Execution
Version
Replacement Capital
Covenant
by
MetLife, Inc.
dated as of April 8, 2008
Replacement Capital Covenant ,
dated as of April 8, 2008 (this “ Replacement Capital
Covenant ”), by MetLife, Inc., a Delaware corporation
(together with its successors and assigns, the “
Corporation ”), in favor of and for the benefit of
each Covered Debtholder (as defined below).
RECITALS
(A) On the date hereof, MetLife
Capital Trust X, a statutory trust formed under Delaware law and
sponsored by the Corporation, is issuing $750,000,000 aggregate
principal amount of its 9.250% Fixed-to-Floating Rate Exchangeable
Surplus Trust Securities and may, in accordance with the terms of
the Amended Declaration (as defined below), issue further
securities that are fungible with the outstanding trust securities
for U.S. federal income tax purposes (collectively, the “
X-SURPS ”) automatically exchangeable in specified
circumstances into the Corporation’s 9.250% Fixed-to-Floating
Rate Junior Subordinated Debentures due 2068 (the “ Junior
Subordinated Debentures ”). In this Replacement Capital
Covenant, the term “ Securities ” refers to the
X-SURPS prior to an Exchange and the Junior Subordinated Debentures
thereafter.
(B) This Replacement Capital
Covenant is the “Replacement Capital Covenant” referred
to in the Offering Circular, dated April 1, 2008, relating to
the Securities (the “ Offering Circular
”).
(C) The Corporation is entering
into and disclosing the content of this Replacement Capital
Covenant in the manner provided below with the intent that the
covenants provided for in this Replacement Capital Covenant be
enforceable by each Covered Debtholder and that the Corporation be
estopped from disregarding the covenants in this Replacement
Capital Covenant, in each case to the fullest extent permitted by
applicable law.
(D) The Corporation acknowledges
that reliance by each Covered Debtholder upon the covenants in this
Replacement Capital Covenant is reasonable and foreseeable by the
Corporation and that, were the Corporation to disregard its
covenants in this Replacement Capital Covenant, each Covered
Debtholder would have sustained an injury as a result of its
reliance on such covenants.
Now, Therefore , the Corporation
hereby covenants and agrees as follows in favor of and for the
benefit of each Covered Debtholder.
1. Definitions. Capitalized terms
used in this Replacement Capital Covenant (including the Recitals)
have the respective meanings set forth in Schedule I
hereto.
2. Limitations on Repayment, Redemption and
Purchase of Junior Subordinated Debentures. The Corporation
hereby promises and covenants to and for the benefit of each
Covered Debtholder that the Corporation shall not repay, redeem or
purchase (for the avoidance of doubt, any reference in this
Replacement Capital Covenant to any repayment of the
Corporation’s securities will be deemed to include a
reference to defeasance of the Corporation’s obligations
under the securities), and will cause its Subsidiaries not to
repay, redeem or purchase and shall not permit to be repaid,
redeemed or repurchased, as applicable, the
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Securities on or before April 8, 2058, except to the extent
that the principal amount repaid or the applicable redemption,
repayment or purchase price does not exceed the Applicable
Percentage of the aggregate amount of net cash proceeds received by
the Corporation and its Subsidiaries since the most recent
Measurement Date (without double counting proceeds received in any
prior Measurement Period) from the sale of Common Stock, rights to
acquire Common Stock, Mandatorily Convertible Preferred Stock, Debt
Exchangeable for Common Equity, Debt Exchangeable for Preferred
Equity and Qualifying Capital Securities (collectively, “
Replacement Capital Securities ”).
3. Covered Debt.
(a) The Corporation represents
and warrants that the Initial Covered Debt is Eligible Debt.
(b) On or during the 30-day
period immediately preceding any Redesignation Date with respect to
the Covered Debt then in effect, the Corporation shall identify the
series of Eligible Debt that will become the Covered Debt on and
after such Redesignation Date in accordance with the following
procedures:
(i) the Corporation shall identify
each series of its then outstanding long-term indebtedness for
money borrowed that is Eligible Debt;
(ii) if only one series of the
Corporation’s then outstanding long-term indebtedness for
money borrowed is Eligible Debt, such series shall become the
Covered Debt commencing on the related Redesignation Date;
(iii) if the Corporation has more
than one outstanding series of long-term indebtedness for money
borrowed that is Eligible Debt, then the Corporation shall identify
the series that has the latest stated final maturity date as of the
date the Corporation is applying the procedures in this Section
3(b) and such series shall become the Covered Debt on the related
Redesignation Date;
(iv) the series of outstanding
long-term indebtedness for money borrowed that is determined to be
Covered Debt pursuant to this Section 3(b) shall be the Covered
Debt for purposes of this Replacement Capital Covenant for the
period commencing on the related Redesignation Date and continuing
to but not including the Redesignation Date as of which a new
series of outstanding long-term indebtedness is next determined to
be the Covered Debt pursuant to the procedures set forth in this
Section 3(b); and
(v) in connection with such
identification of a new series of Covered Debt, the Corporation
shall, as provided for in Section 3(c), give a notice and file
with the Commission a current report on Form 8-K including or
incorporating by reference this Replacement Capital Covenant as an
exhibit within the time frame provided for in such section.
(c) In order to give effect to
the intent of the Corporation described in Recital C, the
Corporation covenants that (i) simultaneously with the
execution of this Replacement Capital Covenant or as soon as
practicable after the date hereof, it shall (A) give notice to
the holders of the
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Initial
Covered Debt, in the manner provided in the indenture relating to
the Initial Covered Debt, of this Replacement Capital Covenant and
the rights granted to such holders hereunder and (B) file a copy of
this Replacement Capital Covenant with the Commission as an exhibit
to a current report on Form 8-K (or any successor form) under the
Exchange Act; (ii) so long as the Corporation is a reporting
company under the Exchange Act, the Corporation will include in
each annual report filed with the Commission on Form 10-K (or any
successor form) under the Exchange Act a description of the
covenant set forth in Section 2 and identify the series of
long-term indebtedness for borrowed money that is Covered Debt as
of the date such annual report on Form 10-K (or any successor form)
is filed with the Commission; (iii) if a series of the
Corporation’s long-term indebtedness for money borrowed
(A) becomes Covered Debt or (B) ceases to be Covered Debt
pursuant to the procedures set forth in Section 3(b), the
Corporation shall give notice of such occurrence within
30 days to the holders of such long-term indebtedness for
money borrowed in the manner provided for in the indenture, fiscal
agency agreement or other instrument under which such long-term
indebtedness for money borrowed was issued and report such change
in a current report on Form 8-K (or any successor form) including
or incorporating by reference this Replacement Capital Covenant,
and in the Corporation’s next quarterly report on Form 10-Q
(or any successor form) or annual report on Form 10-K (or any
successor form), as applicable; (iv) if, and only if, the
Corporation ceases to be a reporting company under the Exchange
Act, the Corporation shall post on its website (or other similar
electronic platform generally available to the public) the
information otherwise required to be included in Exchange Act
filings pursuant to clauses (ii) and (iii) of this
Section 3(c) and cause a notice of the execution of the Replacement
Capital Covenant to be posted on the Bloomberg screen for the
Covered Debt or any successor Bloomberg screen and each similar
third-party vendor’s screen the Corporation reasonably
believes is appropriate (each an “ Investor Screen
”) and cause a hyperlink to a definitive copy of this
Replacement Capital Covenant to be included on the Investor Screen
for each series of Covered Debt, in each case to the extent
permitted by Bloomberg or such similar third-party vendor, as the
case may be; and (v) promptly upon request by any holder of Covered
Debt, the Corporation shall provide such holder with a conformed
copy of this Replacement Capital Covenant.
4. Termination, Amendment and
Waiver.
(a) The obligations of the
Corporation pursuant to this Replacement Capital Covenant shall
remain in full force and effect until the earliest (the “
Termination Date ”) to occur of (i) April 8,
2058, or, if earlier, the date on which the Securities are
otherwise repaid, redeemed or purchased in full in compliance with
this Replacement Capital Covenant, (ii) the date, if any, on
which the holders of a majority in principal amount of the
then-effective series of Covered Debt consent or agree in writing
to the termination of this Replacement Capital Covenant and the
Corporation’s obligations hereunder, (iii) the date on
which the Corporation ceases to have any series of outstanding
Eligible Senior Debt or Eligible Subordinated Debt (in each case,
without giving effect to the rating requirement in clause
(b) of the definition of each such term) (iv) the date on
which a JSD Event of Default under the Junior Subordinated
Indenture resulting in an acceleration of the Junior Subordinated
Debentures occurs, and (v) a Change of Control Event. From and
after the Termination Date, the obligations of the Corporation
pursuant to this Replacement Capital Covenant shall be of no
further force and effect.
4
(b) This Replacement Capital
Covenant may be amended or supplemented from time to time with the
consent of the holders of at least a majority in principal amount
of the then-effective series of Covered Debt. The Corporation may,
acting alone and without the consent of such holders, amend or
supplement this Replacement Capital Covenant if (i) the effect
of such amendment or supplement is solely to impose additional
restrictions on the types of securities qualifying as Replacement
Capital Securities, and an officer of the Corporation has delivered
to such holders in the manner provided for in the indenture, fiscal
agency agreement or other instrument with respect to such Covered
Debt a written certificate to that effect, (ii) such amendment
or supplement is not adverse to such holders and one of the
Corporation’s officers has delivered to such holders in the
manner provided for in the indenture, fiscal agency agreement or
other instrument with respect to such holders a written certificate
stating that, in his or her determination, such amendment or
supplement is not adverse to such Covered Debtholders, or
(iii) such amendment or supplement eliminates Common Stock,
rights to acquire Common Stock, Debt Exchangeable for Common Equity
and/or Mandatorily Convertible Preferred Stock as Replacement
Capital Securities if, after the date of this Replacement Capital
Covenant, an accounting standard or interpretive guidance of an
existing accounting standard issued by an organization or regulator
that has responsibility for establishing or interpreting accounting
standards in the United States becomes effective such that there is
more than an insubstantial risk that failure to eliminate Common
Stock, rights to acquire Common Stock, rights to acquire Common
Stock, Debt Exchangeable for Common Stock and/or Mandatorily
Convertible Preferred Stock as a Replacement Capital Security would
result in a reduction in the Corporation’s earnings per
share, as calculated in accordance with generally accepted
accounting principles in the United States.
(c) For purposes of Sections
4(a) and 4(b), the holders whose consent or agreement is required
to terminate, amend or supplement the obligations of the
Corporation under this Replacement Capital Covenant shall be the
holders of the then-effective Covered Debt as of a record date
established by the Corporation that is not more than 30 days
prior to the date on which the Corporation proposes that such
termination, amendment or supplement becomes effective.
5. Miscellaneous .
(a) This Replacement Capital
Covenant shall be governed by and construed in accordance with the
laws of the State of New York.
(b) This Replacement Capital
Covenant shall be binding upon the Corporation and its successors
and assigns and shall inure to the benefit of the Covered
Debtholders as they exist from time to time (it being understood
and agreed by the Corporation that any Person who is a Covered
Debtholder at the time such Person acquires, holds or sells Covered
Debt shall retain its status as a Covered Debtholder for so long as
the series of long-term indebtedness for borrowed money owned by
such Person is Covered Debt and, if such Person initiates a claim
or proceeding to enforce its rights under this Replacement Capital
Covenant after the Corporation has violated its covenants in
Section 2 and before the series of long-term indebtedness for money
borrowed held by such Person is no longer Covered Debt, such
Person’s rights under this Replacement Capital Covenant shall
not terminate prior to a Termination Date solely by reason of such
series of long-term indebtedness for money borrowed no longer being
Covered Debt).
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(c) All demands, notices,
requests and other communications to the Corporation under this
Replacement Capital Covenant shall be deemed to have been duly
given and made if in writing and (i) if served by personal delivery
upon the Corporation, on the day so delivered (or, if such day is
not a Business Day, the next succeeding Business Day), (ii) if
delivered by registered post or certified mail, return receipt
requested, or sent to the Corporation by a national or
international courier service, on the date of receipt by the
Corporation (or, if such date of receipt is not a Business Day, the
next succeeding Business Day), or (iii) if sent by telecopier,
on the day telecopied, or if not a Business Day, the next
succeeding Business Day, provided that the telecopy is promptly
confirmed by telephone confirmation thereof, and in each case to
the Corporation at the address set forth below, or at such other
address as the Corporation may thereafter notify to Covered
Debtholders or post on its website as the address for notices under
this Replacement Capital Covenant:
MetLife,
Inc.
One MetLife Plaza
Long Island City, NY 11101
(d) If the Corporation is
obligated to sell Replacement Capital Securities and apply the net
proceeds to payments of principal of or interest on any outstanding
securities in addition to the Securities, then on any date and for
any period the amount of net proceeds received by the Corporation
from those sales and available for such payments shall be applied
to the Securities and those other securities having the same
scheduled repayment date or scheduled redemption date as the
Securities pro rata in accordance with their respective outstanding
principal amounts and none of such net proceeds shall be applied to
any other securities having a later scheduled repayment date or
scheduled redemption date until the principal of and all accrued
and unpaid interest on the Securities has been paid in full.
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In Witness Whereof , the
Corporation has caused this Replacement Capital Covenant to
be executed by its duly authorized officer, as of the day and year
first above written.
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MetLife, Inc. |
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By: |
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/s/ Eric T. Steigerwalt |
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Name: |
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Eric T. Steigerwalt |
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Title: |
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Senior Vice President and
Treasurer |
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Replacement Capital
Covenant
Schedule I
Definitions
“ Alternative Payment
Mechanism ” means, with respect to any securities or
combination of securities (together in this definition, “such
securities”), provisions in the related transaction documents
requiring the Corporation to issue (or use APM Commercially
Reasonable Efforts to issue) one or more types of APM Qualifying
Securities raising eligible proceeds at least equal to the deferred
Distributions on such securities and apply the proceeds to pay
unpaid Distributions on such securities, commencing on the earlier
of (x) the first Distribution Date after commencement of a
deferral period on which the Corporation pays current Distributions
on such securities and (y) the fifth anniversary of the
commencement of such deferral period, and that:
(a) define “eligible
proceeds” to mean, for purposes of such Alternative Payment
Mechanism, the net proceeds (after underwriters’ or placement
agents’ fees, commissions or discounts and other expenses
relating to the issuance or sale of the relevant securities, where
applicable, and including the fair market value of property
received by the Corporation or any of its Subsidiaries as
consideration for such securities) that the Corporation has
received during the 180 days prior to the related Distribution
Date from the issuance of APM Qualifying Securities, up to the
Preferred Cap (as defined in paragraph (f) below) in the case
of APM Qualifying Securities that are Qualifying Non-Cumulative
Perpetual Preferred Stock and Mandatorily Convertible Preferred
Stock;
(b) permit the Corporation to
pay current Distributions on any Distribution Date out of any
source of funds but (x) require the Corporation to pay
deferred Distributions only out of eligible proceeds and
(y) prohibit the Corporation from paying deferred
Distributions out of any source of funds other than eligible
proceeds, unless (if the Corporation elects to so provide in the
terms of such securities) an Applicable Governmental Authority
directs otherwise or an event of default has occurred that results
in the acceleration of such securities;
(c) include a Repurchase
Restriction that applies if deferral of Distributions continues for
more than one year;
(d) notwithstanding the
foregoing provision, if an Applicable Governmental Authority
disapproves the issuer’s sale of APM Qualifying Securities,
may (if the Corporation elects to so provide in the terms of such
securities) permit the Corporation to pay deferred Distributions
from any source without a breach of its obligations under the
transaction documents;
(e) if an Applicable
Governmental Authority does not disapprove the Corporation’s
issuance and sale of APM Qualifying Securities but disapproves the
use of the proceeds thereof to pay deferred Distributions, may (if
the Corporation elects to so provide in the terms of such
securities) permit the Corporation to use such proceeds for other
purposes and to continue to defer Distributions without a breach of
its obligations under the transaction documents; and
(f) limit the obligation of the
Corporation to issue (or use APM Commercially Reasonable Efforts to
issue) APM Qualifying Securities up to:
S-1
(i) in the case of APM Qualifying
Securities that are Common Stock or Qualifying Warrants, an amount
from the issuance thereof pursuant to the Alternative Payment
Mechanism (including at any point in time from all prior issuances
thereof pursuant to the Alternative Payment Mechanism) with respect
to deferred Distributions attributable to the first five years of
any deferral period equal to (a) 2% of the product of the
average of the current stock market prices of the Common Stock on
the ten consecutive trading days ending on the fourth trading day
immediately preceding the date of issuance multiplied by the total
number of issued and outstanding shares of Common Stock as of the
date of the Corporation’s most recent publicly available
consolidated financial statements or (b) to a number of shares
of Common Stock and shares purchasable upon exercise of Qualifying
Warrants, in the aggregate, not in excess of 2% of the outstanding
number of shares of Common Stock (the “ Common Cap
”), provided (and it being understood) that the Common Cap
shall cease to apply to such deferral period by a date (as
specified in the related transaction documents) which shall be not
later than the ninth anniversary of the commencement of such
deferral period;
(ii) in the case of APM Qualifying
Securities that are Qualifying Non-Cumulative Perpetual Preferred
Stock or Mandatorily Convertible Preferred Stock, an amount from
the issuance thereof pursuant to the related Alternative Payment
Mechanism (including at any point in time from all prior issuances
thereof pursuant to such Alternative Payment Mechanism) equal to
25% of the initial principal or stated amount of the securities
that are the subject of the related Alternative Payment Mechanism
(the “ Preferred Cap ”);
(iii) in the case of Qualifying
Capital Securities other than Qualifying Non-Cumulative Perpetual
Preferred Stock, include a Bankruptcy Claim Limitation
Provision;
(g) may include a provision that
limits the Corporation’s ability to sell its Common Stock,
Qualifying Warrants or Mandatorily Convertible Preferred Stock
above an aggregate cap specified in the transaction documents (a
“ Share Cap ”), subject to the
Corporation’s agreement to use commercially reasonable
efforts to increase the Share Cap amount (i) only to the
extent that it can do so and simultaneously satisfy its future
fixed or contingent obligations under other securities and
derivative instruments that provide for settlement or payment in
Common Stock or (ii) if the Corporation cannot increase the
Share Cap amount as contemplated in clause (i) above, by
requesting the Corporation’s board of directors to adopt a
resolution for a stockholder vote at the next occurring annual
stockholders’ meeting to increase the number of authorized
Common Stock for purposes of satisfying the issuer’s
obligations to pay deferred Distributions; and
(h) permit the Corporation, at
its option, to provide that if it is involved in an amalgamation,
merger, consolidation, amalgamation, binding share exchange or
conveyance, transfer or lease of assets substantially as an
entirety to any other person or a similar transaction (a “
Business Combination ”) where immediately after the
consummation of the Business Combination more than 50% of the
surviving or resulting entity’s voting shares are owned by
the stockholders of the other party to the Business Combination,
then clauses (a) through (c) of this definition will not
apply to any deferral period that is terminated on the next
Distribution Date following the date of consummation of the
Business Combination;
S-2
provided (and it being understood) that:
(A) the Corporation shall not be
obligated to issue (or use APM Commercially Reasonable Efforts to
issue) APM Qualifying Securities for so long as a Market Disruption
Event has occurred and is continuing;
(B) if, due to a Market Disruption
Event or otherwise, the Corporation is able to raise and apply
some, but not all, of the eligible proceeds necessary to pay all
deferred Distributions on any Distribution Date, the Corporation
will apply any available eligible proceeds to pay accrued and
unpaid Distributions on the applicable Distribution Date in
chronological order subject to the Common Cap, the Share Cap and
the Preferred Cap, as applicable; and
(C) if the Corporation has
outstanding more than one class or series of securities under which
it is obligated to sell a type of APM Qualifying Securities and
apply some part of the proceeds to the payment of deferred
Distributions, then on any date and for any period the amount of
net proceeds received by the Corporation from those sales and
available for payment of deferred Distributions on such securities
shall be applied to such securities on a pro rata basis up to the
Common Cap, the Share Cap and the Preferred Cap, as applicable, in
proportion to the total amounts that are due on such securities, or
on such other basis as an Applicable Governmental Authority may
approve.
“ Amended Declaration
” means the Amended and Restated Declaration of Trust of
MetLife Capital Trust X, dated as of April 8, 2008, among the
Corporation, The Bank of New York Trust Company, N.A., as property
trustee, and BNYM (Delaware), as Delaware trustee.
“ APM Commercially
Reasonable Efforts ” means commercially reasonable
efforts to complete the offer and sale of APM Qualifying Securities
to third parties that are not Subsidiaries of the Corporation in
public offerings or private placements. For the avoidance of doubt,
the Corporation will not be considered to have used APM
Commercially Reasonable Efforts if the Corporation determines to
not pursue or complete such sale due to pricing, coupon, dividend
rate or dilution considerations.
“ APM Qualifying
Securities ” means, with respect to an Alternative
Payment Mechanism or Mandatory Trigger Provision, one or more of
the following (as designated in the transaction documents for the
Qualifying Capital Securities that include an Alternative Payment
Mechanism or a Mandatory Trigger Provision, as applicable):
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(a) |
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Common Stock; |
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(b) |
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Qualifying Warrants; |
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(c) |
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Qualifying Non-Cumulative Perpetual Preferred Stock; or |
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(d) |
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Mandatorily Convertible Preferred Stock; |
provided (and it being understood) that:
S-3
(A) if the APM Qualifying
Securities for any Alternative Payment Mechanism or Mandatory
Trigger Provision include both Common Stock and Qualifying
Warrants,
(i) such Alternative Payment
Mechanism or Mandatory Trigger Provision may permit, but need not
require, the Corporation to issue Qualifying Warrants; and
(ii) the Corporation may, without the
consent of the holders of the Qualifying Capital Securities, amend
the definition of APM Qualifying Securities to eliminate Common
Stock or Qualifying Warrants (but not both) from the definition if,
after the issue date, an accounting standard or interpretive
guidance of an existing accounting standard issued by an
organization or regulator that has responsibility for establishing
or interpreting accounting standards in the United States becomes
effective so that there is more than an insubstantial risk that the
failure to do so would result in a reduction in the
Corporation’s earnings per share as calculated for financial
reporting purposes; and
(B) if the APM Qualifying
Securities for any Alternative Payment Mechanism or Mandatory
Trigger Provision include Mandatorily Convertible Preferred
Stock,
(i) such Alternative Payment
Mechanism or Mandatory Trigger Provision may permit, but need not
require, the Corporation to issue Mandatorily Convertible Preferred
Stock; and
(ii) the Corporation may, without the
consent of the holders of the Qualifying Capital Securities, amend
the definition of APM Qualifying Securities to eliminate
Mandatorily Convertible Preferred Stock from the definition if,
after the issue date, an accounting standard or interpretive
guidance of an existing accounting standard issued by an
organization or regulator that has responsibility for establishing
or interpreting accounting standards in the United States becomes
effective so that there is more than an insubstantial risk that the
failure to do so would result in a reduction in the
Corporation’s earnings per share as calculated for financial
reporting purposes.
“ Applicable Governmental
Authority ” means any regulatory body, administrative
agency, or governmental body having jurisdiction over the
Corporation or any Subsidiary thereof, including, without
limitation, any insurance regulatory authority and the Federal
Reserve Board.
“ Applicable Percentage
” means:
(a) in the case of any Common
Stock or Qualifying Warrants, (i) 133.33% with respect to any
repayment, redemption or purchase prior to April 8, 2038,
(ii) 200% with respect to any repayment, redemption or
purchase on or after April 8, 2038 and prior to April 8,
2048 and (iii) 400% with respect to any repayment, redemption
or purchase on or after April 8, 2048;
(b) in the case of any
Mandatorily Convertible Preferred Stock, Debt Exchangeable for
Common Equity or Debt Exchangeable for Preferred Equity,
(i) 100% with respect to any repayment, redemption or purchase
prior to April 8, 2038, (ii) 150% with respect to any
repayment,
S-4
redemption or purchase on or after April 8, 2038 and prior to
April 8, 2048 and (iii) 300% with respect to any
repayment, redemption or purchase on or after April 8,
2048;
(c) in the case of any
Qualifying Capital Securities described in clause (a) of the
definition of that term, (i) 100% with respect to any
repayment, redemption or purchase prior to April 8, 2038,
(ii) 150% with respect to any repayment, redemption or
purchase on or after April 8, 2038 and prior to April 8,
2048 and (iii) 300% with respect to any repayment, redemption
or purchase on or after April 8, 2048;
(d) in the case of any
Qualifying Capital Securities described in clause (b) of the
definition of that term, (i) 100% with respect to any
repayment, redemption or purchase on or after April 8, 2038
and prior to April 8, 2048 and (ii) 200% with respect to
any repayment, redemption or purchase on or after April 8,
2048; and
(e) in the case of any
Qualifying Capital Securities described in clause (c) of the
definition of that term, 100%.
“ Bankruptcy Claim
Limitation Provision ” means, with respect to any
Qualifying Capital Securities that have an Alternative Payment
Mechanism or a Mandatory Trigger Provision, provisions
that, upon any liquidation, dissolution, winding up or
reorganization or in connection with any insolvency, receivership
or proceeding under any bankruptcy law with respect to the issuer
or the Corporation, limit the claim of the holders of such
securities to Distributions that accumulate during (i) any
deferral period, in the case of securities that have an Alternative
Payment Mechanism or (ii) any period in which the Corporation
fails to satisfy one or more financial tests set forth in the terms
of such securities or related transaction agreements, in the case
of securities that have a Mandatory Trigger Provision, to:
(a) in the case of Qualifying
Capital Securities that have an Alternative Payment Mechanism or
Mandatory Trigger Provision with respect to which the APM
Qualifying Securities do not include Qualifying Non-Cumulative
Perpetual Preferred Stock or Mandatorily Convertible Preferred
Stock, 25% of the stated or principal amount of such Qualifying
Capital Securities then outstanding; and
(b) in the case of any other
Qualifying Capital Securities, an amount not in excess of the sum
of (x) the earliest two years of accumulated and unpaid
Distributions (including compounded amounts thereon) and
(y) an amount equal to the excess, if any, of the Preferred
Cap over the aggregate amount of net proceeds from the sale of
Qualifying Non-Cumulative Perpetual Preferred Stock and Mandatorily
Convertible Preferred Stock that are still outstanding that the
issuer has applied to pay such Distributions pursuant to the
Alternative Payment Mechanism or the Mandatory Trigger Provision;
provided that the holders of such Qualifying Capital
Securities are deemed to agree that, to the extent the claim for
deferred Distributions exceeds the amount set forth in clause (x),
the amount they receive in respect of such excess shall not exceed
the amount they would have received had the claim for such excess
ranked pari passu with the interests of the holders, if any,
of Qualifying Non-Cumulative Perpetual Preferred Stock.
“ Below Investment Grade
Rating Event ” means the Corporation’s senior
unsecured credit rating from each of the Rating Agencies is below
Investment Grade on any date from the date of the public notice of
an arrangement that could result in a Change of Control until the
end of
S-5
the
60-day period following public notice of the occurrence of a Change
of Control (which period shall be extended so long as the senior
unsecured credit rating of the Corporation is under publicly
announced consideration for possi
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