Exhibit 4b


 


Replacement Capital Covenant, dated June 27,
2008 (this “Replacement Capital Covenant”), by
Constellation Energy Group, Inc., a Maryland 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, the Corporation is issuing $450,000,000
aggregate principal amount of its Series A Junior Subordinated Debentures
(including any such junior subordinated debentures issued after the date hereof
that may be consolidated and form a single series with such junior subordinated
debentures issued on the date hereof, the “Subordinated Debentures”),
which Subordinated Debentures were issued pursuant to the Indenture, dated as
of July 24, 2006, between the Corporation and Deutsche Bank Trust Company
Americas, as trustee, as supplemented by the Supplemental Indenture (the “Indenture”).


 


B.                                     This
Replacement Capital Covenant is the “Replacement Capital Covenant” referred to
in the Prospectus Supplement, dated June 20, 2008, relating to the
Subordinated Debentures which supplements the Corporation’s Prospectus, dated July 24,
2006.


 


C.                                     The Corporation, in entering into and disclosing the content
of this Replacement Capital Covenant in the manner provided below, is doing so
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.


 


SECTION 1.                                Definitions. 
Capitalized terms used in this Replacement Capital Covenant (including
the Recitals) have the meanings set forth in Schedule I hereto.


 


SECTION 2.                                Limitations on Redemption,
Defeasance or Purchase of Subordinated Debentures. 
The Corporation hereby promises and covenants to and for the benefit of
each Covered Debtholder that the Corporation shall not redeem or purchase, or
satisfy, discharge or defease any portion of the principal amount of the
Subordinated Debentures through the deposit of money, as contemplated by Article XIII
of the Indenture (such satisfaction, discharge or defeasance herein referred to
as “defeasance”) and the Corporation shall
cause its majority-owned Subsidiaries not to purchase, all or any part of the
Subordinated Debentures on or before the Termination Date except to the extent
that:


 





















 


(a)                                  the principal amount defeased or the
applicable redemption or purchase price does not exceed the sum of the
following amounts raised through the issuance of Replacement Capital
Securities:


 


(i) Applicable Percentage of (A) the aggregate amount of the
net cash proceeds received by the Corporation and its Subsidiaries from the
sale of Common Stock and Rights to acquire Common Stock, and (B) the
Market Value of any Common Stock that the Corporation or its Subsidiaries have (X) delivered
to persons other than the Corporation and its Subsidiaries as consideration for
property or assets in an arm’s-length transaction or (Y) issued to Persons
other than the Corporation or its Subsidiaries in connection with the
conversion into or exchange for Common Stock of any convertible or exchangeable
securities, other than, in the case of (Y), convertible or exchangeable securities
for which the Corporation or any of its Subsidiaries has received equity credit
from any NRSRO; plus


 


(ii) Applicable Percentage of the aggregate amount of
net cash proceeds received by the Corporation and its Subsidiaries from the sale of Replacement
Capital Securities (other
than the securities set forth in clause (i) above);


 


in each case, to Persons
other than the Corporation and its Subsidiaries within the applicable
Measurement Period (without double counting proceeds received in any prior Measurement
Period); provided that the limitations in this Section 2 shall not
restrict the repayment, redemption or other acquisition of any Subordinated
Debentures that have been previously defeased or purchased in accordance with
this Replacement Capital Covenant; or


 


(b)                                 the Subordinated Debentures are exchanged
for consideration that includes an aggregate principal amount or liquidation
preference (or, in the case of Common Stock, Market Value) of Replacement
Capital Securities equal to 100% prior to the Stepdown Date and 50% on or after
the Stepdown Date (or, in the case of Common Stock, 50% prior to the Stepdown
Date and 25% on or after the Stepdown Date) of the aggregate principal amount
of Subordinated Debentures that are exchanged.


 


SECTION 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 the related 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;


 


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(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 a specific 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 commencing on the related Redesignation Date;


 


(iv)                              the series of outstanding long-term
indebtedness for money borrowed that is determined to be the Covered Debt
pursuant to clause (ii) or (iii) above 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 the Covered Debt, notice shall be given as provided for in Section 3(d) within
the time frame provided for in such section.


 


(c)                                  Notwithstanding any other provisions of
this Replacement Capital Covenant, if a series of Eligible Senior Debt of the
Corporation is the Covered Debt, on the date on which the Corporation issues a
new series of Eligible Subordinated Debt, then immediately upon such issuance
such series shall become the Covered Debt and the applicable series of Eligible
Senior Debt shall cease to be the Covered Debt.


 


(d)                                 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, (A) notice shall be given to the
Holders of the Initial Covered Debt, in the manner provided in the indenture or
other instrument under which such Initial Covered Debt was issued, of this
Replacement Capital Covenant and the rights granted to such Holders hereunder
and (B) the Corporation shall file a copy of this Replacement Capital
Covenant with the Commission as an exhibit to a Form 8-K; (ii) so
long as the Corporation is a reporting company under the Securities Exchange
Act, the Corporation will include in each Form 10-K filed with the
Commission 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 Form 10-K is filed with the Commission; (iii) if
a series of the Corporation’s long-term indebtedness for money borrowed (1) becomes
Covered Debt or (2) ceases to be Covered Debt, notice of such occurrence
will be given within 30 days to the holders of such long-term indebtedness for
money borrowed in the manner provided for in the indenture or other instrument
under which such long-term indebtedness for money borrowed was issued and the
Corporation shall report such change in a Form 8-K, which must include or
incorporate by reference this Replacement Capital Covenant, and also in the
next Form 10-Q or Form 10-K, as applicable, of the Corporation; (iv) upon
succession of any new entity as the Corporation hereunder as a result of a
merger, consolidation, statutory share exchange, sale, lease or transfer of all
or substantially all of the assets or other business combination of the
Corporation as it existed prior thereto, notice of such occurrence shall be
given within 30 days to the holders of the Covered Debt in the manner
provided for in the indenture or other instrument under which such long-term
indebtedness for money borrowed was issued, and the Corporation 


 


3





















 


shall report such change in a Form 8-K, which
must include or incorporate by reference this Replacement Capital Covenant, and
also in the next Form 10-Q or Form 10-K, as applicable, of the
Corporation; (v) if, and only if, the Corporation ceases to be a reporting
company under the Securities Exchange Act, the Corporation will (A) post
on its website (or on any other similar electronic platform generally available
to the public) the information otherwise required to be included in Securities
Exchange Act filings pursuant to clauses (ii), (iii) and (iv) above;
and (B) cause a notice of this Replacement Capital Covenant to be posted
on the Bloomberg screen for the Initial Covered Debt or any successor Bloomberg
screen or, if none, a similar third-party vendor’s screen the Corporation
reasonably believes is appropriate (each an “Investor Screen”)
and cause a hyperlink 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 (vi) promptly upon the request of any Holder of Covered Debt, such
Holder will be provided with a conformed copy of this Replacement Capital
Covenant.


 


SECTION 4.                                Termination and Amendment.  (a) 
The obligations of the Corporation pursuant to this Replacement Capital Covenant
shall remain in full force and effect until the earliest date (the “Termination Date”) to occur of (i) (x) June 15,
2033 or (y) if the maturity date of the Subordinated Debentures shall be
extended in accordance with the Supplemental Indenture, the date which is 30
years prior to the maturity date, as extended, or if earlier, the date on which
the Subordinated Debentures are otherwise paid, redeemed, defeased or purchased
in full (in compliance with the terms of Section 2 of this Replacement
Capital Covenant), (ii) the date, if any, on which the Holders of at least
a majority of the outstanding principal amount of the then-effective Covered
Debt consent or agree in writing to the termination of the obligations of the
Corporation hereunder, (iii) the date on which the Corporation has no
Eligible Senior Debt or Eligible Subordinated Debt (in each case without giving
effect to the rating requirement in clause (ii) of the definition of each
such term) and (iv) the date on which the Subordinated Debentures are
accelerated as a result of an event of default under the Indenture.  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 with respect to the Holders, or
otherwise.


 


(b)                                 This Replacement Capital Covenant may be
amended or supplemented from time to time by a written instrument signed only
by the Corporation with the consent of the Holders of at least a majority of
the outstanding principal amount of the then-effective Covered Debt, provided
that this Replacement Capital Covenant may be amended or supplemented from time
to time by a written instrument signed by the Corporation (and without the
consent of the Holders) if any of the following apply: (i) such amendment
or supplement eliminates Common Stock, Rights to acquire Common Stock, Common
Equity Units and/or Mandatorily Convertible Preferred Stock as Replacement
Capital Securities, if, in the case of this clause, 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 the failure to eliminate Common Stock, Rights to acquire Common
Stock, Common Equity Units and/or Mandatorily Convertible Preferred Stock as
Replacement Capital Securities would result in a reduction in the Corporation’s
earnings per share as calculated in accordance with generally accepted
accounting principles in the United 


 


4





















 


States (“EPS”), or the
Corporation otherwise has been advised in writing by a nationally recognized
independent accounting firm that there is more than an insubstantial risk that
the failure to eliminate such securities as Replacement Capital Securities
would result in a reduction of the Corporation’s EPS, (ii) the effect of
such amendment or supplement is solely to impose additional restrictions on the
ability of the Corporation to redeem, purchase or defease Subordinated
Debentures or any majority-owned Subsidiary of the Corporation to purchase
Subordinated Debentures, or to impose additional restrictions on, or to
eliminate certain of, the types of securities qualifying as Replacement Capital
Securities (other than securities which are covered by clause (i) above),
and an officer of the Corporation has delivered to the Holders of the
then-effective Covered Debt in the manner provided for in the indenture or
other instrument under which such long-term indebtedness for money borrowed was
issued a written certificate to that effect, (iii) such amendment or
supplement extends the date specified in Section 4(a)(i), the Stepdown
Date, or both or (iv) such amendment or supplement is not adverse to the
rights of the Holders of the then-effective Covered Debt and an officer of the
Corporation has delivered to the Holders of the then-effective Covered Debt in
the manner provided for in the indenture or other instrument under which such
long-term indebtedness for money borrowed was issued a written certificate
stating that, in his or her determination, such amendment or supplement is not
adverse to the rights of the Holders of the then-effective Covered Debt.  For the avoidance of doubt, an amendment or
supplement that adds new types of Replacement Capital Securities or modifies
the requirements of the Replacement Capital Securities described herein would
not be adverse to the rights of the Holders of Covered Debt if, following such
amendment or supplement, this Replacement Capital Covenant would satisfy the
definition of Explicit Replacement Covenant.


 


(c)                                  For purposes of Sections 4(a) and
4(b), the Holders whose consent or agreement is required to terminate, amend or
supplement this Replacement Capital Covenant or the obligations of the
Corporation hereunder 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.


 


SECTION 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 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 by reason of such series of long-term indebtedness for money borrowed
no longer being Covered Debt).  The
Corporation agrees that, if at any time the Covered Debt is held by a trust
(for example, where the Covered Debt is part of an issuance of trust preferred
securities), a holder of the securities issued by such trust may enforce
(including by instituting legal proceedings) this Replacement Capital Covenant
directly against the Corporation as though such holder owned the Covered 


 


5





















 


Debt directly, and the holders of such trust
securities shall be deemed Holders of Covered Debt for purposes of this
Replacement Capital Covenant for so long as the indebtedness held by such trust
remains Covered Debt hereunder. Other than the Covered Debtholders as provided
in the two previous sentences, no other Person shall have any rights under this
Replacement Capital Covenant or be deemed a third party beneficiary of this
Replacement Capital Covenant.  In
particular, no holder of the Subordinated Debentures is a third party
beneficiary of this Replacement Capital Covenant, it being understood that such
holders may have rights under the Indenture.


 


(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) or (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), and in each case to the
Corporation at the address set forth below, or at such other address as may
thereafter be listed as the principal executive offices of the Corporation in
the then most recently filed Form 10-K or Form 10-Q of the
Corporation or as may thereafter be posted on the Corporation’s website as the
address for notices under this Replacement Capital Covenant:


 


Constellation Energy Group, Inc.


Attention:  Treasurer


750 East Pratt Street


Baltimore, Maryland 21202


 


6

















 


IN WITNESS WHEREOF, the
Corporation has caused this Replacement Capital Covenant to be executed by a
duly authorized officer as of the day and year first above written.


 


	
   

  	
  CONSTELLATION
  ENERGY GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
           /s/
  John R. Collins

  
	
   

  	
   

  	
  Name: 

  	
  John R. Collins

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice President and 

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  



 


7
















 


Schedule I


 


Definitions


 


“Alternative Payment Mechanism”
means, with respect to any Qualifying Capital Securities, provisions in the
related transaction documents that permit the issuer, in its sole discretion,
to defer or skip Distributions in whole or in part on such Qualifying Capital
Securities for one or more consecutive Distribution Periods of up to ten years
and that require the issuer thereof to issue (or use Commercially Reasonable
Efforts to issue), in its sole discretion, one or more types of APM Qualifying
Securities raising “eligible proceeds” (as defined in (a) below) at least
equal to the deferred Distributions on such Qualifying Capital Securities and
apply the proceeds to pay unpaid Distributions on such Qualifying Capital
Securities, commencing on the earlier of (x) the first Distribution Date
after commencement of a deferral period on which such issuer pays current
Distributions on such Qualifying Capital 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 issuer or its Subsidiaries as consideration for
such securities) that such issuer has received during the 180 days prior to the
related Distribution Date from the issuance of APM Qualifying Securities to
Persons other than the Corporation and its Subsidiaries, up to the Preferred
Cap (as defined in (e) below) in the case of APM Qualifying Securities
that are Qualifying Preferred Stock or Mandatorily Convertible Preferred Stock;


 


(b)           permit
such issuer to pay current Distributions on any Distribution Date out of any
source of funds but (x) require such issuer to pay deferred Distributions
only out of eligible proceeds and (y) prohibit such issuer from paying deferred
Distributions out of any source of funds other than eligible proceeds;


 


(c)           if
deferral of Distributions continues for more than one year (or such shorter
period as may be provided for in the terms of such securities), require such
issuer or any of its Subsidiaries not to redeem or purchase any securities that
rank pari passu with or junior to any APM Qualifying Securities that such
issuer has issued to settle deferred Distributions in respect to that deferral
period until at least one year after all deferred Distributions have been paid
(a “Purchase Restriction”), other
than the following (none of which shall be restricted or prohibited by a
Purchase Restriction):


 


(i)            purchases,
redemptions or other acquisitions of shares of Common Stock in connection with
any employment or compensatory contract, compensation or benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors
or consultants; or


 


(ii)           purchases
of shares of Common Stock pursuant to a contractually binding requirement to
buy shares of Common Stock entered into prior to the beginning of the related
deferral period, including under a contractually binding stock repurchase plan;


 


(d)           limit the
obligation of such issuer to issue (or use Commercially Reasonable Efforts to
issue) APM Qualifying Securities that are Common Stock or Qualifying Warrants, 


 


I-1

















 


either
(i) during the first five years of any deferral period or (ii) with
respect to deferred Distributions attributable to the first five years of any
deferral period (provided that such limitation shall not apply after the ninth
anniversary of the commencement of any deferral period), to a number of shares
of Common Stock and Rights to acquire Common Stock which does not, in the
aggregate, exceed 2% of the outstanding number of shares of such issuer’s
Common Stock, in each case as of the date of the Corporation’s most recent
publicly available consolidated financial statements at the time of such issuance
(the “Common Cap”);


 


(e)           limit the
right of such issuer to issue APM Qualifying Securities that are Qualifying
Preferred Stock or Mandatorily Convertible Preferred Stock, to an amount from
the issuance of such Qualifying Preferred Stock and then-still outstanding
Mandatorily Convertible Preferred Stock pursuant to the related Alternative
Payment Mechanism (including, in the case of Qualifying Preferred Stock, at any
point in time from all prior issuances thereof pursuant to such Alternative
Payment Mechanism) equal to 25% of the initial liquidation or principal amount
of the Qualifying Capital Securities that are the subject of the related
Alternative Payment Mechanism (the “Preferred
Cap”);


 


(f)            in the
case of Qualifying Capital Securities include a Bankruptcy Claim Limitation
Provision; and


 


(g)           permit the
Corporation, at its option, to provide that if the Corporation is involved in a
merger, consolidation, amalgamation, statutory 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 voting securities of the surviving
entity of the business combination, or the entity to whom all or substantially
all of the Corporation’s assets are conveyed, transferred or leased, is owned
by the equityholders of the other party to the business combination, then
clauses (a), (b) and (c) above will not apply to any deferral period
that is terminated on the next Distribution Date following the date of
consummation of the business combination;


 


provided (and it being
understood) that:


 


(h)           the
Alternative Payment Mechanism may at the discretion of such issuer include a
share cap limiting the issuance of APM Qualifying Securities consisting of
Common Stock, Qualifying Warrants and Mandatorily Convertible Preferred Stock,
in each case to a maximum issuance cap to be set at the discretion of such
issuer (a “Share Cap”); provided
that such Share Cap will be subject to such issuer’s agreement to use
Commercially Reasonable Efforts to increase the Share Cap when reached and
(i) only to the extent 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 such issuer cannot increase the Share Cap as contemplated in the
preceding clause, by requesting its board of directors to adopt a resolution
for shareholder vote at the next occurring annual shareholders meeting to
increase the number of shares of such issuer’s authorized Common Stock for
purposes of satisfying its obligations to pay deferred Distributions;


 


I-2

















 


(i)            such
issuer shall not be obligated to issue (or use Commercially Reasonable Efforts
to issue) APM Qualifying Securities for so long as a Market Disruption Event
has occurred and is continuing;


 


(j)            if, due
to a Market Disruption Event or otherwise, such issuer is able to raise and
apply some, but not all, of the eligible proceeds necessary to pay all deferred
Distributions on any Distribution Date, such issuer 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
Preferred Cap, and the Share Cap (if any), as applicable; and


 


(k)           if such
issuer 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 such issuer 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 Preferred Cap and the Share Cap (if any), as applicable, in proportion to
the total amounts that are due on such securities.


 


“APM Qualifying
Securities” means, with respect to any Alternative Payment
Mechanism, any Debt Exchangeable for Preferred Equity or any Mandatory Trigger
Provision, one or more of the following (as designated in the transaction
documents for any Qualifying Capital Securities that include an Alternative
Payment Mechanism or a Mandatory Trigger Provision or for any Debt Exchangeable
for Preferred Equity):


 


(a)           Common
Stock;


 


(b)           Qualifying
Warrants;


 


(c)           Qualifying
Preferred Stock; and


 


(d)           Mandatorily
Convertible Preferred Stock


 


provided that if the APM Qualifying Securities for any
Alternative Payment Mechanism, any Debt Exchangeable for Preferred Equity or
any Mandatory Trigger Provision include both Common Stock and Qualifying
Warrants, such Alternative Payment Mechanism, Debt Exchangeable for Preferred
Equity or Mandatory Trigger Provision may permit, but need not require, the
Corporation to issue Qualifying Warrants.


 


“Applicable Percentage”
means:


 


(i)            with
respect to Common Stock, Rights to acquire Common Stock and Mandatorily
Convertible Preferred Stock, 200% prior to the Stepdown Date and 400% on or
after the Stepdown Date;


 


(ii)           (a) with
respect to Qualifying Capital Securities described in clause (a) of the
definition of that term, 100% prior to the Stepdown Date and 200% on or after
the Stepdown Date and (b) with respect to Qualifying Capital Securities
described in clause (b) of the definition of that term, 100%; and


 


I-3

















 


(iii)          with
respect to Debt Exchangeable for Equity, 150% prior to the Stepdown Date and
300% on or after the Stepdown Date.


 


“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, limit the claim of the
holders of such Qualifying Capital Securities to Distributions that accumulate
during (a) any deferral period, in the case of Qualifying Capital
Securities that have an Alternative Payment Mechanism or (b) any period in
which the issuer fails to satisfy one or more financial tests set forth in the
terms of such securities or related transaction agreements, in the case of
Qualifying Capital Securities having a Mandatory Trigger Provision, to:


 


(i)            in the
case of Qualifying Capital Securities having an Alternative Payment Mechanism
or Mandatory Trigger Provision with respect to which the APM Qualifying
Securities do not include Qualifying Preferred Stock or Mandatorily Convertible
Preferred Stock, 25% of the stated or principal amount of such Qualifying
Capital Securities then outstanding; and


 


(ii)           in the
case of any other Qualifying Capital Securities, an amount not in excess of the
sum of (x) the amount of accumulated and unpaid Distributions (including
compounded amounts) that relate to the earliest two years of the portion of the
deferral period for which Distributions have not been paid 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 Preferred Stock or
Mandatorily Convertible Preferred Stock 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 remaining claim exceeds
the amount set forth in subclause (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 Preferred Stock or Mandatorily Convertible Preferred Stock.


 


“Board of Directors”
means the Board of Directors of the Corporation or a duly constituted committee
thereof.


 


“Business Day”
means each day other than (i) a Saturday or Sunday or (ii) a day on
which banking institutions in The City of New York are authorized or obligated
by law, regulation or executive order to close.


 


“Commercially Reasonable Efforts”
means, for purposes of selling APM Qualifying Securities, commercially
reasonable efforts to complete the offer and sale of APM Qualifying Securities
to third parties that are not the Corporation or any of its Subsidiaries in
public offerings or private placements. 
The issuer of APM Qualifying Securities shall not be considered to have
made Commercially Reasonable Efforts to effect a sale of APM Qualifying
Securities if it determines not to pursue or complete such sale due to pricing,
coupon, dividend rate or dilution considerations.


 


“Commission” means
the United States Securities and Exchange Commission.


 


I-4

















 


“Common Cap”
has the meaning specified in the definition of Alternative Payment Mechanism.


 


“Common Equity Units”
means a security or combination of securities that


 


(i) gives the
holders (a) a beneficial interest in a fixed income security of the
Corporation (including a debt security, a trust preferred security of a
subsidiary trust or preferred stock) and (b) a beneficial interest in a
stock purchase contract that obligates the holder to acquire shares of Common
Stock to be within a range established at the time of issuance of the Common
Equity Units subject to customary anti-dilution adjustments;


 


(ii) provides that
the holders directly or indirectly grant the Corporation a security interest in
such fixed income securities and their proceeds (including any substitute
collateral permitted under the transaction documents) to secure the holders’
direct or indirect obligation to purchase Common Stock pursuant to such stock
purchase contracts;


 


(iii) includes a
remarketing feature pursuant to which the fixed income security is required to
be remarketed to new investors commencing not later than the first Distribution
Date that is at least three years after the issuance of the security; and


 


(iv) provides for
the proceeds raised in the remarketing to be used to purchase Common Stock
pursuant to the stock purchase contracts, and, if there has not been a
successful remarketing by the first Distribution Date that is one year after
the earliest scheduled settlement date of the stock purchase contracts,
provides that the stock purchase contract will be settled by the Corporation
exercising its remedies as a secured party with respect to the fixed income
securities or other collateral directly or indirectly pledged by the holders.


 


“Common Stock”
means common stock of the Corporation (including common stock issued pursuant
to a stock purchase plan or employee benefit plan).


 


“Corporation” has
the meaning specified in the introduction to this instrument.


 


“Covered Debt”
means (i) at the date of this Replacement Capital Covenant and continuing
to but not including the first Redesignation Date, the Initial Covered Debt and
(ii) thereafter, commencing with each Redesignation Date and continuing to
but not including the next succeeding Redesignation Date, the Eligible Debt
identified pursuant to Section 3(b) as the Covered Debt for such
period.


 


“Covered Debtholder”
means each Person (whether a Holder or a beneficial owner holding through a
participant in a clearing agency) that buys, holds or sells long-term
indebtedness for money borrowed of the Corporation during the period that such
long-term indebtedness for money borrowed is Covered Debt, provided that a
Person who has sold all its right, title and interest in Covered Debt shall
cease to be a Covered Debtholder at the time of such sale if, at such time, the
Corporation has not breached or repudiated, or threatened to breach or
repudiate, its obligations hereunder.


 


I-5

















 


“Debt Exchangeable for Equity”
means Common Equity Units or Debt Exchangeable for Preferred Equity.


 


“Debt Exchangeable
for Preferred Equity” means a security or combination of securities
(together in this definition, “such
securities”) that:


 


(a)           gives the
holder a beneficial interest in (i) subordinated debt securities of the
Corporation (in this definition, the “issuer”),
permitting the issuer to defer Distributions in whole or in part on such
securities for one or more Distribution Periods of up to at least seven years
without any remedies other than Permitted Remedies and that are the most junior
subordinated debt of the issuer (or rank pari passu with the most junior
subordinated debt of the issuer) (in this definition, “subordinated debt”) and (ii) a
fractional interest in a stock purchase contract for a share or shares of
Qualifying Preferred Stock of the Corporation that ranks pari passu with or
junior to all other preferred stock of the Corporation (in this definition, “preferred stock”);


 


(b)           provides
that the holders directly or indirectly grant to the Corporation a security
interest in such subordinated debt and their proceeds (including any substitute
collateral permitted under the transaction documents) to secure the holders’
direct or indirect obligation to purchase preferred stock of the Corporation
pursuant to such stock purchase contracts;


 


(c)           includes a
remarketing feature pursuant to which the subordinated debt of the issuer is
remarketed to new investors commencing not later than the first Distribution
Date that is at least five years after the date of issuance of such securities
or earlier in the event of an early settlement event based on: (i) the
dissolution of the issuer of such securities or (ii) one or more financial
tests set forth in the terms of the instrument governing such securities;


 


(d)           provides
for the proceeds raised in the remarketing of the subordinated debt to be used
to purchase preferred stock of the Corporation under the stock purchase
contracts and, if there has not been a successful remarketing by the first
Distribution Date that is six years after the date of issuance of such
securities, provides that the stock purchase contracts will be settled by the
Corporation exercising its remedies as a secured party with respect to its
subordinated debt or other collateral directly or indirectly pledged by the
holders of such securities;


 


(e)           is subject
to an Explicit Replacement Covenant that will apply to such securities and
preferred stock of the Corporation and will not include Debt Exchangeable for
Equity as a Replacement Capital Security; and


 


(f)            if
applicable, after the issuance of such preferred stock of the Corporation,
provides the holders of such securities with a beneficial interest in such
preferred stock of the Corporation.


 


“Defeasance” has
the meaning specified in Section 2.


 


“Distribution Date”
means, as to any security or combination of securities, the dates on which
periodic Distributions on such securities are scheduled to be made.


 


I-6

















 


“Distribution Period”
means, as to any security or combination of securities, each period from and
including a Distribution Date for such securities to but not including the next
succeeding Distribution Date for such securities.


 


“Distributions”
means, as to a security or combination of securities, dividends, interest
payments or other income distributions to the holders thereof that are not
Subsidiaries of the Corporation.


 


“Eligible Debt”
means, at any time, Eligible Subordinated Debt or, if no Eligible Subordinated
Debt is then outstanding, Eligible Senior Debt. 
The Subordinated Debentures shall not be considered “Eligible Debt” for
purposes of this Replacement Capital Covenant.


 


“Eligible Senior Debt”
means, at any time in respect of any issuer, each series of the issuer’s then
outstanding unsecured long-term indebtedness for money borrowed that
(i) upon a bankruptcy, liquidation, dissolution or winding up of the
issuer, ranks most senior among the issuer’s then outstanding classes of
unsecured indebtedness for money borrowed, (ii) is then assigned a rating
by at least one NRSRO (provided that this clause (ii) shall apply on a
Redesignation Date only if on such date the issuer has outstanding senior
long-term indebtedness for money borrowed that satisfies the requirements of
clauses (i), (iii) and (iv) that is then assigned a rating by at
least one NRSRO), (iii) has an outstanding principal amount of not less
than $100,000,000, and (iv) was issued through or with the assistance of a
commercial or investment banking firm or firms acting as underwriters, initial
purchasers or placement or distribution agents. 
For purposes of this definition as applied to securities with a CUSIP
number, each issuance of long-term indebtedness for money borrowed that has
(or, if such indebtedness is held by a trust or other intermediate entity
established directly or indirectly by the issuer, the securities of such
intermediate entity that have) a separate CUSIP number shall be deemed to be a
series of the issuer’s long-term indebtedness for money borrowed that is
separate from each other series of such indebtedness.


 


“Eligible Subordinated Debt”
means, at any time in respect of any issuer, each series of the issuer’s then
outstanding unsecured long-term indebtedness for money borrowed that
(i) upon a bankruptcy, liquidation, dissolution or winding up of the
issuer, ranks senior to the Subordinated Debentures (or any guarantee thereof)
and subordinate to the issuer’s then outstanding series of unsecured
indebtedness for money borrowed that ranks most senior, (ii) is then
assigned a rating by at least one NRSRO (provided that this clause
(ii) shall apply on a Redesignation Date only if on such date the issuer
has outstanding subordinated long-term indebtedness for money borrowed that
satisfies the requirements of clauses (i), (iii) and (iv) that is
then assigned a rating by at least one NRSRO), (iii) has an outstanding
principal amount of not less than $100,000,000, and (iv) was issued
through or with the assistance of a commercial or investment banking firm or
firms acting as underwriters, initial purchasers or placement or distribution
agents.  For purposes of this definition
as applied to securities with a CUSIP number, each issuance of long-term indebtedness
for money borrowed that has (or, if such indebtedness is held by a trust or
other intermediate entity established directly or indirectly by the issuer, the
securities of such intermediate entity have) a separate CUSIP number shall be
deemed to be a series of the issuer’s long-term indebtedness for money borrowed
that is separate from each other series of such indebtedness.


 


I-7

















 


“Explicit Replacement Covenant”
means, as to any security or combination of securities, that the issuer has
made a covenant substantially similar to this Replacement Capital Covenant or a
replacement capital covenant, as identified by the Board of Directors acting in
good faith and in their reasonable discretion and reasonably construing the
definitions and other terms of this Replacement Capital Covenant to the effect
that the issuer will redeem, defease or purchase, and any Subsidiaries of the
issuer will purchase, such securities only if and to the extent that the
applicable percentage of the net proceeds raised through the issuance of
specified replacement capital securities that have terms and provisions at the
time of redemption, defeasance or purchase that are as much or more equity-like
than the securities then being redeemed, defeased or purchased, raised within
180 days prior to the applicable redemption, defeasance or purchase date,
and that the board of directors of the issuer has determined that such covenant
is binding on the issuer for the benefit of one or more series of the long-term
indebtedness for money borrowed of the issuer to the same extent as this
Replacement Capital Covenant is binding on the Corporation for the benefit of
the Holders of the Initial Covered Debt.


 


“Form 8-K”
means a Current Report on Form 8-K filed with the Commission under the
Securities Exchange Act, and any successor report.


 


“Form 10-K”
means an Annual Report on Form 10-K filed with the Commission under the
Securities Exchange Act, and any successor report.


 


“Form 10-Q”
means a Quarterly Report on Form 10-Q filed with the Commission under the
Securities Exchange Act, and any successor report.


 


“Holder” means, as
to the Covered Debt then in effect, each holder of such Covered Debt as
reflected on the securities register maintained by or on behalf of the
Corporation with respect to such Covered Debt.


 


“Indenture” has
the meaning specified in Recital A.


 


“Initial Covered Debt”
means the Corporation’s 7.60% Notes due April 1, 2032 (CUSIP
No. 210371 AF7).


 


“Intent-Based Replacement
Disclosure” means, as to any security or combination of
securities issued, directly or indirectly, that the issuer has publicly stated
its intention, either in the prospectus or other offering document under which
such security or combination of securities were initially offered for sale or
in filings with the Commission made by the issuer or an affiliate under the
Securities Exchange Act prior to or contemporaneously with the issuance of such
securities, that the issuer will redeem, purchase or defease, or its Subsidiaries
will purchase, such securities only with the applicable percentage of the net
proceeds raised through the issuance of specified replacement capital
securities that have terms and provisions at the time of redemption, defeasance
or purchase that are as much or more equity-like than the securities then being
redeemed, defeased or purchased, issued within 180 days prior to the
applicable redemption, purchase or defeasance date.


 


“Investor Screen”
has the meaning specified in Section 3(d).


 


I-8
















 


“Mandatorily Convertible Preferred Stock” means cumulative preferred stock or
Non-Cumulative Preferred Stock of the Corporation with (a) no prepayment
obligation on the part of the issuer thereof, whether at the election of the
holders or otherwise, and (b) a requirement that the preferred stock
convert into Common Stock of the issuer within three years from the date of its
issuance for a determinable number of shares or within a range established at
the time of issuance of the preferred stock or the Non-Cumulative Preferred
Stock, subject to customary anti-dilution adjustments.


 


“Mandatory Trigger
Provision” means, as to any security or combination of securities,
provisions in the terms thereof or in the related transaction agreements that (A) require,
or at its option in the case of perpetual Non-Cumulative Preferred Stock
permit, the issuer of such security or combination of securities to make
payment of Distributions on such securities only in connection with the
issuance and sale of APM Qualifying Securities, within two years of a failure to satisfy one or more financial tests
set forth in the terms of such securities or related transaction agreements
(for the avoidance of doubt, payment of such Distributions with cash from any
source other than APM Qualifying Securities is not permitted within such
two-year period immediately following the failure of the issuer to satisfy such
financial test(s)), in an amount such that the net proceeds of such sale at
least equal the amount of unpaid Distributions on such securities (including
without limitation all deferred and accumulated amounts) and in either case
requires the application of the net proceeds of such sale to pay such unpaid
Distributions; provided that (i) such
Mandatory Trigger Provision shall limit the issuance and sale of Common Stock
and Qualifying Warrants the proceeds of which may be applied to pay such
Distributions pursuant to such provision to the Common Cap, unless the
Mandatory Trigger Provision requires such issuance and sale within one year of
such failure, and (ii) the amount of Qualifying Preferred Stock and still
outstanding Mandatorily Convertible Preferred Stock the net proceeds of which
the issuer may apply to pay such Distributions pursuant to such provision may
not exceed the Preferred Cap, (B) in the case of securities other than
perpetual Non-Cumulative Preferred Stock, prohibit the issuer from purchasing
any APM Qualifying Securities, or any securities that rank pari passu with or
junior to APM Qualifying Securities, the proceeds of which were used to settle
deferred interest during the relevant deferral period prior to the date six
months after the issuer applies the net proceeds of the sales described in
clause (A) to pay such unpaid Distributions in full, (C) in the case
of securities other than perpetual Non-Cumulative Preferred Stock, include a
Bankruptcy Claim Limitation Provision and (D) if deferral of Distributions
continues for more than one year (or such shorter period as may be provided for
in the terms of such securities), prohibit the issuer of such securities from
redeeming or purchasing any of its securities ranking upon the liquidation,
dissolution or winding up of the issuer junior to or pari passu with any APM
Qualifying Securities the proceeds of which were used to settle deferred
Distributions during the relevant deferral period until at least one year after
all deferred Distributions have been paid. 
For purposes of this definition of Mandatory Trigger Provision, (a) the
issuer will not be obligated to issue (or use Commercially Reasonable Efforts
to issue) any such 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 issuer 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 issuer 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 Preferred Cap and the Share
Cap (if any), as applicable; and (c) if the issuer has outstanding more
than one class or series of securities under which it is obligated to sell a 


 


I-9

















 


type of any such APM
Qualifying Securities and applies 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 issuer 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 Preferred Cap and the Share Cap (if any), as
applicable, in proportion to the total amounts that are due on such securities.  No remedy other than Permitted Remedies will
arise by the terms of such securities or related transaction agreements in
favor of the holders of such securities as a result of the issuer’s failure to
pay Distributions because of the Mandatory Trigger Provision or as a result of
the issuer’s exercise of its right under an Optional Deferral Provision until
Distributions have been deferred for one or more Distribution Periods that
total together at least ten years.


 


“Market Disruption Event” means the occurrence or existence of any
of the following events or sets of circumstances:


 


(i)                                     trading in securities generally, or in
the securities of the issuer (or any Subsidiary of the issuer that may issue
securities in settlement of an Alternative Payment Mechanism) specifically, on
The New York Stock Exchange or any other national securities exchange or
over-the-counter market on which such securities are then listed or traded
shall have been suspended or the settlement of such trading generally shall
have been materially disrupted or minimum prices shall have been established on
any such exchange or market by the Commission, by the relevant exchange or by
any other regulatory body or governmental body having jurisdiction, and the
establishment of such minimum prices materially disrupts or otherwise has a
material adverse effect on trading in, or the issuance and sale of, such
securities;


 


(ii)                                  the issuer (or a Subsidiary as specified
in clause (i)) would be required to obtain the consent or approval of its
shareholders (or the shareholders of a Subsidiary as specified in clause (i))
or a regulatory body (including, without limitation, any securities exchange)
or governmental authority to issue APM Qualifying Securities or Qualifying
Capital Securities and the issuer (or a Subsidiary as specified in clause (i))
fails to obtain that consent or approval notwithstanding the commercially
reasonable efforts of the issuer (or such Subsidiary) to obtain that consent or
approval or a regulatory authority instructs the issuer (or a Subsidiary as
specified in clause (i)) not to sell or offer for sale such securities;


 


(iii)                               a banking moratorium shall have been declared by the
federal or state authorities of the United States and such moratorium
materially disrupts or otherwise has a material adverse effect on trading in,
or the issuance and sale of, APM Qualifying Securities or Qualifying Capital
Securities;


 


(iv)                              a material disruption shall have occurred
in commercial banking or securities settlement or clearance services in the United
States and such disruption materially disrupts or otherwise has a material
adverse effect on trading in, or the issuance and sale of, APM Qualifying
Securities or Qualifying Capital Securities;


 


(v)                                 the United States shall have become
engaged in hostilities, there shall have been an escalation in hostilities
involving the United States, there shall have been a 


 


I-10

















 


declaration of a national
emergency or war by the United States or there shall have occurred any other
national or international calamity or crisis and such event materially disrupts
or otherwise has a material adverse effect on trading in, or the issuance and
sale of, APM Qualifying Securities;


 


(vi)                              there shall have occurred such a material
adverse change in general domestic or international economic, political or
financial conditions, including without limitation as a result of terrorist
activities, and such change materially disrupts or otherwise has a material
adverse effect on trading in, or the issuance and sale of, APM Qualifying
Securities or Qualifying Capital Securities;


 


(vii)                           an event occurs and is continuing as a result of which
the offering document for the offer and sale of the APM Qualifying Securities
or Qualifying Capital Securities would, in the reasonable judgment of the
issuer (or a Subsidiary as specified in clause (i)), contain an untrue
statement of a material fact or omit to state a material fact required to be
stated in that offering document or necessary to make the statements in that
offering document not misleading and either (A) the disclosure of that
event at such time, in the reasonable judgment of the issuer (or a Subsidiary
as specified in clause (i)), would have a material adverse effect on the
business of the issuer (or a Subsidiary as specified in clause (i)) or (B) the
disclosure relates to a previously undisclosed proposed or pending material
business transaction, the disclosure of which would impede the ability of the
issuer or any Subsidiary to consummate that transaction, provided that no
single suspension period contemplated by this paragraph (vii) shall exceed
90 consecutive days and multiple suspension periods contemplated by this
paragraph (vii) shall not exceed an aggregate of 180 days in any 360-day
period; or


 


(viii) the issuer (or a Subsidiary as specified
in clause (i)) reasonably believes, for reasons other than those referred to in
paragraph (vii) above, that the offering document for such offer and sale
of APM Qualifying Securities or Qualifying Capital Securities would not be in
compliance with a rule or regulation of the Commission and the issuer (or
a Subsidiary as specified in clause (i)) is unable to comply with such rule or
regulation or such compliance is unduly burdensome, provided that no single
suspension period contemplated by this paragraph (viii) shall exceed 90
consecutive days and multiple suspension periods contemplated by this paragraph
(viii) shall not exceed an aggregate of 180 days in any 360-day period.


 


The definition of “Market Disruption Event” or similar words as used in any
securities or combination of securities that constitute Replacement Capital
Securities may include less than all of the paragraphs outlined above, as
determined by the issuer thereof at the time of issuance of such securities,
and in the case of clauses (i), (ii), (iii) and (iv), as applicable to a
circumstance where the issuer would otherwise endeavor to issue preferred
stock, shall be limited to circumstances affecting markets where the issuer’s
preferred stock trades or where a listing for its trading is being sought.


 


“Market Value” means, on any date, the closing sale price per share
of Common Stock (or if no closing sale price is reported, the average of the
bid and ask prices or, if more than one in either case, the average of the
average bid and the average ask prices) on that date as reported in composite
transactions by The New York Stock Exchange or, if the Common Stock is not then



 


I-11

















 


listed on The New York
Stock Exchange, as reported by the principal U.S. securities exchange on which
the Common Stock is traded or quoted; if the Common Stock is not either listed
or quoted on any U.S. securities exchange on the relevant date, the Market Value
will be the average of the mid-point of the bid and ask prices for the Common
Stock on the relevant date submitted by at least three nationally recognized
independent investment banking firms selected by the Corporation for this
purpose.


 


“Measurement Period” with respect to any redemption, purchase or
defeasance of Subordinated Debentures, means the period (i) beginning on
the date that is 180 days prior to the date of delivery of notice of such
redemption (such date of delivery, the “notice date”)
or the date of such purchase or defeasance and (ii) ending on such notice
date or the date of such purchase or defeasance.  Measurement Periods cannot run concurrently.


 


“Most Junior Subordinated
Debt” means debt securities of the Corporation that rank upon the issuer’s
liquidation, dissolution or winding-up junior to all of the issuer’s other
long-term indebtedness for money borrowed (other than the issuer’s long-term
indebtedness for money borrowed from time to time outstanding that by its terms
ranks pari passu with such securities) and pari passu with the claims of the
issuer’s trade creditors.  As of the date
hereof, the term “Most Junior Subordinated Debt” shall include the Subordinated
Debentures.


 


“Non-Cumulative”
means, with respect to any securities, that the issuer thereof may elect not to
make any number of periodic Distributions without any remedy arising under the
terms of the securities or related agreements in favor of the holders, other
than one or more Permitted Remedies. 
Securities that include an Alternative Payment Mechanism shall also be
deemed to be Non-Cumulative for all purposes of this Replacement Capital
Covenant except in the definition of “Non-Cumulative  Preferred
Stock.”


 


“Non-Cumulative Preferred Stock” means preferred or preference stock
having Distributions which may be skipped by the issuer thereof for any number
of Distribution Periods without any remedy arising under the terms of such
securities or related transaction agreements in favor of the holders of such
securities as a result of such issuer’s failure to pay Distributions, other
than Permitted Remedies.


 


“NRSRO” means a nationally recognized statistical rating
organization within the meaning of Section 3(a)(62) of the Securities
Exchange Act.


 


“Optional Deferral Provision” means, as to any security or combination
of securities, a provision  in the terms thereof or of the related transaction
agreements, to the effect that the issuer thereof may, in its sole discretion,
defer in whole or in part payment of Distributions on such securities for one
or more consecutive Distribution Periods of up to ten years without any remedy
other than Permitted Remedies as a result of such issuer’s failure to pay
Distributions.


 


“Permitted Remedies” means, as to any security or combination
of securities, any one or more of (i) rights in favor of the holders
thereof permitting such holders to elect one or more directors of the issuer or
its direct or indirect parent company (including any such rights required by
the listing requirements of any stock or securities exchange on which such
securities may be listed or traded) and (ii) complete or partial
prohibitions on the issuer paying Distributions on or repurchasing Common Stock
or other securities that rank pari passu with or junior as to 


 


I-12

















 


Distributions to such
securities for so long as Distributions on such securities, including deferred
Distributions, have not been paid in full or to such lesser extent as may be
specified in the terms of such securities.


 


“Person” means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.


 


“Preferred Cap”
has the meaning specified in the definition of Alternative Payment Mechanism.


 


“Purchase Restriction”
has the meaning specified in the definition of Alternative Payment Mechanism.


 


“Qualifying Capital
Securities” means securities (other than Common Stock, Rights to
acquire Common Stock, Mandatorily Convertible Preferred Stock and Debt
Exchangeable for Equity) that rank pari passu with or junior to the Most Junior
Subordinated Debt of the issuer upon its liquidation, dissolution or winding up
and, in the determination of the Board of Directors reasonably construing the
definitions and other terms of this Replacement Capital Covenant, meet one of
the following criteria:


 


(a)                                  in connection with any redemption,
defeasance or purchase of Subordinated Debentures prior to the Stepdown Date:


 


(i)                                                    securities issued by the Corporation or
its Subsidiaries that (A) have no maturity or a maturity of at least
51 years and (B) either (x) are subject to an Explicit
Replacement Covenant and are Non-Cumulative or (y) have a Mandatory
Trigger Provision and an Optional Deferral Provision and are subject to
Intent-Based Replacement Disclosure;


 


(ii)                                                 securities issued by the Corporation or
its Subsidiaries that (A) have no maturity or a maturity of at least
31 years, (B) are subject to an Explicit Replacement Covenant, (C) have
an Optional Deferral Provision and (D) have a Mandatory Trigger Provision;
or


 


(iii)                                             securities issued by the Corporation or
its Subsidiaries that (A) have no maturity or a maturity of at least
51 years, (B) are subject to an Explicit Replacement Covenant and (C) have
an Optional Deferral Provision;


 


(iv)                                             securities issued by the Corporation or
its Subsidiaries that (A) have no maturity or a maturity of at least
51 years and (B) are subject to Intent-Based Replacement Disclosure
and (C) are Non-Cumulative;


 


(v)                                                securities issued by the Corporation or
its Subsidiaries that (A) have no maturity or a maturity of at least
51 years, 


 


I-13

















 


(B) have an Optional Deferral Provision and (C) have a
Mandatory Trigger Provision;


 


(vi)                                                     securities issued by the Corporation or
its Subsidiaries that (A) have no maturity or a maturity of at least
31 years, (B) are subject to an Explicit Replacement Covenant and (C) are
Non-Cumulative;


 


(vii)                                                  securities issued by the Corporation or
its Subsidiaries that (A) either (x) have no maturity or a maturity
of at least 31 years and are subject to Intent-Based Replacement Disclosure or (y) have
no maturity or a maturity of at least 21 years and are subject to an Explicit
Replacement Covenant, (B) have an Optional Deferral Provision and (C) have
a Mandatory Trigger Provision; or


 


(viii)                                               any other preferred stock issued by the
Corporation that (A) has no prepayment obligation on the part of the
issuer thereof, whether at the election of the holders or otherwise, (B) has
no maturity or a maturity of at least 51 years and (C) is subject to an
Explicit Replacement Covenant; or


 


(b)                                 in connection with any redemption,
defeasance or purchase of the Subordinated Debentures on or after the Stepdown
Date:


 


(i)                                                            all securities described under clause (a) of
this definition;


 


(ii)                                                         securities issued by the Corporation or
its Subsidiaries that (A) have no maturity or a maturity of at least
51 years, (B) are subject to Intent-Based Replacement Disclosure and (C) have
an Optional Deferral Provision;


 


(iii)                                                      securities issued by the Corporation or
its Subsidiaries that (A) have no maturity or a maturity of at least
31 years, (B) are subject to an Explicit Replacement Covenant and (C) have
an Optional Deferral Provision;


 


(iv)                                                     securities issued by the Corporation or
its Subsidiaries that (A) either (x) have no maturity or a maturity
of at least 31 years and are subject to Intent-Based Replacement Disclosure or (y) have
no maturity or a maturity of at least 21 years and are subject to an Explicit
Replacement Covenant and (B) are Non-Cumulative;


 


(v)                                                        securities issued by the Corporation or
its Subsidiaries that (A) have no maturity or a maturity of at least
21 years, (B) are subject to Intent-Based Replacement Disclosure, (C) have
an Optional Deferral Provision and (D) have a Mandatory Trigger Provision;
or


 


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(vi)                                                     any other preferred stock issued by the
Corporation that (A) has no prepayment obligation on the part of the
issuer thereof, whether at the election of the holders or otherwise and (B) either
(x) has no maturity or a maturity of at least 51 years and is subject
to Intent-Based Replacement Disclosure or (y) has no maturity or a maturity
of at least 31 years and is subject to an Explicit Replacement Covenant.


 


“Qualifying Preferred Stock” means Non-Cumulative Preferred Stock of
the Corporation that (i) ranks pari passu with or junior to other
preferred stock of the issuer, (ii) is perpetual with no prepayment
obligation on the part of the issuer thereof, whether at the election of the
holders or otherwise, and (iii) either (x) is subject to an Explicit
Replacement Capital Covenant or (y) is subject to Intent-Based Replacement
Disclosure and has a provision that prohibits the Corporation from paying any
dividends thereon upon its failure to satisfy one or more financial tests set
forth in the terms of such securities or related transaction agreements.


 


“Qualifying Warrants” means net share settled warrants to
purchase Common Stock that have an exercise price greater than the current
Market Value of the issuer’s Common Stock as of their date of issuance, that do
not entitle the issuer to redeem for cash and the holders of such warrants are
not entitled to require the issuer to repurchase for cash in any circumstance.


 


“Redesignation Date” means, as to
the then-effective Covered Debt, the earliest of (i) the date that is two
years prior to the final maturity date of such Covered Debt, (ii) if the
issuer elects to redeem or defease, or the Corporation or a majority-owned
Subsidiary of the Corporation elects to purchase, such Covered Debt either in
whole or in part with the consequence that after giving effect to such
redemption, defeasance or purchase the outstanding principal amount of such
Covered Debt is less than $100,000,000, the applicable redemption, defeasance
or purchase date and (iii) if the then outstanding Covered Debt is not
Eligible Subordinated Debt of the Corporation, the date on which the Corporation issues long-term
indebtedness for money borrowed that is Eligible Subordinated
Debt.


 


“Replacement Capital Covenant” has the meaning specified in the
introduction to this instrument.


 


“Replacement Capital Securities” means securities that meet one or more
of the following criteria in the determination of the Board of Directors
reasonably construing the definitions and other terms of this Replacement
Capital Covenant:


 


(i)                                     Common Stock,


 


(ii)                                  Rights to acquire Common Stock;


 


(iii)                               Debt Exchangeable for Equity;


 


(iv)                              Mandatorily Convertible Preferred Stock;
and


 


(v)                                 Qualifying Capital Securities.


 


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“Rights to acquire Common Stock” includes any right to acquire Common
Stock, including any right to acquire Common Stock pursuant to a stock purchase
plan or employee benefit plan.  Rights to
acquire Common Stock shall include Qualifying Warrants.


 


“Securities Exchange Act”
means the Securities Exchange Act of 1934, as amended.


 


“Share Cap” has
the meaning specified in the definition of Alternative Payment Mechanism.


 


“Stepdown Date” means the date that is 50 years prior to the maturity
date, as it may be extended in accordance with the Supplemental Indenture, of
the Subordinated Debentures, subject to the following provisos: (i) that
the Stepdown Date for any Subordinated Debenture(s) for which a notice of
redemption has been delivered shall be the date that is 50 years prior to the
maturity date of the Subordinated Debenture(s) as of the date such notice
of redemption was delivered and (ii) that if a redemption of such
Subordinated Debenture(s) is not effectuated by the redemption date
contained in such notice, provisio (i) shall have no effect.


 


“Subordinated Debentures” has the meaning specified in Recital A.


 


“Subsidiary”
means, at any time, any Person the shares of stock or other ownership interests
of which having ordinary voting power to elect a majority of the board of
directors or other managers of such Person are at the time owned, or the
management or policies of which are otherwise at the time controlled, directly
or indirectly through one or more intermediaries (including other Subsidiaries)
or both, by another Person.


 


“Supplemental Indenture” means the
First Supplemental Indenture, dated June 27, 2008, with respect to the
Indenture.


 


“Termination Date” has the meaning specified in Section 4(a).


 


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