of Business on the Expiration Date, to purchase from the
Company upon exercise of three Rights, for a consideration consisting of
two Income PRIDES, two New Income PRIDES, upon surrender to the Company,
at the principal office of the Rights Agent, of the instruments
specified in paragraph (c) below. In order to exercise Rights, the
record owner of the Rights and the Income PRIDES tendered in connection
therewith must be identical.
(ii) Notwithstanding the foregoing, no holder of Rights will
be entitled to exercise such Rights for New Growth PRIDES unless (i)
such holder received Rights as part of the original distribution of
the Rights, as evidenced by its inclusion on the list supplied by the
Company pursuant to Section 6 and the number of Rights to be exercised
for New Growth PRIDES doe not exceed, together with all other Rights
so exercised by such holder, the number of Rights originally
distributed to such holder or (ii) the Company otherwise agrees. If a
holder of Rights who is not entitled to exercise Rights for Growth
PRIDES attempts to so exercise Rights, the Rights certificate shall be
returned to such holder as soon as practicable with a notice of
rejection.
(c) A Rights holder shall exercise such holder's right to exchange
Rights and Current FELINE PRIDES for New FELINE PRIDES:
(i) by depositing with the Rights Agent at the Rights Agent
Office the Rights Certificate evidencing such Rights with the form of
election to purchase on the reverse thereof duly completed and signed
by the registered holder or holders thereof or by the duly appointed
legal representative thereof or by a duly authorized attorney. Such
signature shall be guaranteed in the manner described in Section 8
hereof unless (1) the form of Election provides that the New FELINE
PRIDES are to be delivered directly to the record owner of those
Rights, or (2) the Rights Certificate is submitted for the account of
a member firm of a registered national securities exchange or a member
of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in
the United States, and
(ii) by depositing with the Rights Agent at a Rights Agent
Office the FELINE PRIDES certificate representing the requisite amount
of FELINE PRIDES or by effecting a book entry transfer of the
requisite amount of FELINE PRIDES;
(d) Once a Rights holder exercises such holder's Rights, such
exercise may not be revoked.
(e) The Rights evidenced by a Rights Certificate shall be
exercisable, at the election of the registered holder thereof, in whole or
in part from time to time up to an aggregate amount equal to the number of
Rights specified in the Rights Certificate. If less than all of the Rights
evidenced by a Rights Certificate surrendered upon the exercise of Rights
are exercised at any time prior to the Expiration Date, a new Rights
Certificate or Certificates shall be issued for the number of Rights
evidenced by the Rights Certificate so surrendered that have not been
exercised.
(f) The Rights Agent shall account promptly to the Company with
respect to Rights exercised.
(g) If either the number of Rights being exercised is not
specified on a Rights Certificate, or the number of FELINE PRIDES is not
sufficient to pay the full aggregate consideration for all New FELINE
PRIDES stated to be subscribed for, the Rights holder will be deemed to
have exercised the maximum number of Rights that could be exercised for the
consideration delivered by such Rights holder. If the consideration
delivered by the Rights holder exceeds the aggregate consideration for the
number of Rights evidenced by the Rights Certificate(s) delivered by such
Rights holder, the consideration will be applied to subscribe for New
FELINE PRIDES up to the maximum payment required for use of all evidenced
Rights. Any excess consideration remaining after the foregoing allocation
will be returned to the Rights holder.
(h) The consideration for the New FELINE PRIDES shall be paid as
follows: (i) if the registered holder of Rights Certificates uses Current
FELINE PRIDES as part of the consideration for the New FELINE PRIDES, the
consideration shall be paid directly to the Rights Agent; (ii) if the
registered holder of Rights Certificates uses Additional or Special FELINE
PRIDES as part of the consideration for the New FELINE PRIDES, the
consideration shall be paid to Merrll Lynch & Co., as broker-dealer, which
shall forward such consideration to the Rights Agent. In either case, the
Rights Agent shall deliver the New FELINE PRIDES directly to such
registered holder of Rights Certificates.
(i) The Company covenants that all New FELINE PRIDES issued upon
exercise of the Rights will, upon issuance in accordance with the terms of
this Agreement, be fully paid and nonassessable and free from all liens,
charges and security interests created by or imposed upon the Company with
respect to the issuance thereof.
10. Cancellation of Rights.
If the Company shall purchase or otherwise acquire Rights, the
Rights Certificates representing such Rights shall thereupon be delivered
to the Rights Agent and be canceled by it and retired. The Rights Agent
shall cancel all Rights Certificates surrendered for exchange,
substitution, transfer or exercise in whole or in part.
11. Payment of Taxes.
The Company shall pay all documentary stamp taxes attributable to
the initial issuance of Rights, New FELINE PRIDES, Additional FELINE PRIDES
and Special FELINE PRIDES; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any
transfer involved in the issue of any Rights Certificates or any
certificates for New FELINE PRIDES, Additional FELINE PRIDES or Special
FELINE PRIDES in a name other than the registered Holder of a Rights
Certificate surrendered upon the exercise of a Right, and the Company shall
not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid or adequate
provision has been made for the payment thereof.
12. Mutilated or Missing Rights Certificates.
If any of the Rights Certificates shall be mutilated, lost, stolen
or destroyed, the Company may in its discretion issue, and the Rights Agent
shall deliver, in exchange and substitution for and upon cancellation of
the mutilated Rights Certificate, or in lieu of and substitution for the
Rights Certificate lost, stolen or destroyed, a new Rights Certificate of
like tenor and representing an equivalent number of Rights, but only upon
receipt of evidence satisfactory to the Company and the Rights Agent of
such loss, theft or destruction of such Rights Certificate and indemnity or
bond, if requested, also satisfactory to them. Applicants for such
substitute Rights Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company or the
Rights Agent may prescribe.
13. Transfer, Split up, Combination and Exchange of Rights Certificate.
At any time after the close of business on the Distribution Date,
and at or prior to the close of business on the Expiration Date, any Rights
Certificate or Rights Certificates may be transferred, split up, combined
or exchanged for another Rights Certificate or Rights Certificates,
entitling the registered holder to exchange such Rights Certificate or
Rights Certificates for the number of New FELINE PRIDES evidenced by such
Rights Certificate or Rights Certificates. Any registered holder desiring
to transfer, split up, combine or exchange any Rights Certificate shall
make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights Certificates to be transferred,
split up, combined or exchanged at the principal office of the Rights
Agent. Thereupon the Rights Agent shall deliver to the Persons entitled
thereto the Rights Certificate or Rights Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Rights Certificates.
14. Registration of New FELINE PRIDES, Additional FELINE PRIDES
and Special FELINE PRIDES.
The Company has filed with the SEC registration statements for the
New FELINE PRIDES, the Additional FELINE PRIDES and Special FELINE PRIDES
on Forms S-3, each of which have been or will be declared effective. The
Company will use its best efforts to keep the registration statements
continuously effective from the date hereof through the Close of Business
ten (10) business days following the Expiration Date. So long as any
unexpired Rights remain outstanding, the Company will take all necessary
action to obtain and keep effective any and all permits, consents and
approvals of government agencies and authorities and to make filings under
federal and state securities acts and laws, which may be or become
necessary in connection with the issuance, sale, transfer and delivery of
the Rights Certificates, the exercise of the Rights and the issuance, sale,
transfer and delivery of the Shares issued upon exercise of Rights.
15. Furnishing Prospectus to Registered Holders of Rights Certificates
The Rights Agent, on behalf of the Company, will furnish a copy
of the prospectus included as part of the registration statement for the
New FELINE PRIDES to (1) any person to whom Rights shall have been issued
pursuant to the terms hereof, on or before the delivery of such Rights, and
(2) every exercising registered holder of Rights Certificates with, or
prior to, the delivery of the New FELINE PRIDES; provided, however, that,
if such holder has been previously provided a prospectus, the Rights Agent
will not be obligated to provide a prospectus to such holder. The Company
will supply the Rights Agent with sufficient copies of the prospectus to
perform its delivery duties as provided for in this Section 15.
The Rights Agent will also make available appropriately signed and
countersigned New FELINE PRIDES upon the exchange of such Rights for the
New FELINE PRIDES.
16. Merger, Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Rights
Agent shall be a party, or any corporation succeeding to the shareholder
services business of the Rights Agent, shall be the successor to the Rights
Agent hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 20.
17. Rights Agent.
The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent shall not be responsible for any failure of
the Company to comply with any of the covenants contained in this Agreement
or in the Rights Certificates to be complied with by the Company nor shall
it at any time be under any duty or responsibility to any holder of a Right
to make or cause to be made any adjustment in the number of New FELINE
PRIDES issuable upon exercise of any Rights, or in the consideration for
the Additional FELINE PRIDES or Special FELINE PRIDES (except as instructed
by the Company)
(b) The Company agrees to indemnify the Rights Agent and save it
harmless against any and all losses, liabilities and expenses, including
judgments, costs and reasonable counsel fees and expenses, for anything
done or omitted by the Rights Agent arising out of or in connection with
this Agreement except as a result of its negligence or bad faith.
(c) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing the provisions of this Agreement.
(d) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman, the President, any Vice President, the Controller, the
Treasurer or an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or in good faith reliance upon any
statement signed by any one of such officers of the Company with respect to
any fact or matter (unless other evidence in respect thereof is herein
specifically prescribed) which may be deemed to be conclusively proved and
established by such signed statement.
18. Change of Rights Agent.
If the Rights Agent shall resign (such resignation to become
effective not earlier than sixty (60) days after the giving of written
notice thereof to the Company and the registered holders of Rights
Certificates) or shall become incapable of acting as Rights Agent or if the
Board of Directors of the Company shall by resolution remove the Rights
Agent (such removal to become effective not earlier than thirty (30) days
after the filing of a certified copy of such resolution with the Rights
Agent and the giving of written notice of such removal to the registered
holders of Rights Certificates), the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within
a period of thirty (30) days after such removal or after it has been so
notified in writing of such resignation or incapacity by the Rights Agent
or by the registered holder of a Rights Certificate (in the case of
incapacity), then the registered holder of any Rights Certificate may apply
to any court of competent jurisdiction for the appointment of a successor
to the Rights Agent. Pending appointment of a successor to the Rights
Agent, either by the Company or by such court, the duties of the Rights
Agent shall be carried out by the Company. Any successor Rights Agent,
whether appointed by the Company or by such court, shall be a bank or trust
company, in good standing, incorporated under the laws of any state or of
the United States of America. As soon as practicable after appointment of
the successor Rights Agent, the Company shall cause written notice of the
change in the Rights Agent to be given to each of the registered holders of
the Rights Certificates at such holder's address as appears on the Rights
Register. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed. The former
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder and execute and deliver, at the
expense of the Company, any further assurance, conveyance, act or deed
necessary for the purpose. Failure to give any notice provided for in this
Section 20 or any defect therein, shall not affect the legality or validity
of the removal of the Rights Agent or the appointment of a successor Rights
Agent, as the case may be.
19. Rights of Action.
All rights of action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates; and any
registered holder of any Rights Certificate without the consent of the
Rights Agent or of the holder of any other Rights Certificate, may, on his
own behalf and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by such
Rights Certificate in the manner provided in such Rights Certificate in
this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders
of Rights would not have an adequate remedy at law for any breach of this
Agreement and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened violations of
the obligations hereunder of any Person subject to this Agreement. Holders
of Rights shall be entitled to recover the reasonable costs and expenses,
including attorney's fees, incurred by them in any action to enforce the
provisions of this Agreement.
20. Right holder Not Deemed a Stockholder.
Nothing contained in this Agreement or in any of the Rights
Certificates shall be construed as conferring upon the holders thereof the
right to vote or to receive dividends or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or for the election
of directors of the Company or any other matter, or any rights whatsoever
as stockholders of the Company.
21. Notices to Company and Rights Agent.
Any notice or demand authorized by this Agreement to be given or
made by the Rights Agent or by any registered holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if
sent by mail, first-class or registered, postage prepaid, addressed (until
another address is filed in writing by the Company with the Rights Agent),
as follows:
Cendant Corporation
9 West 57th Street
37th Floor
New York, New York 10019
Attention: [ ]
If the Company shall fail to maintain such office or agency or
shall fail to give such notice of any change in the location thereof,
presentation may be made and notices and demands may be served at the
principal office of the Rights Agent.
Any notice pursuant to this Agreement to be given by the Company or
by any registered holder of any Rights Certificate to the Rights Agent
shall be sufficiently given if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Rights Agent
with the Company), as follows:
First National Bank of Chicago
1 North State Street
9th Floor
Chicago, Illinois 60670-0126
Attention: [ ]
The Rights Agent maintains a Rights Agent Office at .
22. Supplements and Amendments.
The Company and the Rights Agent may from time to time supplement
or amend this Agreement without approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein or (iii) to change or
supplement the provisions hereunder in any manner which shall not adversely
affect the interests of the holders of Rights Certificates. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms of this Section 24, the Rights Agent shall execute such supplement or
amendment unless the Rights Agent shall have determined in good faith that
such supplement or amendment would adversely affect its interests under
this Agreement. Any supplement or amendment of this Rights Agreement shall
be in writing and signed on behalf of the Company and the Rights Agent.
23. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
24. Termination.
This Agreement shall terminate on the Close of Business on a date
which is fifteen business days after the Expiration Date. Upon termination
of this Agreement, the Rights Agent shall retain all canceled Rights
Certificates and related documentation as required by applicable law.
25. Governing Law.
This Agreement and each Rights Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of New York and
for all purposes shall be construed in accordance with the internal laws of
the State of New York without regard to principles of conflict of law or
choice of laws of the State of New York or any other jurisdiction which
would cause the application of any laws other than of the State of New
York.
26. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any person
or corporation other than the Company, the Rights Agent and the registered
holders of the Rights Certificates any legal or equitable right, remedy or
claim under this Agreement, and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates.
27. Counterparts.
This Agreement may be executed in a number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original,
and such counterparts shall together constitute but one and the same
instrument.
28. Headings.
The headings of sections of this Agreement have been inserted for
convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF the parties hereto have caused this Rights
Agreement to be executed and delivered as of the day and year first above
written.
CENDANT CORPORATION
By: ________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By: ___________________________
Name:
Title:
Exhibit A
Form of Rights Certificate
Certificate No. - ____________ Rights
NOT EXERCISABLE AFTER FEBRUARY 14, 2001
Rights Certificate
CENDANT CORPORATION
This certifies that ------------------------, or its registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement dated as of ,
1999, (the "Rights Agreement") between Cendant Corporation, a Delaware
corporation (the "Company"), and the First National Bank of Chicago, as
rights agent (the "Rights Agent"), to exchange at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and
prior to 5:00 P.M. (New York time) on February 14, 2001, at the principal
office of the Rights Agent in [ ], three Rights combined with two
Income PRIDES or two Growth (as such terms are defined in the Rights
Agreement) for two New Income PRIDES or two New Growth PRIDES, as the case
may be (as such terms are defined in the Rights Agreement), or integral
multiples thereof, upon presentation and surrender of this Rights
Certificate with the appropriate Form of Election to exchange duly
executed.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office of the Rights Agent,
may be exchanged for another Rights Certificate or Rights Certificates of
like tenor and date evidencing Rights entitling the holder to exchange such
Rights Certificate or Rights Certificates for a like aggregate number of
New FELINE PRIDES as the Rights evidenced by the Rights Certificate or
Rights Certificates surrendered. In the event that this Rights Certificate
is exercised, the holder hereof shall be entitled to receive this Rights
Certificate duly marked to indicate that such exercise has occurred as set
forth in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose to be the holder
of New FELINE PRIDES or of any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other actions
affecting shareholders (except as provided in the Rights Agreement), until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of , 1999.
ATTEST: [Seal] CENDANT CORPORATION
______________________ By: ________________________
Name: Name:
Title: Title:
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Rights Certificate.)
FOR VALUE RECEIVED --------------------------------------------------------
hereby sells, assigns and transfers unto --------------------------
(Please print name and address of transferee) -----------------------------
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocable constitute and appoint ---------------
------------- Attorney, to transfer the within Rights Certificate on the
books of the within-named Company, with full power of substitution.
Dated: ----------------------------
_____________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stock broker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule
17Ad-15 of the Securities Exchange Act of 1934.
FORM OF ELECTION TO EXCHANGE
(To be executed if holder desires to exercise the Rights Certificate
pursuant to Sections 9, 10 or 11 of the Rights Agreement)
TO CENDANT CORPORATION:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to exchange
FELINE PRIDES for New FELINE PRIDES issuable upon the exercise of the
Rights and requests that certificates for such New FELINE PRIDES be issued
in the name of and delivered to:
______________________________________________________________________
(Please insert social security or other identifying number)
______________________________________________________________________
(Please print name and address)
______________________________________________________________________
The Rights Certificate indicating the balance, if any, of such
Rights which may still be exercised pursuant to Sections 9, 10 or 11 of the
Rights Agreement shall be returned to the undersigned unless such person
requests that the Rights Certificate be registered in the name of and
delivered to:
______________________________________________________________________
Please insert social security or other identifying number
(complete only if Rights Certificate is to be registered in a name other
than the undersigned)
______________________________________________________________________
(Please print name and address)
______________________________________________________________________
Date: _________________
__________________
Signature
Signature Guaranteed:
Signatures must be guaranteed, if required under Sections 9, 10 or 11 of
the Rights Agreement, by an eligible guarantor institution (a bank, stock
broker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of
the Securities Exchange Act of 1934.
