EX-4.28






Exhibit 4.28




SECOND AMENDED AND RESTATED DECLARATION OF TRUST




TRAVELERS CAPITAL TRUST [II] [III] [IV] [V]




DATED AS OF                     , 200_










 



 




CROSS-REFERENCE TABLE*




	 	 	 
	Section of Trust Indenture	 	Section of
	Act of 1939, as amended	 	Declaration
	310(a)
	 	5.3
	310(b)
	 	5.3(c);5.3(d)
	311(a)
	 	2.2(b)
	311(b)
	 	2.2(b)
	312(a)
	 	2.2(a)
	312(b)
	 	2.2(b)
	313
	 	2.3
	314(a)
	 	2.4; 3.6(i)
	314(c)
	 	2.5
	315(a)
	 	3.9
	315(b)
	 	2.7(a)
	315(c)
	 	3.9(a)
	315(d)
	 	3.9(b)
	316(a)
	 	2.6
	316(b)
	 	12.1(h)
	317(a)
	 	3.8(e)
	317(b)
	 	3.8(h);7.3
	318
	 	2.1








 




			
	*	 	This Cross-Reference Table does not constitute part of this Declaration and shall not affect the
interpretation of any of its terms or provisions.











 




 


Table of Contents




	 	 	 	 	 
	 	 	Page
	ARTICLE I INTERPRETATION AND DEFINITIONS
	 	 	1	 
	SECTION 1.1   Definitions
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II TRUST INDENTURE ACT
	 	 	7	 
	SECTION 2.1   Trust Indenture Act: Application
	 	 	7	 
	SECTION 2.2   Lists of Holders of Securities
	 	 	7	 
	SECTION 2.3   Reports by the Institutional Trustee
	 	 	8	 
	SECTION 2.4   Periodic Reports to Institutional Trustee
	 	 	8	 
	SECTION 2.5   Evidence of Compliance With Conditions Precedent
	 	 	8	 
	SECTION 2.6   Events of Default: Waiver
	 	 	8	 
	SECTION 2.7   Events of Default: Notice
	 	 	10	 
	 
	 	 	 	 
	ARTICLE III ORGANIZATION
	 	 	10	 
	SECTION 3.1   Name
	 	 	10	 
	SECTION 3.2   Office
	 	 	10	 
	SECTION 3.3   Declaration
	 	 	11	 
	SECTION 3.4   Authority
	 	 	11	 
	SECTION 3.5   Title to Property of the Trust
	 	 	11	 
	SECTION 3.6   Powers and Duties of the Regular Trustees
	 	 	11	 
	SECTION 3.7   Prohibition of Actions by the Trust and the Trustees
	 	 	14	 
	SECTION 3.8   Powers and Duties of the Institutional Trustee
	 	 	15	 
	SECTION 3.9   Certain Duties and Responsibilities of the Institutional Trustee
	 	 	17	 
	SECTION 3.10   Certain Rights of the Institutional Trustee
	 	 	18	 
	SECTION 3.11   Delaware Trustee
	 	 	20	 
	SECTION 3.12   Execution of Documents
	 	 	20	 
	SECTION 3.13   Not Responsible for Recitals or Issuance of Securities
	 	 	21	 
	SECTION 3.14   Duration of Trust
	 	 	21	 
	SECTION 3.15   Mergers
	 	 	21	 
	 
	 	 	 	 
	ARTICLE IV SPONSOR
	 	 	23	 
	SECTION 4.1   Sponsor’s Purchase of Common Securities
	 	 	23	 
	SECTION 4.2   Responsibilities of the Sponsor
	 	 	23	 
	SECTION 4.3   Guarantee of Payment of Trust Obligations
	 	 	24	 
	 
	 	 	 	 
	ARTICLE V TRUSTEES
	 	 	24	 
	SECTION 5.1   Number of Trustees
	 	 	24	 
	SECTION 5.2   Delaware Trustee
	 	 	25	 
	SECTION 5.3   Institutional Trustee: Eligibility
	 	 	25	 
	SECTION 5.4   Qualifications of Regular Trustees and Delaware Trustee Generally.
	 	 	26	 
	SECTION 5.5   Initial Trustees: Additional Powers of Regular Trustees
	 	 	26	 
	SECTION 5.6   Appointment, Removal and Resignation of Trustees
	 	 	26	 
	SECTION 5.7   Vacancies Among Trustees
	 	 	28	 
	SECTION 5.8   Effect of Vacancies
	 	 	28	 






i






 






	 	 	 	 	 
	 	 	Page
	SECTION 5.9   Meetings
	 	 	28	 
	SECTION 5.10   Delegation of Power
	 	 	29	 
	SECTION 5.11   Merger, Conversion, Consolidation or Succession to Business
	 	 	29	 
	SECTION 5.12   Status of Trustees
	 	 	29	 
	 
	 	 	 	 
	ARTICLE VI DISTRIBUTIONS
	 	 	29	 
	SECTION 6.1   Distributions
	 	 	29	 
	 
	 	 	 	 
	ARTICLE VII ISSUANCE OF SECURITIES
	 	 	30	 
	SECTION 7.1   General Provisions Regarding Securities
	 	 	30	 
	SECTION 7.2   Registrar and Paying Agent
	 	 	31	 
	SECTION 7.3   Paying Agent to Hold Money in Trust
	 	 	31	 
	 
	 	 	 	 
	ARTICLE VIII DISSOLUTION OF TRUST
	 	 	31	 
	SECTION 8.1   Dissolution of Trust.
	 	 	31	 
	 
	 	 	 	 
	ARTICLE IX TRANSFER OF INTERESTS
	 	 	32	 
	SECTION 9.1   Transfer of Securities
	 	 	32	 
	SECTION 9.2   Transfer of Certificates
	 	 	33	 
	SECTION 9.3   Deemed Security Holders
	 	 	33	 
	SECTION 9.4   Book Entry Interests
	 	 	33	 
	SECTION 9.5   Notices to Clearing Agency
	 	 	34	 
	SECTION 9.6   Appointment of Successor Clearing Agency
	 	 	34	 
	SECTION 9.7   Definitive Preferred Security Certificates
	 	 	34	 
	SECTION 9.8   Mutilated, Destroyed, Lost or Stolen Certificates
	 	 	35	 
	 
	 	 	 	 
	ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
	 	 	36	 
	SECTION 10.1   Liability
	 	 	36	 
	SECTION 10.2   Exculpation
	 	 	36	 
	SECTION 10.3   Fiduciary Duty
	 	 	37	 
	SECTION 10.4   Indemnification
	 	 	37	 
	SECTION 10.5   Outside Businesses
	 	 	40	 
	 
	 	 	 	 
	ARTICLE XI ACCOUNTING
	 	 	41	 
	SECTION 11.1   Fiscal Year
	 	 	41	 
	SECTION 11.2   Certain Accounting Matters
	 	 	41	 
	SECTION 11.3   Banking
	 	 	41	 
	SECTION 11.4   Withholding
	 	 	42	 
	 
	 	 	 	 
	ARTICLE XII AMENDMENTS AND MEETINGS
	 	 	42	 
	SECTION 12.1   Amendments
	 	 	42	 
	SECTION 12.2   Meetings of the Holders of Securities: Action by Written Consent
	 	 	44	 
	 
	 	 	 	 
	ARTICLE XIII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
	 	 	45	 
	SECTION 13.1   Representations and Warranties of Institutional Trustee
	 	 	45	 
	SECTION 13.2   Representations and Warranties of Delaware Trustee
	 	 	46	 












 



 


	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	ARTICLE XIV MISCELLANEOUS
	 	 	47	 
	SECTION 14.1   Notices
	 	 	47	 
	SECTION 14.2   Governing Law
	 	 	48	 
	SECTION 14.3   Intention of the Parties
	 	 	48	 
	SECTION 14.4   Headings
	 	 	48	 
	SECTION 14.5   Successors and Assigns
	 	 	48	 
	SECTION 14.6   Partial Enforceability
	 	 	48	 
	SECTION 14.7   Counterparts
	 	 	48	 












 



 


          SECOND AMENDED AND RESTATED DECLARATION OF TRUST (“Declaration”) dated and effective as of
[___, 200___], by the Trustees (as defined herein), the Sponsor (as defined herein) and by the
holders, from time to time, of undivided beneficial interests in the assets of the Trust to be
issued pursuant to this Declaration;




          WHEREAS, certain of the Trustees and the Sponsor established Travelers Capital Trust [II]
[III] [IV] [V] (the “Trust”), a trust under the Statutory Trust Act (as defined herein), pursuant
to a Declaration of Trust dated as of [                    ] (the “Original Declaration”), and a Certificate
of Trust filed with the Secretary of State of the State of Delaware on [                    ], for the sole
purpose of issuing and selling certain securities representing undivided beneficial interests in
the assets of the Trust and investing the proceeds thereof in certain Debentures (as defined
herein) of the Debenture Issuer (as defined herein);




          WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend and restate each and
every term and provision of the Original Declaration.




          NOW, THEREFORE, it being the intention of the parties hereto to continue the Trust as a
statutory trust under the Statutory Trust Act and that this Declaration constitute the governing
instrument of such statutory trust, the Trustees declare that all assets contributed to the Trust
will be held in trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued hereunder, subject to
the provisions of this Declaration.




ARTICLE I

INTERPRETATION AND DEFINITIONS




          SECTION 1.1 Definitions.




          Unless the context otherwise requires:




          (a) Capitalized terms used in this Declaration but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;




          (b) a term defined anywhere in this Declaration has the same meaning throughout;




          (c) all references to “the Declaration” or “this Declaration” are to this Declaration as
modified, supplemented or amended from time to time;




          (d) all references in this Declaration to Articles, Sections, Annexes and Exhibits are to
Articles and Sections of, and Annexes and Exhibits to, this Declaration unless otherwise specified;




          (e) a term defined in the Trust Indenture Act has the same meaning when used in this
Declaration unless otherwise defined in this Declaration or unless the context otherwise requires;
and




          (f) a reference to the singular includes the plural and vice versa.




     1     










 



 


     2




          “Affiliate” has the same meaning as given to that term in Rule 405 under the Securities Act,
or any successor provision thereto and as may be amended from time to time.




          “Authorized Officer” of a Person means any vice president, senior vice president, president,
chief executive officer, treasurer, controller or other individual executing a document or
otherwise acting by virtue of authority vested in such individual by such Person in an instrument
expressly designating such individual as an Authorized Officer and referencing this Declaration.




          “Beneficiary” has the meaning specified in Section 4.3(a).




          “Book Entry Interest” means a beneficial interest in a Global Certificate, ownership and
transfers of which shall be maintained and made through book entries by a Clearing Agency as
described in Section 9.4.




          “Business Day” means any day other than a day on which banking institutions in the City of New
York, New York are authorized or required by any applicable law or executive order to close.




          “Certificate” means a Common Security Certificate or a Preferred Security Certificate.




          “Clearing Agency” means an organization registered as a “Clearing Agency” pursuant to Section
17A of the Exchange Act that is acting as depositary for the Preferred Securities and in whose name
or in the name of a nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Preferred Securities.




          “Clearing Agency Participant” means a broker, dealer, bank, other financial institution or
other Person for whom from time to time the Clearing Agency effects book entry transfers and
pledges of securities deposited with the Clearing Agency.




          “Closing Date” means the Closing Date as defined in the Underwriting Agreement, which date is
also the date of execution and delivery of this Declaration.




          “Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor
legislation.




          “Commission” means the Securities and Exchange Commission.




          “Common Security” has the meaning specified in Section 7.1.




          “Common Security Certificate” means a definitive certificate in fully registered form
representing a Common Security substantially in the form of Exhibit A-2.




          “Company Indemnified Person” means (a) any Regular Trustee; (b) any Affiliate of any Regular
Trustee; (c) any officers, directors, shareholders, members, partners, employees,










 



3

representatives or agents of any Regular Trustee; or (d) any officer, employee or agent of the
Trust or its Affiliates.




          “Corporate Trust Office” means the office of the Institutional Trustee at which the corporate
trust business of the Institutional Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Declaration is located at The Bank of
New York Mellon Global, Corporate Trust, Corporate Finance, 222 Berkeley Street, Boston, MA 02116.




          “Covered Person” means: (a) any officer, director, shareholder, partner, member,
representative, employee or agent of (i) the Trust or (ii) the Trust’s Affiliates; and (b) any
Holder of Securities.




          “Debenture Issuer” means the Sponsor, in its capacity as issuer of the Debentures under the
Indenture.




          “Debenture Trustee” means The Bank of New York Mellon Trust Company, N.A., as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means such successor
trustee.




          “Debentures” means the [ ]% [Senior] [Subordinated] [Junior Subordinated] Debentures due [ ],
to be issued by the Debenture Issuer pursuant to the Indenture to be held by the Institutional
Trustee.




          “Definitive Preferred Security Certificates” has the meaning set forth in Section 9.4.




          “Delaware Trustee” has the meaning set forth in Section 5.2.




          “Distribution” has the meaning set forth in Section 6.1.




          “DTC” means The Depository Trust Company, the initial Clearing Agency.




          “Event of Default” in respect of the Securities means an Event of Default (as defined in the
Indenture) has occurred and is continuing in respect of the Debentures.




          “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any
successor legislation.




          “Fiduciary Indemnified Person” has the meaning set forth in Section 10.4(b).




          “Fiscal Year” has the meaning set forth in Section 11.1.




          “Global Certificate” has the meaning set forth in Section 9.4.




          “Holder” means a Person in whose name a Certificate representing a Security is registered,
such Person being a beneficial owner within the meaning of the Statutory Trust Act.










 



4




          “Indemnified Person” means a Company Indemnified Person or a Fiduciary Indemnified Person.




          “Indenture” means the [Senior] [Subordinated] [Junior Subordinated] Debt Indenture dated as of
[          , 200 ], between the Debenture Issuer and the Debenture Trustee, as amended or
supplemented from time to time, pursuant to which the Debentures are to be issued.




          “Institutional Trustee” means the Trustee meeting the eligibility requirements set forth in
Section 5.3.




          “Institutional Trustee Account” has the meaning set forth in Section 3.8(c).




          “Investment Company” means an investment company as defined in the Investment Company Act.




          “Investment Company Act” means the Investment Company Act of 1940, as amended, or any
successor legislation.




          “Investment Company Event” has the meaning set forth in Annex I hereto.




          “Legal Action” has the meaning set forth in Section 3.6(g).




          “List of Holders” has the meaning set forth in Section 2.2(a).




          “Majority in liquidation amount of the Securities” means, except to the extent otherwise
provided in the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities voting together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of an aggregate liquidation amount representing more than 50% of
the aggregate liquidation amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.




          “Obligations” has the meaning set forth in Section 4.3(a).




          “Officers’ Certificate” means, with respect to any Person, a certificate signed by two
Authorized Officers of such Person. Any Officers’ Certificate delivered with respect to compliance
with a condition or covenant provided for in this Declaration shall include:





     (A) a statement that each officer signing the Officers’ Certificate has read the
covenant or condition and the definitions relating thereto;




     (B) a brief statement of the nature and scope of the examination or investigation
undertaken by each officer in rendering the Officers’ Certificate;




     (C) a statement that each such officer has made such examination or investigation as,
in such officer’s opinion, is necessary to enable such officer to express









 



5



an informed opinion as to whether or not such covenant or condition has been complied
with; and




     (D) a statement as to whether, in the opinion of each such officer, such condition or
covenant has been complied with.



          “Paying Agent” has the meaning specified in Section 3.8(h).




          “Payment Amount” has the meaning specified in Section 6.1.




          “Person” means a legal person, including any individual, corporation, estate, partnership,
joint venture, association, joint stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision thereof, or any other entity of
whatever nature.




          “Preferred Securities Guarantee” means the guarantee agreement dated as of [                    , 200_],
between the Sponsor and the Trustee named therein relating to the Preferred Securities.




          “Preferred Security” has the meaning specified in Section 7.1.




          “Preferred Security Beneficial Owner” means, with respect to a Book Entry Interest, a Person
who is the beneficial owner of such Book Entry Interest, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).




          “Preferred Security Certificate” means a certificate representing a Preferred Security
substantially in the form of Exhibit A-1.




          “Quorum” means a majority of the Regular Trustees or, if there are only two Regular Trustees,
both of them.




          “Registrar” has the meaning set forth in Section 7.2.




          “Regular Trustee” has the meaning specified in Section 5.1.




          “Related Party” means, with respect to the Sponsor, any direct or indirect wholly owned
subsidiary of the Sponsor or any other Person that owns, directly or indirectly, 100% of the
outstanding voting securities of the Sponsor.




          “Responsible Officer” means, with respect to the Institutional Trustee, any officer of the
Institutional Trustee with direct responsibility for the administration of this Second Amended and
Restated Declaration of Trust and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer’s knowledge of and
familiarity with the particular subject.




          “Rule 3a-5” means Rule 3a-5 under the Investment Company Act.










 



6




          “Rule 3a-7” means Rule 3a-7 under the Investment Company Act.




          “Securities” means the Common Securities and the Preferred Securities.




          “Securities Act” means the Securities Act of 1933, as amended from time to time, or any
successor legislation.




          “Special Event” has the meaning set forth in Annex I hereto.




          “Sponsor” means The Travelers Companies, Inc., or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.




          “Statutory Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Sections
3801 et seq., as it may be amended from time to time, or any successor legislation.




          “Successor Delaware Trustee” has the meaning set forth in Section 5.6(b)(i).




          “Successor Entity” has the meaning set forth in Section 3.15(b).




          “Successor Institutional Trustee” has the meaning set forth in Section 5.6(b)(ii).




          “Successor Securities” has the meaning set forth in Section 3.15(b).




          “Super Majority” has the meaning set forth in Section 2.6(a)(ii).




          “Tax Event” has the meaning set forth in Annex I hereto.




          [“10% in liquidation amount of the Securities” means, except as provided in the terms of the
Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding Securities voting
together as a single class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a class, who are the
record owners of an aggregate liquidation amount representing 10% or more of the aggregate
liquidation amount (including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.]




          “Travelers” means The Travelers Companies, Inc., a Minnesota corporation.




          “Treasury Regulations” means the income tax regulations, including temporary and proposed
regulations, promulgated under the Code by the United States Treasury, as such regulations may be
amended from time to time (including corresponding provisions of succeeding regulations).




          “Trustee” or “Trustees” means each Person who has signed this Declaration as a trustee, so
long as such Person shall continue in office in accordance with the terms hereof, and all other
Persons who may from time to time be duly appointed, qualified and serving as Trustees










 



7

in accordance with the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees hereunder.




          “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended from time to time, or
any successor legislation.




          “Underwriting Agreement” means the Underwriting Agreement for the offering and sale of
Preferred Securities substantially in the form appearing as exhibit 1.5 to the registration
statement on Form S-3 of Travelers and the Trust relating to the Preferred Securities and the
related Preferred Securities Guarantee.




ARTICLE II

TRUST INDENTURE ACT




          SECTION 2.1 Trust Indenture Act: Application.




          (a) This Declaration is subject to the provisions of the Trust Indenture Act that are required
to be part of this Declaration and shall, to the extent applicable, be governed by such provisions.




          (b) The Institutional Trustee shall be the only Trustee that is a Trustee for the purposes of
the Trust Indenture Act.




          (c) If and to the extent that any provision of this Declaration limits, qualifies or conflicts
with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.




          (d) The application of the Trust Indenture Act to this Declaration shall not affect the nature
of the Securities as equity securities representing undivided beneficial interests in the assets of
the Trust.




          SECTION 2.2 Lists of Holders of Securities.




          (a) Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide the
Institutional Trustee (i) within 14 days after each record date for payment of Distributions, a
list, in such form as the Institutional Trustee may reasonably require, of the names and addresses
of the Holders of the Securities (“List of Holders”) as of such record date, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request therefor, a List of Holders as of
a date no more than 14 days before such List of Holders is given to the Institutional Trustee;
provided, that neither the Sponsor nor the Regular Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Institutional Trustee by the Sponsor and the Regular
Trustees on behalf of the Trust. The Institutional Trustee shall preserve, in as current a form as
is reasonably practicable, all information contained in Lists of Holders given to it or which it
receives in the capacity as Paying Agent (if acting in such capacity) provided that the
Institutional Trustee may destroy any List of Holders previously given to it on receipt of a new
List of Holders. Unless supplemented, amended or restated pursuant to this Section 2.2(a), the










 



8

Institutional Trustee shall be entitled to rely exclusively on the last List of Holders
provided to it by the Sponsor or any Regular Trustee.




          (b) The Institutional Trustee shall comply with its obligations under Sections 311(a), 311(b)
and 312(b) of the Trust Indenture Act.




          SECTION 2.3 Reports by the Institutional Trustee.




          Within 60 days after May 15 of each year, the Institutional Trustee shall provide to the
Holders of the Preferred Securities such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by such Section 313. The
Institutional Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.




          SECTION 2.4 Periodic Reports to Institutional Trustee.




          Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Institutional Trustee such documents, reports and information as required by Sections 314 (if any)
and the compliance certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.




          SECTION 2.5 Evidence of Compliance With Conditions Precedent.




          Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Institutional Trustee such evidence of compliance with any conditions precedent, if any, provided
for in this Declaration that relate to any of the matters set forth in Sections 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers’ Certificate.




          SECTION 2.6 Events of Default: Waiver.




          (a) The Holders of a Majority in liquidation amount of Preferred Securities may, by vote, on
behalf of the Holders of all of the Preferred Securities, waive any past Event of Default in
respect of the Preferred Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:





     (i) is not waivable under the Indenture, the Event of Default under the Declaration
shall also not be waivable; or




     (ii) is waivable only with the consent of Holders of more than a majority in principal
amount of the Debentures (a “Super Majority”) affected thereby, only the Holders of at least
the proportion in aggregate liquidation amount of the Preferred Securities that the relevant
Super Majority represents of the aggregate principal amount of the Debentures outstanding
may waive such Event of Default in respect of the Preferred Securities under the
Declaration.



          The foregoing provisions of this Section 2.6(a) shall be in lieu of Section 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(l)(B) of the Trust Indenture Act










 



9

is hereby expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend to any subsequent or
other default or an Event of Default with respect to the Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Preferred Securities of an Event of Default
with respect to the Preferred Securities shall also be deemed to constitute a waiver by the Holders
of the Common Securities of any such Event of Default with respect to the Common Securities for all
purposes of this Declaration without any further act, vote, or consent of the Holders of the Common
Securities.




          (b) The Holders of a Majority in liquidation amount of the Common Securities may, by vote, on
behalf of the Holders of all of the Common Securities, waive any past Event of Default with respect
to the Common Securities and its consequences, provided that, if the underlying Event of Default
under the Indenture:





     (i) is not waivable under the Indenture, except where the Holders of the Common
Securities are deemed to have waived such Event of Default under the Declaration as provided
in this Section 2.6(b), the Event of Default under the Declaration shall also not be
waivable; or




     (ii) is waivable only with the consent of a Super Majority, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under the Declaration
as provided in this Section 2.6(b), only the Holders of at least the proportion in aggregate
liquidation amount of the Common Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding may waive such Event of Default
in respect of the Common Securities under the Declaration; provided further, each Holder of
Common Securities will be deemed to have waived any such Event of Default and all Events of
Default with respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default with respect to the Preferred Securities have
been cured, waived or otherwise eliminated, the Institutional Trustee will be deemed to be
acting solely on behalf of the Holders of the Preferred Securities and only the Holders of
the Preferred Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this Section 2.6(b)
shall be in lieu of Sections 316(a)(1)(A) and 316(a)(l)(B) of the Trust Indenture Act and
such sections are hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon the waiver of an Event of Default by the Holders of a Majority in liquidation
amount of the Common Securities, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Common Securities or
impair any right consequent thereon.









 



10


          (c) A waiver of an Event of Default under the Indenture by the Institutional Trustee, at the
direction of the Holders of the Preferred Securities, constitutes a waiver of the corresponding
Event of Default under this Declaration. The foregoing provisions of this Section 2.6(c) shall be
in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act.




          SECTION 2.7 Events of Default: Notice.




          (a) The Institutional Trustee shall, within 90 days after the Institutional Trustee has
knowledge of the occurrence of an Event of Default, transmit by mail, first class postage prepaid,
to the Holders of the Securities (i) notices of all defaults with respect to the Securities
actually known to a Responsible Officer of the Institutional Trustee, unless such Event of Default
has been cured before the giving of such notice and (ii) any notice of default received from the
Indenture Trustee with respect to the Debentures, which notice from the Institutional Trustee to
the Holders shall state that an Event of Default under the Indenture also constitutes an Event of
Default with respect to the Securities; provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or in the payment of any
sinking fund installment established for the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of the Institutional
Trustee in good faith determines that the withholding of such notice is in the interests of the
Holders of the Securities.




          (b) The Institutional Trustee shall not be deemed to have knowledge of any default except:





     (i) a default under Sections 501(1) and 501(2) of the Indenture; or




     (ii) any default as to which the Institutional Trustee shall have received written
notice or of which a Responsible Officer of the Institutional Trustee charged with the
administration of this Declaration shall have actual knowledge.



ARTICLE III

ORGANIZATION




          SECTION 3.1 Name.




          The Trust is named “Travelers Capital Trust [II] [III] [IV] [V]” as such name may be modified
from time to time by the Regular Trustees following written notice to the Holders of Securities.
The Trust’s activities may be conducted under the name of the Trust or any other name deemed
advisable by the Regular Trustees.




          SECTION 3.2 Office.




          The address of the principal office of the Trust is c/o The Travelers Companies, Inc., 385
Washington Street, St. Paul, Minnesota 55102. On ten Business Days’ written notice to the
Institutional Trustee, the Delaware Trustee and the Holders of Securities, the Regular Trustees may
designate another principal office.










 



11




          SECTION 3.3 Declaration.




          (a) The exclusive purposes and functions of the Trust are (i) to issue and sell Securities and
use the proceeds from such sale to acquire the Debentures, (ii) to maintain the status of the Trust
as a grantor trust for United States federal income tax purposes, and (iii) except as otherwise
limited herein, to engage in only those other activities necessary, advisable or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.




          (b) The Trust will be classified as a grantor trust for United States federal income tax
purposes under Subpart E of Subchapter J of the Code, pursuant to which the Holders of the
Preferred Securities and the Common Securities will be the owners of the Trust for United States
federal income tax purposes, and such Holders will include directly in their gross income the
income, gain, deduction or loss of the Trust as if the Trust did not exist. By the acceptance of
this Trust, neither the Trustees, the Sponsor nor the owners of the Preferred Securities or Common
Securities will take any position for United States federal income tax purposes which is contrary
to the classification of the Trust as a grantor trust.




          SECTION 3.4 Authority.




          Subject to the limitations provided in this Declaration and to the specific duties of the
Institutional Trustee, the Regular Trustees shall have exclusive and complete authority to carry
out the purposes of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall constitute the act
of and serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no
Person shall be required to inquire into the authority of the Trustees to bind the Trust. Persons
dealing with the Trust are entitled to rely conclusively on the power and authority of the Trustees
as set forth in this Declaration.




          SECTION 3.5 Title to Property of the Trust.




          Except as provided in Section 3.8 with respect to the Debentures and the Institutional Trustee
Account or as otherwise expressly provided in this Declaration, legal title to all assets of the
Trust shall be vested in the Trust. The Holders shall not have legal title to any part of the
assets of the Trust, but shall have an undivided beneficial interest in the assets of the Trust.




          SECTION 3.6 Powers and Duties of the Regular Trustees.




          The Regular Trustees shall have the exclusive power, duty and authority to cause the Trust to
engage in the following activities:




          (a) to issue and sell the Preferred Securities and the Common Securities in accordance with
this Declaration; provided, however, that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and, provided










 



12

further, that there shall be no beneficial interests in the Trust other than the Securities,
and the issuance of Securities shall be limited to a simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date;




          (b) in connection with the issue and sale of the Preferred Securities, at the direction of the
Sponsor, to:





     (i) assist in the preparation of a prospectus in preliminary and final form prepared by
the Sponsor in relation to the offering and sale of Preferred Securities and to assist in
the preparation of and filing with the Commission on behalf of the Trust a registration
statement on Form S-3 or on another appropriate form (including, if appropriate, a
registration statement under Rule 462(b) of the Securities Act), including any pre-effective
or post-effective amendments thereto, relating to the registration under the Securities Act
of the Preferred Securities;




     (ii) execute and file any documents prepared by the Sponsor, or take any acts
determined by the Sponsor to be necessary, in order to qualify or register all or part of
the Preferred Securities in any State in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;




     (iii) assist in the filing of an application, prepared by the Sponsor, to the New York
Stock Exchange, Inc., any other national stock exchange or the Nasdaq National Market for
listing upon notice of issuance of any Preferred Securities;




     (iv) assist in the filing with the Commission on behalf of the Trust a registration
statement on Form 8-A, prepared by the Sponsor, including any pre-effective or
post-effective amendments thereto, relating to the registration of the Preferred Securities
under Section 12(b) of the Exchange Act;




     (v) assist in the preparation of the Underwriting Agreement providing for the sale and
Distribution of the Preferred Securities; and




     (vi) execute and deliver letters, documents, or instruments with the Clearing Agency
relating to the Preferred Securities;



          (c) to acquire the Debentures with the proceeds of the sale of the Preferred Securities and
the Common Securities; provided, however, that the Regular Trustees shall cause legal title to the
Debentures to be held of record in the name of the Institutional Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common Securities;




          (d) to give the Sponsor and the Institutional Trustee prompt written notice of the occurrence
of a Special Event;




          (e) to establish a record date with respect to all actions to be taken hereunder that require
a record date be established, including and with respect to, for the purposes of Section 316(c) of
the Trust Indenture Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Preferred Securities and Holders of Common Securities as to such
actions and applicable record dates;










 



13




          (f) to take all actions and perform such duties as may be required of the Regular Trustees
pursuant to the terms of the Securities or this Declaration;




          (g) to bring or defend, pay, collect, compromise, arbitrate, resort to legal action, or
otherwise adjust claims or demands of or against the Trust (“Legal Action”), unless pursuant to
Section 3.8(e), the Institutional Trustee has the exclusive power to bring such Legal Action;




          (h) to employ or otherwise engage employees and agents (who may be designated as officers with
titles) and managers, contractors, advisors, and consultants and pay reasonable compensation for
such services;




          (i) to give the certificate required by Section 314(a)(4) of the Trust Indenture Act to the
Institutional Trustee, which certificate may be executed by any Regular Trustee;




          (j) to incur expenses that are necessary or incidental to carry out any of the purposes of the
Trust;




          (k) to act as, or appoint another Person to act as, registrar and transfer agent for the
Securities;




          (l) to give prompt written notice to the Holders of the Securities of any notice received from
the Debenture Issuer of its election to defer payments of interest on the Debentures by extending
the interest payment period under the Indenture;




          (m) to take all action that may be necessary or appropriate for the preservation and the
continuation of the Trust’s valid existence, rights, franchises and privileges as a statutory trust
under the laws of the State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred Securities or to enable
the Trust to effect the purposes for which the Trust was created;




          (n) to take any action, not inconsistent with this Declaration or with applicable law, that
the Regular Trustees determine in their discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6, including, but not limited to:





     (i) causing the Trust not to be deemed to be an Investment Company required to be
registered as such under the Investment Company Act;




     (ii) causing the Trust to be classified for United States federal income tax purposes
as a grantor trust; and




     (iii) cooperating with the Debenture Issuer to ensure that the Debentures will be
treated as indebtedness of the Debenture Issuer for United States federal income tax
purposes, provided that such action does not adversely affect the interests of Holders;


as long as it does not materially and adversely affect the Holders of the Securities;










 



14




          (o) to the extent provided in this Declaration, terminating, dissolving and liquidating the
Trust and preparing, executing and filing the certificate of cancellation with the Secretary of
State of the State of Delaware;




          (p) to take all action necessary to cause all applicable tax returns and tax information
reports that are required to be filed with respect to the Trust to be duly prepared and filed by
the Regular Trustees, on behalf of the Trust; and




          (q) to execute all documents or instruments, perform all duties and powers, and do all things
for and on behalf of the Trust in all matters necessary or incidental to the foregoing.




          The Regular Trustees must exercise the powers set forth in this Section 3.6 in a manner that
is consistent with the purposes and functions of the Trust set out in Section 3.3, and the Regular
Trustees shall not take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.




          Subject to this Section 3.6, the Regular Trustees shall have none of the powers or the
authority of the Institutional Trustee set forth in Section 3.8.




          Any expenses incurred by the Regular Trustees pursuant to this Section 3.6 shall be reimbursed
by the Debenture Issuer.




          SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.




          (a) The Trust shall not, and the Trustees (including the Institutional Trustee) shall not,
engage in any activity other than as required or authorized by this Declaration. In particular, the
Trust shall not and no Trustee (including the Institutional Trustee) shall cause the Trust to:





     (i) invest any proceeds received by the Trust from holding the Debentures, but shall
promptly distribute all such proceeds to Holders of Securities pursuant to the terms of this
Declaration and of the Securities;




     (ii) acquire any assets other than as expressly provided herein;




     (iii) possess Trust property for other than a Trust purpose;




     (iv) make any loans or incur any indebtedness other than loans represented by the
Debentures;




     (v) possess any power or otherwise act in such a way as to vary the Trust assets or the
terms of the Securities in any way whatsoever;




     (vi) issue any securities or other evidences of beneficial ownership of, or beneficial
interest in, the Trust other than the Securities;









 



15



     (vii) other than as provided in this Declaration or Annex I, (A) direct the time,
method and place of exercising any trust or power conferred upon the Debenture Trustee with
respect to the Debentures, (B) waive any past default that is waivable under the Indenture,
or (C) exercise any right to rescind or annul any declaration that the principal of all the
Debentures shall be due and payable;




     (viii) consent to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required unless the Trust shall have received an
opinion of counsel to the effect that such amendment, modification or termination will not
cause more than an insubstantial risk that the Trust will not be classified as a grantor
trust for United States federal income tax purposes; or




     (ix) take any action inconsistent with the status of the Trust as a grantor trust for
United States federal income tax purposes.



          SECTION 3.8 Powers and Duties of the Institutional Trustee.




          (a) The legal title to the Debentures shall be owned by and held of record in the name of the
Institutional Trustee in trust for the benefit of the Holders of the Securities. The right, title
and interest of the Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with Section 5.6. Such
vesting and cessation of title shall be effective whether or not conveyancing documents with regard
to the Debentures have been executed and delivered.




          (b) The Institutional Trustee shall not transfer its right, title and interest in the
Debentures to the Regular Trustees or to the Delaware Trustee (if the Institutional Trustee does
not also act as Delaware Trustee).




          (c) The Institutional Trustee shall:





     (i) establish and maintain a segregated non-interest bearing trust account (the
“Institutional Trustee Account”) in the name of and under the exclusive control of the
Institutional Trustee on behalf of the Holders of the Securities and, upon the receipt of
payments of funds made in respect of the Debentures held by the Institutional Trustee,
deposit such funds into the Institutional Trustee Account and make payments to the Holders
of the Preferred Securities and Holders of the Common Securities from the Institutional
Trustee Account in accordance with Section 6.1. Funds in the Institutional Trustee Account
shall be held uninvested until disbursed in accordance with this Declaration. The
Institutional Trustee Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness assigned by a “nationally
recognized statistical rating organization,” as that term is defined for purposes of Rule
436(g)(2) under the Securities Act, is at least equal to the rating assigned to the
Preferred Securities by a nationally recognized statistical rating organization, unless the
Preferred Securities are not rated, in which case the banking institution’s long-term
unsecured indebtedness shall be rated at least investment grade by such an organization;




     (ii) engage in such ministerial activities as shall be specified in written
instructions from the Regular Trustees or the Sponsor to effect the redemption of the









 



16

     Preferred Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and





     (iii) upon written notice of Distribution issued by the Regular Trustees in accordance
with the terms of the Securities, engage in such ministerial activities as shall be
specified in written instructions from the Regular Trustees or the Sponsor to effect the
Distribution of the Debentures to Holders of Securities upon the occurrence of certain
Special Events or other specified circumstances pursuant to the terms of the Securities.



          (d) The Institutional Trustee shall take all actions and perform such duties as may be
specifically required of the Institutional Trustee pursuant to the terms of the Securities or this
Declaration.




          (e) Subject to Section 2.6, the Institutional Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default of which a Responsible Officer of the
Institutional Trustee has actual knowledge or the Institutional Trustee’s duties and obligations
under this Declaration or the Trust Indenture Act.




          (f) The Institutional Trustee shall not resign as a Trustee unless either:





     (i) the Trust has been completely liquidated and the proceeds of the liquidation
distributed to the Holders of Securities pursuant to the terms of the Securities; or




     (ii) a Successor Institutional Trustee has been appointed and has accepted that
appointment in accordance with Section 5.6.



          (g) The Institutional Trustee shall have the legal power to exercise all of the rights, powers
and privileges of a Holder of Debentures under the Indenture and, if an Event of Default actually
known to a Responsible Officer of the Institutional Trustee occurs and is continuing, the
Institutional Trustee shall, for the benefit of Holders of the Securities, enforce its rights as
Holder of the Debentures subject to the rights of the Holders pursuant to the terms of such
Securities, this Declaration, the Statutory Trust Act and the Trust Indenture Act.




          (h) The Institutional Trustee may authorize one or more Persons (each, a “Paying Agent”) to
pay Distributions, redemption payments or liquidation payments on behalf of the Trust with respect
to all Securities and any such Paying Agent shall comply with Section 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Institutional Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the Institutional Trustee.




          (i) Subject to this Section 3.8, the Institutional Trustee shall have none of the duties,
liabilities, powers or the authority of the Regular Trustees set forth in Section 3.6.




          The Institutional Trustee shall be authorized to undertake any actions set forth in Section
317(a) of the Trust Indenture Act.










 



17




          The Institutional Trustee must exercise the powers set forth in this Section 3.8 in a manner
that is consistent with the purposes and functions of the Trust set out in Section 3.3, and the
Institutional Trustee shall not take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.




          SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.




          (a) The Institutional Trustee, before the occurrence of any Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to perform only such duties
as are specifically set forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) of which a Responsible Officer of the
Institutional Trustee has actual knowledge, the Institutional Trustee shall exercise such of the
rights and powers vested in it by this Declaration, and use the same degree of care and skill in
the exercise of such rights and powers, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.




          (b) No provision of this Declaration shall be construed to relieve the Institutional Trustee
from liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:





     (i) prior to the occurrence of an Event of Default and after the curing or waiving of
all such Events of Default that may have occurred:




     (A) the duties and obligations of the Institutional Trustee shall be determined
solely by the express provisions of this Declaration and the Institutional Trustee
shall not be liable except for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee; and




     (B) in the absence of bad faith on the part of the Institutional Trustee, the
Institutional Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and substantially conforming to the
requirements of this Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to be furnished to
the Institutional Trustee, the Institutional Trustee shall be under a duty to
examine the same to determine whether or not they substantially conform to the
requirements of this Declaration;




     (ii) the Institutional Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Institutional Trustee, unless it shall be proved
that the Institutional Trustee was negligent in ascertaining the pertinent facts;




     (iii) the Institutional Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the Securities relating to the time,









 



18



method and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;




     (iv) no provision of this Declaration shall require the Institutional Trustee to expend
or risk its own funds or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity reasonably
satisfactory to the Institutional Trustee against such risk or liability is not reasonably
assured to it;




     (v) the Institutional Trustee’s sole duty with respect to the custody, safe keeping and
physical preservation of the Debentures and the Institutional Trustee Account shall be to
deal with such property in a similar manner as the Institutional Trustee deals with similar
property for its own account, subject to the protections and limitations on liability
afforded to the Institutional Trustee under this Declaration and the Trust Indenture Act;




     (vi) the Institutional Trustee shall have no duty or liability for or with respect to
the value, genuineness, existence or sufficiency of the Debentures or the payment of any
taxes or assessments levied thereon or in connection therewith;




     (vii) the Institutional Trustee shall not be liable for any interest on any money
received by it except as it may otherwise agree in writing with the Sponsor. Money held by
the Institutional Trustee need not be segregated from other funds held by it except in
relation to the Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) to the extent required by law; and




     (viii) the Institutional Trustee shall not be responsible for monitoring the compliance
by the Regular Trustees or the Sponsor with their respective duties under this Declaration,
nor shall the Institutional Trustee be liable for any act, omission, default or misconduct
of the Regular Trustees or the Sponsor.



          SECTION 3.10 Certain Rights of the Institutional Trustee.




          (a) Subject to the provisions of Section 3.9:





     (i) the Institutional Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;




     (ii) any direction or act of the Sponsor or the Regular Trustees contemplated by this
Declaration shall be sufficiently evidenced by an Officers’ Certificate;









 



19



     (iii) whenever in the administration of this Declaration, the Institutional Trustee
shall deem it desirable that a matter be proved or established before taking, suffering or
omitting any action hereunder, the Institutional Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers’ Certificate which, upon receipt of such request, shall
be promptly delivered by the Sponsor or the Regular Trustees;




     (iv) the Institutional Trustee shall have no duty to see to any recording, filing or
registration of any instrument (including any financing or continuation statement or any
filing under tax or securities laws) or any rerecording, refiling or registration thereof;




     (v) the Institutional Trustee may consult with counsel or other experts and the advice
or opinion of such counsel and experts with respect to legal matters or advice within the
scope of such experts’ area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with such advice or opinion, such counsel may be counsel to the Sponsor or
any of its Affiliates, and may include any of its employees. The Institutional Trustee shall
have the right at any time to seek instructions concerning the administration of this
Declaration from any court of competent jurisdiction;




     (vi) the Institutional Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Declaration at the request or direction of any Holder,
unless such Holder shall have provided to the Institutional Trustee security and indemnity,
reasonably satisfactory to the Institutional Trustee, against the costs, expenses (including
attorneys’ fees and expenses and the expenses of the Institutional Trustee’s agents,
nominees or custodians) and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall be
taken to relieve the Institutional Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this Declaration;




     (vii) the Institutional Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it may see fit;




     (viii) the Institutional Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, custodians, nominees
or attorneys and the Institutional Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it hereunder;




     (ix) any action taken by the Institutional Trustee or its agents hereunder shall bind
the Trust and the Holders of the Securities, and the signature of the Institutional Trustee
or its agents alone shall be sufficient and effective to perform any such action and no
third party shall be required to inquire as to the authority of the Institutional Trustee to









 



20



so act or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the Institutional Trustee’s or
its agent’s taking such action;




     (x) whenever in the administration of this Declaration the Institutional Trustee shall
deem it desirable to receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Institutional Trustee (i) may request instructions
from the Holders of the Securities which instructions may only be given by the Holders of
the same proportion in liquidation amount of the Securities as would be entitled to direct
the Institutional Trustee under the terms of the Securities in respect of such remedy, right
or action, (ii) may refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in conclusively relying
on or acting in or accordance with such instructions; and




     (xi) except as otherwise expressly provided by this Declaration, the Institutional
Trustee shall not be under any obligation to take any action that is discretionary under the
provisions of this Declaration.



          (b) No provision of this Declaration shall be deemed to impose any duty or obligation on the
Institutional Trustee to perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the
Institutional Trustee shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Institutional Trustee shall be construed to be a
duty.




          SECTION 3.11 Delaware Trustee.




          Notwithstanding any other provision of this Declaration other than Section 5.2, the Delaware
Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of
the duties and responsibilities of the Regular Trustees or the Institutional Trustee described in
this Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of the Statutory Trust
Act. In performing such limited role, the Delaware Trustee shall have all of the rights and
protections afforded to the Institutional Trustee under Section 3.9(b)(i) (except that (i) the
Delaware Trustee’s standard of care shall be gross negligence, and (ii) such rights and protections
shall pertain to the Delaware Trustee without regard to the occurrence of any Event of Default) and
Section 3.10 of this Declaration.




          SECTION 3.12 Execution of Documents.




          Unless otherwise determined by the Regular Trustees, and except as otherwise required by the
Statutory Trust Act, a majority of or, if there are only two, any Regular Trustee or, if there is
only one, such Regular Trustee is authorized to execute on behalf of the Trust any documents that
the Regular Trustees have the power and authority to execute pursuant to Section 3.6.










 



21




          SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.




          The recitals contained in this Declaration and the Securities shall be taken as the statements
of the Sponsor, and the Trustees do not assume any responsibility for their correctness. The
Trustees make no representations as to the value or condition of the property of the Trust or any
part thereof. The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.




          SECTION 3.14 Duration of Trust.




          The Trust, unless dissolved pursuant to the provisions of Article VIII hereof, shall dissolve
on the date that is [___] years after the Closing Date.




          SECTION 3.15 Mergers.




          (a) The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or
convey, transfer or lease its properties and assets substantially as an entirety to any corporation
or other body, except as described in Section 3.15(b) and (c) or in Annex I.




          (b) The Trust may, with the consent of the Regular Trustees or, if there are more than two, a
majority of the Regular Trustees and without the consent of the Holders of the Securities, the
Delaware Trustee or the Institutional Trustee, and subject to the terms of Section 3.15(c),
consolidate, amalgamate, merge with or into, or be replaced by a trust organized as such under the
laws of any State; provided that:





     (i) such successor entity (the “Successor Entity”) either:




     (A) expressly assumes all of the obligations of the Trust under the Securities;
or




     (B) substitutes for the Securities other securities having substantially the
same terms as the Preferred Securities (the “Successor Securities”) so long as the
Successor Securities rank the same as the Preferred Securities rank with respect to
Distributions and payments upon liquidation, redemption and otherwise;




     (ii) the Debenture Issuer expressly acknowledges a trustee of the Successor Entity that
possesses the same powers and duties as the Institutional Trustee as the Holder of the
Debentures;




     (iii) the Preferred Securities or any Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national securities
exchange, or with any other organization on which the Preferred Securities are then listed
or quoted;




     (iv) such merger, consolidation, amalgamation or replacement does not cause the
Preferred Securities (including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization;









 



22



     (v) such merger, consolidation, amalgamation or replacement does not adversely affect
the rights, preferences and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with respect to any dilution of
such Holders’ interests in the Successor Entity as a result of such merger, consolidation,
amalgamation or replacement);




     (vi) such Successor Entity has a purpose substantially identical to that of the Trust;




     (vii) prior to such merger, consolidation, amalgamation or replacement, the Trust has
received an opinion of a nationally recognized independent counsel to the Trust experienced
in such matters to the effect that:




     (A) such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the Holders of the Securities
(including any Successor Securities) in any material respect (other than with
respect to any dilution of the Holders’ interest in the Successor Entity);




     (B) following such merger, consolidation, amalgamation or replacement, neither
the Trust nor the Successor Entity will be required to register as an Investment
Company;




     (C) following such merger, consolidation, amalgamation or replacement, the
Trust (or the Successor Entity) will continue to be classified as a grantor trust
for United States federal income tax purposes;




     (viii) the Sponsor guarantees the obligations of such Successor Entity under the
Successor Securities at least to the extent provided by the Preferred Securities Guarantee,
and




     (ix) the Sponsor, or, subject to Section 9.1(c), a Related Party, continues to hold the
Common Securities so long as any Preferred Securities or Successor Securities remain
outstanding.



     (c) Notwithstanding Section 3.15(b), the Trust shall not, without the consent of Holders of
100% in liquidation amount of the Securities, consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it, if in the opinion of a nationally recognized independent tax counsel
experienced in such matters, such consolidation, amalgamation, merger or replacement would cause
the Trust or Successor Entity to be classified as other than a grantor trust for United States
federal income tax purposes.









 



23


ARTICLE IV

SPONSOR




          SECTION 4.1 Sponsor’s Purchase of Common Securities.




          On the Closing Date, the Sponsor will purchase all of the Common Securities issued by the
Trust at the same time as the Preferred Securities are sold.




          SECTION 4.2 Responsibilities of the Sponsor.




          In connection with the issue and sale of the Preferred Securities, the Sponsor is hereby
appointed an agent of the Trust pursuant to Section 3806(b)(7) of the Statutory Trust Act and in
such capacity shall have the exclusive right and responsibility to engage in the following
activities:




          (a) to prepare a prospectus relating to the offering of Preferred Securities by the Trust and
to prepare for filing by the Trust with the Commission, and execute on behalf of the Trust, a
registration statement on Form S-3 or on another appropriate form (including, if appropriate, a
registration statement under Rule 462(b) of the Securities Act) and any pre-effective or
post-effective amendments thereto, relating to the registration under the Securities Act of the
Preferred Securities;




          (b) to determine the States in which to take appropriate action to qualify or register for
sale of all or part of the Preferred Securities and to do any and all such acts, other than actions
which must be taken by the Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such States;




          (c) to prepare for filing by the Trust, and execute on behalf of the Trust, an application to
the New York Stock Exchange, any other national stock exchange or the Nasdaq National Market for
listing upon notice of issuance of any Preferred Securities;




          (d) to prepare for filing by the Trust with the Commission, and execute on behalf of the
Trust, a registration statement on Form 8-A, including any pre-effective or post-effective
amendments thereto, relating to the registration of the Preferred Securities under Section 12(b) or
12(g) of the Exchange Act, including any amendments thereto;




          (e) to negotiate the terms of, and execute on behalf of the Trust, the Underwriting Agreement
providing for the sale of the Preferred Securities; and




          (f) to execute and deliver letters, documents or instruments on behalf of the Trust with any
Clearing Agency.




          The Sponsor must exercise the powers set forth in this Section 4.2 in a manner that is
consistent with the purposes and functions of the Trust set out in Section 3.3, and the Sponsor
shall not take any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.










 



24




          Subject to this Section 4.2, the Sponsor shall have none of the powers or the authority of the
Institutional Trustee set forth in Section 3.8.




          SECTION 4.3 Guarantee of Payment of Trust Obligations.




          (a) Subject to the terms and conditions of this Section 4.3, the Debenture Issuer hereby
irrevocably and unconditionally guarantees to each Person to whom the Trust is now or hereafter
becomes indebted or liable (the “Beneficiaries”) the full payment, when and as due, of any and all
costs, expenses or liabilities of the Trust (other than obligations of the Trust to make payments
to Holders of a Security of the Trust pursuant to the terms thereof) (“Obligations”) to such
Beneficiaries.




          (b) The agreement of the Debenture Issuer in Section 4.3(a) is intended to be for the benefit
of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.




          (c) The agreement of the Debenture Issuer set forth in Section 4.3(a) shall terminate and be
of no further force and effect upon the later of (a) the date on which full payment has been made
of all amounts payable to all Holders of all the Preferred Securities (whether upon redemption,
liquidation, exchange or otherwise) and (b) the date on which there are no Beneficiaries remaining;
provided, however, that such agreement shall continue to be effective or shall be reinstated, as
the case may be, if at any time any Holder of Preferred Securities or any Beneficiary must restore
payment of any sums paid under the Preferred Securities, under any Obligation, under the Preferred
Securities Guarantee or under this Declaration for any reason whatsoever. Such agreement is
continuing, irrevocable, unconditional and absolute.




ARTICLE V

TRUSTEES




          SECTION 5.1 Number of Trustees.




          The number of Trustees initially shall be [four (4)], and:




          (a) at any time before the issuance of any Securities, the Sponsor may, by written instrument,
increase or decrease the number of Trustees; and




          (b) after the issuance of any Securities, the number of Trustees may be increased or decreased
by vote of the Holders of a majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities, provided, however, that, the number of
Trustees shall in no event be less than two (2); provided further that (i) if required by the
Statutory Trust Act, there shall be at least one Delaware Trustee; (ii) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (a “Regular Trustee”);
and (iii) for so long as this Declaration is required to qualify as an indenture under the Trust
Indenture Act, there shall be one Institutional Trustee, who may also serve as Delaware Trustee if
it meets the applicable requirements.










 



25




          SECTION 5.2 Delaware Trustee.




          If required by the Statutory Trust Act, one Trustee (the “Delaware Trustee”) shall be:




          (a) a natural person who is a resident of the State of Delaware; or




          (b) if not a natural person, an entity which has its principal place of business in the State
of Delaware, and otherwise meets the requirements of applicable law, provided that, if the
Institutional Trustee has its principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law, then the Institutional Trustee shall also be the Delaware
Trustee and Section 3.11 shall have no application.




          SECTION 5.3 Institutional Trustee: Eligibility.




          (a) There shall at all times be one Trustee that shall act as “Institutional Trustee” which
shall:





     (i) not be an Affiliate of the Sponsor;




     (ii) be a corporation organized and doing business under the laws of the United States
of America or any State or territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by Federal, State, territorial or District of Columbia
authority. If such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority referred to above, then
for the purposes of this Section 5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published; and




     (iii) if the Trust is excluded from the definition of an Investment Company solely by
means of Rule 3a-7 and to the extent Rule 3a-7 requires a trustee having certain
qualifications to hold title to the “eligible assets” of the Trust, the Institutional
Trustee shall possess those qualifications.



          (b) If at any time the Institutional Trustee shall cease to be eligible to so act under
Section 5.3(a), the Institutional Trustee shall immediately resign in the manner and with the
effect set forth in Section 5.6(c).




          (c) If the Institutional Trustee has or shall acquire any “conflicting interest” within the
meaning of Section 310(b) of the Trust Indenture Act, the Institutional Trustee and the Holders of
the Common Securities (as if such Holders were the obligor referred to in Section 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.










 



26




          (d) The Preferred Securities Guarantee shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the first provision contained in Section 310(b) of the
Trust Indenture Act.




          (e) The initial Institutional Trustee shall be as set forth in Section 5.5 hereof.




          SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.




          Each Regular Trustee and the Delaware Trustee (unless the Institutional Trustee also acts as
Delaware Trustee) shall be either a natural person who is at least 21 years of age or a legal
entity that shall have the power and authority to act as a trustee hereunder and shall be
represented in such capacity by one or more Authorized Officers.




          SECTION 5.5 Initial Trustees: Additional Powers of Regular Trustees.




          (a) The initial Regular Trustees shall be:




          Jay S. Benet and Matthew S. Furman [in each case] c/o The Travelers Companies, Inc., 385
Washington Street, St. Paul, Minnesota 55102




          The initial Delaware Trustee shall be:




          BNY Mellon Trust of Delaware, 100 White Clay Center, Route
273, P.O. Box 6995, Newark, Delaware 19714




          The initial Institutional Trustee shall be:




          The Bank of New York Mellon Trust Company, N.A. c/o The Bank of New York Mellon Global
Corporate Trust, Corporate Finance, 222 Berkeley Street, Boston, MA 02116




          (b) Except as expressly set forth in this Declaration and except if a meeting of the Regular
Trustees is called with respect to any matter over which the Regular Trustees have power to act,
any power of the Regular Trustees may be exercised by, or with the consent of, any one such Regular
Trustee.




          SECTION 5.6 Appointment, Removal and Resignation of Trustees.




          (a) Subject to Section 5.6(b), Trustees may be appointed or removed without cause at any time:





     (i) until the issuance of any Securities, by written instrument executed by the
Sponsor;




     (ii) after the issuance of any Securities, by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities or acting by unanimous written consent; and









 



27



     (iii) if an Event of Default shall have occurred and be continuing after the issuance
of any Preferred Securities, the Institutional Trustee and the Delaware Trustee may only be
removed and appointed by the vote of Holders of a Majority in liquidation amount of the
Preferred Securities voting as a class.



          (b) (i) The Trustee that acts as Institutional Trustee shall not be removed in accordance
with Section 5.6(a) until a successor Trustee possessing the qualifications to act as Institutional
Trustee under Section 5.3 (a “Successor Institutional Trustee”) has been appointed and has accepted
such appointment by written instrument executed by such Successor Institutional Trustee and
delivered to the Regular Trustees and the Sponsor; and





     (ii) the Trustee that acts as Delaware Trustee shall not be removed in accordance with
Section 5.6(a) until a successor Trustee possessing the qualifications to act as Delaware
Trustee under Sections 5.2 and 5.4 (a “Successor Delaware Trustee”) has been appointed and
has accepted such appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.



          (c) A Trustee appointed to office shall hold office until his successor shall have been
appointed or until his death, removal or resignation. Any Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect upon such delivery or
upon such later date as is specified therein; provided, however, that:





     (i) No such resignation of the Trustee that acts as the Institutional Trustee shall be
effective:




     (A) until a Successor Institutional Trustee has been appointed and has accepted
such appointment by instrument executed by such Successor Institutional Trustee and
delivered to the Trust, the Sponsor and the resigning Institutional Trustee; or




     (B) until the assets of the Trust have been completely liquidated and the
proceeds thereof distributed to the Holders of the Securities; and




     (ii) no such resignation of the Trustee that acts as the Delaware Trustee shall be
effective until a Successor Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee whereupon the resigning Trustee shall
be released and discharged of the trusts and other duties imposed on such Trustee in
connection herewith.



          (d) The Holders of the Common Securities shall use their best efforts to promptly appoint a
Successor Delaware Trustee or Successor Institutional Trustee as the case may be if the
Institutional Trustee or the Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.6.




          (e) If no Successor Institutional Trustee or Successor Delaware Trustee shall have been
appointed and accepted appointment as provided in this Section 5.6 within 60 days










 



28

after delivery to the Sponsor and the Trust of an instrument of resignation, the resigning
Institutional Trustee or Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Institutional Trustee or Successor Delaware Trustee, as the case may
be.




          (f) No Institutional Trustee or Delaware Trustee shall be liable for the acts or omissions to
act of any Successor Institutional Trustee or Successor Delaware Trustee, as the case may be.




          SECTION 5.7 Vacancies Among Trustees.




          If a Trustee ceases to hold office for any reason and the number of Trustees is not reduced
pursuant to Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1, a
vacancy shall occur. A resolution certifying the existence of such vacancy by the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees shall be conclusive evidence of
the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance
with Section 5.6.




          SECTION 5.8 Effect of Vacancies.




          The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity to perform the duties of a Trustee shall not operate to annul, dissolve
or terminate the Trust or terminate this Declaration. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a Regular Trustee in
accordance with Section 5.6, the Regular Trustees in office, regardless of their number, shall have
all the powers granted to the Regular Trustees and shall discharge all the duties imposed upon the
Regular Trustees by this Declaration.




          SECTION 5.9 Meetings.




          If there is more than one Regular Trustee, meetings of the Regular Trustees shall be held from
time to time upon the call of any Regular Trustee. Regular meetings of the Regular Trustees may be
held at a time and place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48 hours before such
meeting. Notice of any telephonic meetings of the Regular Trustees or any committee thereof shall
be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall contain a brief statement
of the time, place and anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the Regular Trustees may be
taken at a meeting by vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to










 



29

such matter, provided that a Quorum is present, or without a meeting by the unanimous written
consent of the Regular Trustees. In the event there is only one Regular Trustee, any and all action
of such Regular Trustee shall be evidenced by a written consent of such Regular Trustee.




          SECTION 5.10 Delegation of Power.




          (a) Any Regular Trustee may, by power of attorney consistent with applicable law, delegate to
any other natural person over the age of 21 his or her power for the purpose of executing any
documents contemplated in Section 3.6, including making any governmental filing; and




          (b) the Regular Trustees shall have power to delegate from time to time to such of their
number or to officers of the Trust the doing of such things and the execution of such instruments
either in the name of the Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.




          SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.




          Any corporation into which the Institutional Trustee or the Delaware Trustee, as the case may
be, may be merged or converted or with which either may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Institutional Trustee or the
Delaware Trustee, as the case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or the Delaware
Trustee, as the case may be, shall be the Successor Institutional Trustee or the Successor Delaware
Trustee, as the case may be, hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article V, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.




          SECTION 5.12 Status of Trustees.




          Each Trustee shall be a “United States person” within the meaning of Section 7701(a)(30) of
the Code and at all times at least one of the Trustees shall be (i) a bank, as defined in Section
581 of the Code or (ii) a United States government-owned agency or United States
government-sponsored enterprise.




ARTICLE VI

DISTRIBUTIONS




          SECTION 6.1 Distributions.




          Holders shall receive Distributions (as defined herein) in accordance with the applicable
terms of the relevant Holder’s Securities. Distributions shall be made on the Preferred Securities
and the Common Securities in accordance with the preferences set forth in their respective terms.
If and to the extent that the Debenture Issuer makes a payment of interest (including Additional
Interest (as defined in the Indenture)), premium or principal, or both, on the Debentures held by
the Institutional Trustee (the amount of any such payment being a










 



30



“Payment Amount”), the Institutional Trustee shall and is directed to make a distribution (a
“Distribution”) of the Payment Amount to Holders.




ARTICLE VII

ISSUANCE OF SECURITIES




          SECTION 7.1 General Provisions Regarding Securities.




          (a) The Trust shall issue one class of preferred securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in Annex I (the “Preferred
Securities”) and one class of common securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the “Common Securities”). The
Trust shall issue no securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.




          (b) The Certificates shall be signed on behalf of the Trust by a Regular Trustee. Such
signature shall be the manual or facsimile signature of any present or any future Regular Trustee.
In case any Regular Trustee of the Trust who shall have signed any of the Securities shall cease to
be such Regular Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the Person who signed such Certificates had
not ceased to be such Regular Trustee; and any Certificate may be signed on behalf of the Trust by
such Persons who, at the actual date of execution of such Security, shall be the Regular Trustees
of the Trust, although at the date of the execution and delivery of the Declaration any such Person
was not such a Regular Trustee. Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem appropriate, or as
may be required to comply with any law or with any rule or regulation of any stock exchange on
which Securities may be listed, or to conform to usage.




          (c) The Preferred Security Certificates shall not be valid until authenticated by the manual
signature of an authorized officer of the Institutional Trustee, the signature of whom shall be
conclusive evidence that the Preferred Security Certificates have been authenticated under this
Declaration. Upon a written order of the Trust signed by one Regular Trustee, the Institutional
Trustee shall authenticate the Preferred Security Certificates for original issue. The
Institutional Trustee may appoint an authenticating agent acceptable to the Trust to authenticate
the Preferred Security Certificates. An authenticating agent may authenticate the Preferred
Security Certificates whenever the Institutional Trustee may do so. Each reference to
authentication by the Institutional Trustee includes authentication by such agent. An
authenticating agent has the same rights as the Institutional Trustee to deal with the Sponsor or
an Affiliate thereof.




          (d) The consideration received by the Trust for the issuance of the Securities shall
constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust.










 



31




          (e) Upon issuance of the Securities as provided in this Declaration, the Securities so issued
shall be deemed to be validly issued, fully paid and non-assessable; subject to Section 10.1 with
respect to the Common Securities.




          (f) Every Person, by virtue of having become a Holder or a Preferred Security Beneficial Owner
in accordance with the terms of this Declaration, shall be deemed to have expressly assented and
agreed to the terms of, and shall be bound by, this Declaration.




          SECTION 7.2 Registrar and Paying Agent.




          The Trust shall maintain in New York, New York (i) an office or agency where Preferred
Securities may be presented for registration of transfer or for exchange (“Registrar”), and (ii) an
office or agency where Preferred Securities may be presented for payment. The Registrar shall keep
a register of the Preferred Securities and of their transfer and exchange. The Trust may appoint
the Registrar and the Paying Agent and may appoint one or more co-registrars and one or more
additional paying agents in such other locations as it shall determine. The term “Paying Agent”
includes any additional paying agent. The Trust may change any Paying Agent, Registrar or
co-registrar without prior notice to any Holder. The Trust shall notify the Institutional Trustee
of the name and address of any agent not a party to this Declaration. If the Trust fails to appoint
or maintain another entity as Registrar or Paying Agent, the Institutional Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent or Registrar. The Trust shall act
as Paying Agent, Registrar and co-registrar for the Common Securities.




          The Trust initially appoints the Institutional Trustee as Registrar and Paying Agent for the
Preferred Securities.




          SECTION 7.3 Paying Agent to Hold Money in Trust.




          The Trust shall require each Paying Agent other than the Institutional Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or the Institutional
Trustee all money held by the Paying Agent for the payment of principal or Distributions on
Securities, and will notify the Institutional Trustee if there are insufficient funds. While any
such insufficiency continues, the Institutional Trustee may require a Paying Agent to pay all money
held by it to the Institutional Trustee. The Trust at any time may require a Paying Agent to pay
all money held by it to the Institutional Trustee and to account for any money disbursed by it.
Upon payment to the Institutional Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the Trust or the Sponsor
or an Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as Paying Agent.




ARTICLE VIII

DISSOLUTION OF TRUST




          SECTION 8.1 Dissolution of Trust.




          (a) The Trust shall dissolve:










 



32





     (i) upon the bankruptcy of any Holder of the Common Securities or the Sponsor;




     (ii) upon the filing of a certificate of dissolution or its equivalent with respect to
any Holder of the Common Securities or the Sponsor; or the revocation of the Holder of the
Common Securities or the Sponsor’s charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;




     (iii) upon the entry of a decree of judicial dissolution of any Holder of the Common
Securities, the Sponsor or the Trust;




     (iv) when all of the Securities shall have been called for redemption and the amounts
necessary for redemption thereof shall have been paid to the Holders in accordance with the
terms of the Securities;




     (v) at the election of the Sponsor (which is wholly within its sole discretion);
provided that the Trust shall have been dissolved in accordance with the terms of the
Securities and all of the Debentures endorsed thereon shall have been distributed to the
Holders of Securities in exchange for all of the Securities; or




     (vi) before the issuance of any Securities, with the consent of all of the Regular
Trustees and the Sponsor.



          (b) As soon as is practicable after the occurrence of an event referred to in Section 8.1(a)
or upon the expiration of the term of the Trust set forth in Section 3.14 and the winding up of the
affairs of the Trust, the Trustees shall file a certificate of cancellation with the Secretary of
State of the State of Delaware.




          (c) The provisions of Section 3.9(b) and Article X shall survive the termination of the Trust.




ARTICLE IX

TRANSFER OF INTERESTS




          SECTION 9.1 Transfer of Securities.




          (a) Securities may only be transferred, in whole or in part, in accordance with the terms and
conditions set forth in this Declaration and in the terms of the Securities. Any transfer or
purported transfer of any Security not made in accordance with this Declaration shall be null and
void.




          (b) Subject to this Article IX, Preferred Securities shall be freely transferable.




          (c) Subject to this Article IX, the Sponsor and any Related Party may only transfer Common
Securities to the Sponsor or a Related Party of the Sponsor; provided that, any such transfer is
subject to the condition precedent that the transferor obtain the written opinion of a nationally
recognized independent counsel experienced in such matters that such transfer would not cause more
than an insubstantial risk that:










 



33





     (i) the Trust would not continue to be classified for United States federal income tax
purposes as a grantor trust; or




     (ii) the Trust would be an Investment Company or the transferee would become an
Investment Company.



          SECTION 9.2 Transfer of Certificates.




          The Registrar shall provide for the registration of Certificates representing Preferred
Securities and of transfers of such Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Registrar may require) in respect of any tax or other
government charges that may be imposed in relation to it. Upon surrender for registration of
transfer of any Certificate representing Preferred Securities, the Registrar shall cause one or
more new Certificates to be issued in the name of the designated transferee or transferees. Every
such Certificate surrendered for registration of transfer shall be accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by the Holder or such
Holder’s attorney duly authorized in writing. Each such Certificate surrendered for registration of
transfer shall be canceled by the Registrar.




          The Regular Trustees shall provide for the registration of Certificates representing Common
Securities and of transfers of such Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in respect of any tax or
other government charges that may be imposed in relation to it. Upon surrender for registration of
transfer of any such Certificate, the Regular Trustees shall cause one or more new Certificates to
be issued in the name of the designated transferee or transferees. Every Certificate representing a
Common Security surrendered for registration of transfer shall be accompanied by a written
instrument of transfer in form satisfactory to the Regular Trustees duly executed by the Holder or
such Holder’s attorney duly authorized in writing. Each such Certificate surrendered for
registration of transfer shall be canceled by the Regular Trustees.




          A transferee of a Certificate shall be entitled to the rights and subject to the obligations
of a Holder hereunder upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this Declaration.




          SECTION 9.3 Deemed Security Holders.




          The Trustees may treat the Person in whose name any Certificate shall be registered on the
books and records of the Trust as the sole Holder of such Certificate and of the Securities
represented by such Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust shall have actual or other notice thereof.




          SECTION 9.4 Book Entry Interests.




          Unless otherwise specified in the terms of the Preferred Securities, the Preferred Security
Certificates, on original issuance, will be issued in the form of one or more, fully










 



34

registered, global Preferred Security Certificates (each a “Global Certificate”), to be
delivered to DTC, the initial Clearing Agency, or its custodian, by, or on behalf of, the Trust.
Such Global Certificates shall initially be registered on the books and records of the Trust in the
name of Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security Beneficial Owner’s
interests in such Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the “Definitive Preferred Security
Certificates”) have been issued to the Preferred Security Beneficial Owners pursuant to Section
9.7:




          (a) the provisions of this Section 9.4 shall be in full force and effect;




          (b) the Trust and the Trustees shall be entitled to deal with the Clearing Agency for all
purposes of this Declaration (including the payment of Distributions on the Global Certificates and
receiving approvals, votes or consents hereunder) as the Holder of the Preferred Securities and the
sole Holder of the Global Certificates and shall have no obligation to the Preferred Security
Beneficial Owners;




          (c) to the extent that the provisions of this Section 9.4 conflict with any other provisions
of this Declaration, the provisions of this Section 9.4 shall control; and




          (d) the rights of the Preferred Security Beneficial Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the Global Certificates to such
Clearing Agency Participants. DTC will make book entry transfers among the Clearing Agency
Participants.




          SECTION 9.5 Notices to Clearing Agency.




          Whenever a notice or other communication to the Holders of Preferred Security is required
under this Declaration, unless and until Definitive Preferred Security Certificates shall have been
issued to the Preferred Security Beneficial Owners pursuant to Section 9.7, the Trustees shall give
all such notices and communications specified herein to be given to the Preferred Security Holders
to the Clearing Agency, and shall have no notice obligations to the Preferred Security Beneficial
Owners.




          SECTION 9.6 Appointment of Successor Clearing Agency.




          If any Clearing Agency elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Regular Trustees may, in their sole discretion, appoint a
successor Clearing Agency with respect to such Preferred Securities.




          SECTION 9.7 Definitive Preferred Security Certificates.




          If:










 



35




          (a) a Clearing Agency elects to discontinue its services as securities depositary with respect
to the Preferred Securities and a successor Clearing Agency is not appointed within 90 days after
such discontinuance pursuant to Section 9.6; or




          (b) the Regular Trustees elect after consultation with the Sponsor to terminate the book entry
system through the Clearing Agency with respect to the Preferred Securities, then:





     (i) Definitive Preferred Security Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such Preferred Securities; and




     (ii) upon surrender of the Global Certificates by the Clearing Agency, accompanied by
registration instructions, the Regular Trustees shall cause Definitive Certificates to be
executed, and the Institutional Trustee shall cause such Definitive Securities to be
authenticated and delivered, to Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall be liable for
any delay in delivery of such instructions and each of them may conclusively rely on, and
shall be protected in relying on, said instructions of the Clearing Agency. The Definitive
Preferred Security Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular Trustees may
deem appropriate, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock exchange on
which Preferred Securities may be listed, or to conform to usage.



          SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.




          If:




          (a) any mutilated Certificates should be surrendered to the Regular Trustees, or if the
Regular Trustees shall receive evidence to their satisfaction of the destruction, loss or theft of
any Certificate; and




          (b) there shall be delivered to the Regular Trustees such security or indemnity as may be
required by them to keep each of the Trustees harmless then, in the absence of notice that such
Certificate shall have been acquired by a Protected Purchaser (as such term is used in section
8-405(a)(1) of the UCC as in effect in the State of Delaware (1994 Rev)), any Regular Trustee on
behalf of the Trust shall execute, and, in the case of any Preferred Security, cause the
Institutional Trustee to authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like denomination. In
connection with the issuance of any new Certificate under this Section 9.8, the Regular Trustees
may require the payment of a sum sufficient to cover any tax or other governmental charge that may
be imposed in connection therewith. Any duplicate Certificate issued pursuant to this Section 9.8
shall constitute conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any
time.










 



36




ARTICLE X

LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,

TRUSTEES OR OTHERS




          SECTION 10.1 Liability.




          (a) Except as expressly set forth in this Declaration, the Preferred Securities Guarantee and
the terms of the Securities, the Sponsor shall not be:





     (i) personally liable for the return of any portion of the capital contributions (or
any return thereon) of the Holders of the Securities which shall be made solely from assets
of the Trust; and




     (ii) required to pay to the Trust or to any Holder of Securities any deficit upon
dissolution of the Trust or otherwise.



          (b) The Holder of the Common Securities shall be liable for all of the debts and obligations
of the Trust (other than with respect to the Securities) to the extent not satisfied out of the
Trust’s assets.




          (c) Pursuant to Section 3803(a) of the Statutory Trust Act, the Holders of the Preferred
Securities shall be entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law of the State of
Delaware.




          SECTION 10.2 Exculpation.




          (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise
to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified
Person’s gross negligence or willful misconduct with respect to such acts or omissions.




          (b) An Indemnified Person shall be fully protected in relying in good faith upon the records
of the Trust and upon such information, opinions, reports or statements presented to the Trust by
any Person as to matters the Indemnified Person reasonably believes are within such other Person’s
professional or expert competence and who has been selected with reasonable care by or on behalf of
the Trust, including information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be paid.










 



37




          SECTION 10.3 Fiduciary Duty.




          (a) To the extent that, at law or in equity, an Indemnified Person has duties (including
fiduciary duties) and liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the Trust or to any other
Covered Person for its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of an Indemnified
Person otherwise existing at law or in equity (other than the duties imposed on the Institutional
Trustee under the Trust Indenture Act), are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person.




          (b) Unless otherwise expressly provided herein:





     (i) whenever a conflict of interest exists or arises between any Covered Person and any
Indemnified Person; or




     (ii) whenever this Declaration or any other agreement contemplated herein or therein
provides that an Indemnified Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Trust or any Holder of Securities, the Indemnified Person
shall resolve such conflict of interest, take such action or provide such terms, considering
in each case the relative interest of each party (including its own interest) to such
conflict, agreement, transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable generally
accepted accounting practices or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or term so made, taken or provided by the Indemnified Person
shall not constitute a breach of this Declaration or any other agreement contemplated herein
or of any duty or obligation of the Indemnified Person at law or in equity or otherwise.



          (c) Whenever in this Declaration an Indemnified Person is permitted or required to make a
decision:





     (i) in its “discretion” or under a grant of similar authority, the Indemnified Person
shall be entitled to consider such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any consideration to any interest of
or factors affecting the Trust or any other Person; or




     (ii) in its “good faith” or under another express standard, the Indemnified Person
shall act under such express standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.



          SECTION 10.4 Indemnification.




          (a) (i) The Debenture Issuer shall indemnify, to the full extent permitted by law, any
Company Indemnified Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the Trust) by reason of
the fact that he is or was a Company Indemnified Person against expenses (including attorneys










 



38

fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that
the Company Indemnified Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.





     (ii) The Debenture Issuer shall indemnify, to the full extent permitted by law, any
Company Indemnified Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys’ fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best interests of the
Trust and except that no such indemnification shall be made in respect of any claim, issue
or matter as to which such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which such Court of
Chancery or such other court shall deem proper.




     (iii) To the extent that a Company Indemnified Person shall be successful on the merits
or otherwise (including dismissal of an action without prejudice or the settlement of an
action without admission of liability) in defense of any action, suit or proceeding referred
to in paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any claim, issue or
matter therein, he shall be indemnified, to the full extent permitted by law, against
expenses (including attorneys’ fees) actually and reasonably incurred by him in connection
therewith.




     (iv) Any indemnification under paragraphs (i) and (ii) of this Section 10.4(a) (unless
ordered by a court) shall be made by the Debenture Issuer only as authorized in the specific
case upon a determination that indemnification of the Company Indemnified Person is proper
in the circumstances because he has met the applicable standard of conduct set forth in
paragraphs (i) and (ii). Such determination shall be made (1) by the Regular Trustees by a
majority vote of a Quorum consisting of such Regular Trustees who were not parties to such
action, suit or proceeding, (2) if such a Quorum is not obtainable, or, even if obtainable,
if a Quorum of disinterested Regular Trustees so directs, by independent legal counsel in a
written opinion, or (3) by the Common Security Holder of the Trust.




     (v) Expenses (including attorneys’ fees) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by









 



39



the Debenture Issuer in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Company Indemnified Person
to repay such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section 10.4(a). Notwithstanding
the foregoing, no advance shall be made by the Debenture Issuer if a determination is
reasonably and promptly made (i) by the Regular Trustees by a majority vote of a Quorum of
disinterested Regular Trustees, (ii) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Regular Trustees, counsel or the Common Security Holder at the
time such determination is made, such Company Indemnified Person acted in bad faith or in a
manner that such Person did not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no event shall any
advance be made in instances where the Regular Trustees, independent legal counsel or Common
Security Holder reasonably determine that such Person deliberately breached his duty to the
Trust or its Common or Preferred Security Holders.




     (vi) The indemnification and advancement of expenses provided by, or granted pursuant
to, the other paragraphs of this Section 10.4(a) shall not be deemed exclusive of any other
rights to which those seeking indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested directors of the Debenture Issuer
or Preferred Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be provided by a contract
between the Debenture Issuer and each Company Indemnified Person who serves in such capacity
at any time while this Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then existing.




     (vii) The Debenture Issuer may purchase and maintain insurance on behalf of any Person
who is or was a Company Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such, whether or not
the Debenture Issuer would have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).




     (viii) For purposes of this Section 10.4(a), references to the “Trust” shall include,
in addition to the resulting or surviving entity, any constituent entity (including any
constituent of a constituent) absorbed in a consolidation or merger, so that any Person who
is or was a director, trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee, officer, employee
or agent of another entity, shall stand in the same position under the provisions of this
Section 10.4(a) with respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had continued.









 



40



     (ix) The indemnification and advancement of expenses provided by, or granted pursuant
to, this Section 10.4(a) shall, unless otherwise provided when authorized or ratified,
continue as to a Person who has ceased to be a Company Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of such a Person.



          (b) The Sponsor agrees to indemnify (i) the Institutional Trustee, (ii) the Delaware Trustee,
(iii) any Affiliate of the Institutional Trustee and the Delaware Trustee, and (iv) any officers,
directors, shareholders, members, partners, employees, representatives, custodians, nominees or
agents of the Institutional Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a “Fiduciary Indemnified Person”) for, and to hold each Fiduciary
Indemnified Person harmless against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or administration or the
trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify
as set forth in this Section 10.4(b) shall survive the resignation or removal of the Institutional
Trustee or the Delaware Trustee, the satisfaction and discharge of this Declaration and the
termination of the Trust.




          (c) The Sponsor agrees to pay the Institutional Trustee and the Delaware Trustee, from time to
time, such compensation for all services rendered by the Institutional Trustee and the Delaware
Trustee hereunder as may be mutually agreed upon in writing by the Sponsor and the Institutional
Trustee or the Delaware Trustee, as the case may be, and except as otherwise expressly provided
herein, to reimburse the Institutional Trustee and the Delaware Trustee upon its or their request
for all reasonable expenses (including counsel fees and expenses), disbursements and advances
incurred or made by the Institutional Trustee or the Delaware Trustee, as the case may be, in
accordance with the provisions of this Declaration, except any such expense, disbursement or
advance as may be attributable to its or their negligence or bad faith.




          SECTION 10.5 Outside Businesses.




          Any Covered Person, the Sponsor, the Delaware Trustee and the Institutional Trustee (subject
to Section 5.3(c)) may engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business of the Trust, and
the Trust and the Holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and the pursuit of any
such venture, even if competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, or the Institutional Trustee shall
be obligated to present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act










 



41

as depositary for, trustee or agent for, or act on any committee or body of holders of,
securities or other obligations of the Sponsor or its Affiliates.




ARTICLE XI

ACCOUNTING




          SECTION 11.1 Fiscal Year.




          The fiscal year (“Fiscal Year”) of the Trust shall be the calendar year, or such other year as
is required by the Code.




          SECTION 11.2 Certain Accounting Matters.




          (a) At all times during the existence of the Trust, the Regular Trustees shall keep, or cause
to be kept, full books of account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting principles of the
United States, consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes.




          (b) The Regular Trustees shall cause to be prepared and delivered to each of the Holders of
Securities, within 90 days after the end of each Fiscal Year of the Trust, annual financial
statements of the Trust, including a balance sheet of the Trust as of the end of such Fiscal Year,
and the related statements of income or loss.




          (c) The Regular Trustees shall cause to be duly prepared and delivered to each of the Holders
of Securities, any annual United States federal income tax information statement, required by the
Code, containing such information with regard to the Securities held by each Holder as is required
by the Code and the Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver all such statements
within 30 days after the end of each Fiscal Year of the Trust.




          (d) The Regular Trustees shall cause to be duly prepared and filed with the appropriate taxing
authority, an annual United States federal income tax return, on a Form 1041 or such other form
required by United States federal income tax law, and any other annual income tax returns required
to be filed by the Regular Trustees on behalf of the Trust with any state or local taxing
authority.




          SECTION 11.3 Banking.




          The Trust shall maintain one or more bank accounts in the name and for the sole benefit of the
Trust; provided, however, that all payments of funds in respect of the Debentures held by the
Institutional Trustee shall be made directly to the Institutional Trustee Account and no other
funds of the Trust shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided, however, that the
Institutional Trustee shall designate the signatories for the Institutional Trustee Account.










 



42




          SECTION 11.4 Withholding.




          The Regular Trustees shall, and shall cause the Trust to, comply with all withholding
requirements under United States federal, state and local law. The Trust shall request, and the
Holders shall provide to the Trust, such forms or certificates as are necessary to establish an
exemption from withholding with respect to each Holder, and any representations and forms as shall
reasonably be requested by the Trust to assist it in determining the extent of, and in fulfilling,
its withholding obligations. The Regular Trustees shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established by a Holder, shall
remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that
the Trust is required to withhold and pay over any amounts to any authority with respect to
Distributions or allocations to any Holder, the amount withheld shall be deemed to be a
Distribution in the amount of the withholding to the Holder. In the event of any claimed over
withholding, Holders shall be limited to an action against the applicable jurisdiction. If the
amount required to be withheld was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such withholding.




ARTICLE XII

AMENDMENTS AND MEETINGS




          SECTION 12.1 Amendments.




          (a) Except as otherwise provided in this Declaration or by any applicable terms of the
Securities, this Declaration may only be amended by a written instrument approved and executed by:





     (i) the Regular Trustees (or, if there are more than two Regular Trustees a majority of
the Regular Trustees);




     (ii) if the amendment affects the rights, powers, duties, obligations or immunities of
the Institutional Trustee, the Institutional Trustee; and




     (iii) if the amendment affects the rights, powers, duties, obligations or immunities of
the Delaware Trustee, the Delaware Trustee;



          (b) no amendment shall be made, and any such purported amendment shall be void and
ineffective:





     (i) unless, in the case of any proposed amendment, the Institutional Trustee shall have
first received an Officers’ Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this Declaration (including the
terms of the Securities);




     (ii) unless, in the case of any proposed amendment which affects the rights, powers,
duties, obligations or immunities of the Institutional Trustee, the Institutional Trustee
shall have first received:









 



43



     (A) an Officers’ Certificate from each of the Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this Declaration (including
the terms of the Securities); and




     (B) an opinion of counsel (who may be counsel to the Sponsor or the Trust) that
such amendment is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities); and




     (iii) to the extent the result of such amendment would be to:




     (A) cause the trust to fail to continue to be classified for purposes of United
States federal income taxation as a grantor trust;




     (B) reduce or otherwise adversely affect the powers of the Institutional
Trustee in contravention of the Trust Indenture Act; or




     (C) cause the Trust to be deemed to be an Investment Company required to be
registered under the Investment Company Act;



          (c) at such time after the Trust has issued any Securities that remain outstanding, any
amendment that would adversely affect the rights, privileges or preferences of any Holder of
Securities may be effected only with such additional requirements as may be set forth in the terms
of such Securities;




          (d) Section 9.1(c) and this Section 12.1 shall not be amended without the consent of all of
the Holders of the Securities;




          (e) Article IV shall not be amended without the consent of the Holders of a Majority in
liquidation amount of the Common Securities and;




          (f) the rights of the Holders of the Common Securities under Article V to increase or decrease
the number of, and appoint and remove Trustees shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities; and




          (g) subject to Section 12.1(c), this Declaration may be amended without the consent of the
Holders of the Securities to:





     (i) cure any ambiguity;




     (ii) correct or supplement any provision in this Declaration that may be defective or
inconsistent with any other provision of this Declaration;




     (iii) add to the covenants, restrictions or obligations of the Sponsor;




     (iv) to conform to any change in Rule 3a-5 or written change in interpretation or
application of Rule 3a-5 by any legislative body, court, government agency or









 



44



regulatory authority which amendment does not have a material adverse effect on the
right, preferences or privileges of the Holders; and




     (v) to modify, eliminate and add to any provision of the Declaration to such extent as
may be reasonably necessary to effectuate any of the foregoing or to otherwise comply with
applicable law.



          (h) In addition to and notwithstanding any other provision in this Declaration, without the
consent of each affected Holder (such consent being obtained in accordance with this Declaration),
this Declaration may not be amended to (i) change the amount or timing of any Distribution on the
Securities or otherwise adversely affect the amount of any Distribution required to be made in
respect of the Securities as of a specified date; (ii) change any of the conversion or redemption
provisions; or (iii) restrict the right of a Holder to institute suit for the enforcement of any
such payment on or after such date.




          SECTION 12.2 Meetings of the Holders of Securities: Action by Written Consent.




          (a) Meetings of the Holders of any class of Securities may be called at any time by the
Regular Trustees (or as provided in the terms of the Securities) to consider and act on any matter
on which Holders of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of Securities representing at least 25%
in liquidation amount of such class of Securities. Such direction shall be given by delivering to
the Regular Trustees one or more calls in a writing stating that the signing Holders of Securities
wish to call a meeting and indicating the general or specific purpose for which the meeting is to
be called. Any Holders of Securities calling a meeting shall specify in writing the Security
Certificates held by the Holders of Securities exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.




          (b) Except to the extent otherwise provided in the terms of the Securities, the following
provisions shall apply to meetings of Holders of Securities:





     (i) notice of any such meeting shall be given to all the Holders of Securities having a
right to vote thereat at least 7 days but not more than 60 days before the date of such
meeting. Whenever a vote, consent or approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or approval may be given
at a meeting of the Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by the Holders of Securities owning not less than the minimum
amount of Securities in liquidation amount that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having a right to vote thereon were
present and voting. Prompt notice of the taking of action without a meeting shall be given
to the Holders of Securities entitled to vote who









 



45



have not consented in writing. The Regular Trustees may specify that any written ballot
submitted to the Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular Trustees;




     (ii) each Holder of a Security may authorize any Person to act for it by proxy on all
matters in which a Holder of Securities is entitled to participate, including waiving notice
of any meeting, or voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a Delaware corporation;




     (iii) each meeting of the Holders of the Securities shall be conducted by the Regular
Trustees or by such other Person that the Regular Trustees may designate; and




     (iv) unless the Statutory Trust Act, this Declaration, the terms of the Securities, the
Trust Indenture Act or the listing rules of any stock exchange or market on which the
Preferred Securities are then listed or traded, otherwise provides, the Regular Trustees, in
their sole discretion, shall establish all other provisions relating to meetings of Holders
of Securities, including notice of the time, place or purpose of any meeting at which any
matter is to be voted on by any Holders of Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record date, Quorum requirements, voting
in person or by proxy or any other matter with respect to the exercise of any such right to
vote.



ARTICLE XIII

REPRESENTATIONS OF INSTITUTIONAL TRUSTEE

AND DELAWARE TRUSTEE




          SECTION 13.1 Representations and Warranties of Institutional Trustee.




          The Trustee that acts as initial Institutional Trustee represents and warrants to the Trust
and to the Sponsor at the date of this Declaration, and each Successor Institutional Trustee
represents and warrants to the Trust and the Sponsor at the time of the Successor Institutional
Trustee’s acceptance of its appointment as Institutional Trustee that:




          (a) the Institutional Trustee is a New York banking corporation with trust powers, duly
organized, validly existing and in good standing under the laws of the State of New York, with
trust power and authority to execute and deliver, and to carry out and perform its obligations
under the terms of, the Declaration;




          (b) the execution, delivery and performance by the Institutional Trustee of the Declaration
has been duly authorized by all necessary corporate action on the part of the Institutional
Trustee. The Declaration has been duly executed and delivered by the Institutional Trustee, and it
constitutes a legal, valid and binding obligation of the Institutional Trustee,










 



46

enforceable against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting creditors’ rights
generally and to general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity or at law);




          (c) the execution, delivery and performance of the Declaration by the Institutional Trustee
does not conflict with or constitute a breach of the Articles of Incorporation or by-laws of the
Institutional Trustee; and




          (d) no consent, approval or authorization of, or registration with or notice to, any State or
Federal banking authority governing the banking or trust powers of the Institutional Trustee is
required for the execution, delivery or performance by the Institutional Trustee, of the
Declaration.




          SECTION 13.2 Representations and Warranties of Delaware Trustee.




          The Trustee that acts as initial Delaware Trustee represents and warrants to the Trust and to
the Sponsor at the date of this Declaration, and each Successor Delaware Trustee represents and
warrants to the Trust and the Sponsor at the time of the Successor Delaware Trustee’s acceptance of
its appointment as Delaware Trustee that:




          (a) The Delaware Trustee is a national banking association with trust powers, duly organized,
validly existing and in good standing under the laws of the State of Delaware, with trust power and
authority to execute and deliver, and to carry out and perform its obligations under the terms of,
the Declaration.




          (b) The Delaware Trustee has been authorized to perform its obligations under the Certificate
of Trust and the Declaration. The Declaration under Delaware law constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency, and other similar laws
affecting creditors’ rights generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is considered in a proceeding in
equity or at law).




          (c) No consent, approval or authorization of, or registration with or notice to, any State or
Federal banking authority governing the banking or trust powers of the Institutional Trustee is
required for the execution, delivery or performance by the Delaware Trustee of the Declaration.




          (d) The Delaware Trustee has its principal place of business in the State of Delaware.










 



47


ARTICLE XIV

MISCELLANEOUS




          SECTION 14.1 Notices.




          All notices provided for in this Declaration shall be in writing, duly signed by the party
giving such notice, and shall be delivered, telecopied or mailed by registered or certified mail,
as follows:




          (a) if given to the Trust, in care of the Regular Trustees at the Trust’s mailing address set
forth below (or such other address as the Trust may give notice of to the Institutional Trustee,
the Delaware Trustee and the Holders of the Securities):



Travelers Capital Trust [II] [III] [IV] [V]

c/o The Travelers Companies, Inc.

385 Washington Street

St. Paul, Minnesota 55102

Attention: Matthew S. Furman

With a copy to: Treasurer




          (b) if given to the Delaware Trustee, at the mailing address set forth below (or such other
address as Delaware Trustee may give notice of to the Holders of the Securities):



BNY
Mellon Trust of Delaware

100 White Clay Center, Route 273 P.O. Box 6995

Newark, Delaware 19714




          (c) if given to the Institutional Trustee, at its Corporate Trust Office (or such other
address as the Institutional Trustee may give notice of to the Holders of the Securities):



The Bank of New York Mellon Trust Company, N.A.

c/o The Bank of New York Mellon

Global Corporate Trust

Corporate Finance

222 Berkeley Street

Boston, MA 02216




          (d) if given to the Holder of the Common Securities, at the mailing address of the Sponsor set
forth below (or such other address as the Holder of the Common Securities may give notice of to the
Trust):



The Travelers Companies, Inc.

385 Washington Street

St. Paul, Minnesota 55102

Attention: Matthew S. Furman

With a copy to: Treasurer










 



48




          (e) if given to any other Holder, at the address set forth on the books and records of the
Trust.




          All such notices shall be deemed to have been given when received in person, telecopied with
receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.




          SECTION 14.2 Governing Law.




          This Declaration and the rights of the parties hereunder shall be governed by and interpreted
in accordance with the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws.




          SECTION 14.3 Intention of the Parties.




          It is the intention of the parties hereto that the Trust be classified for United States
federal income tax purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.




          SECTION 14.4 Headings.




          Headings contained in this Declaration are inserted for convenience of reference only and do
not affect the interpretation of this Declaration or any provision hereof




          SECTION 14.5 Successors and Assigns.




          Whenever in this Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and agreements in this
Declaration by the Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.




          SECTION 14.6 Partial Enforceability.




          If any provision of this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the application of such
provision to Persons or circumstances other than those to which it is held invalid, shall not be
affected thereby.




          SECTION 14.7 Counterparts.




          This Declaration may contain more than one counterpart of the signature page and this
Declaration may be executed by the affixing of the signature of each of the parties hereto to one
of such counterpart signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the signers had signed a
single signature page.










 



49




          IN WITNESS WHEREOF, the undersigned has caused these presents to be executed as of the day and
year first above written.




	 	 	 	 	 	 	 
	 	 	[          ], as Regular Trustee	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	[          ], as Regular Trustee	 	 
	 
	 	 	 	 	 	 
	 	 	BNY Mellon Trust of Delaware, as Delaware Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

[          ]
	 	 
	 

	 	Title:
	 	[          ]	 	 
	 
	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as
Institutional

Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	[          ]	 	 
	 

	 	Title:
	 	[          ]	 	 












 



50


	 	 	 	 	 	 	 
	 	 	THE TRAVELERS COMPANIES, INC., as 

Sponsor and
Debenture Issuer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Matthew S. Furman	 	 
	 

	 	Title:
	 	Senior Vice President	 	 












 



51


ANNEX I


TERMS OF


[ ]% TRUST PREFERRED SECURITIES


[ ]% TRUST COMMON SECURITIES




          Pursuant to Section 7.1 of the Second Amended and Restated Declaration of Trust, dated as of
[                    , 200_] (as amended from time to time, the “Declaration”), the designation, rights,
privileges, restrictions, preferences and other terms and provisions of the Preferred Securities
and the Common Securities are set out below (each capitalized term used but not defined herein has
the meaning set forth in the Declaration or, if not defined in such Declaration, as defined in the
Prospectus referred to below):




     1. Designation and Number.



          (a) Preferred Securities. [                     (                    )] Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of [                    ] dollars [($
)] and a liquidation amount with respect to the assets of the Trust of [$ ] per preferred
security, are hereby designated for the purposes of identification only as “[ ]% Trust Preferred
Securities” (the “Preferred Securities”). The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form of Exhibit A-1 to the Declaration, with
such changes and additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice or to conform to the rules of any stock exchange on which the Preferred
Securities are listed.




          (b) Common Securities. [                     (                    )] Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of [                    ] dollars [($                    )] and a
liquidation amount with respect to the assets of the Trust of [$ ] per common security, are hereby
designated for the purposes of identification only as “[ ]% Trust Common Securities” (the “Common
Securities”). The Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or practice.




     2. Distributions.



          (a) Distributions payable on each Security will be fixed at a rate per annum of [ ]% (the
“Coupon Rate”) of the stated liquidation amount of [$ ] per Security, such rate being the rate of
interest payable on the Debentures to be held by the Institutional Trustee. Distributions in
arrears beyond the first date such Distributions are payable (or would be payable if not for any
Extension Period (as defined below) or default by the Debenture Issuer on the Debentures) will bear
interest thereon at the Coupon Rate compounded quarterly (to the extent permitted by applicable
law) from the relevant payment date for such Distributions. The term “Distributions” as used herein
includes such cash distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of the Debentures held
by the Institutional Trustee and to the extent the Institutional










 



52

Trustee has funds available therefor. The amount of Distributions payable for any period will
be computed for any full quarterly Distribution period on the basis of a 360-day year consisting of
twelve 30-day months. Distributions payable for any period shorter than a full quarterly
Distribution period for which Distributions are computed will be computed on the basis of a 30-day
month and, for periods of less than one month, the actual number of days elapsed during such month.




          (b) Distributions on the Securities will be cumulative, will accrue from and including [          
, 200_], and will be payable quarterly in arrears, on [          ], [          ],
[          ] and [          ] of each year, commencing on [          ,
200_]. When, as and if available for payment, Distributions will be made by the Institutional
Trustee, except as otherwise described below. The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures by extending each interest payment period
from time to time on the Debentures for a period not exceeding 20 consecutive quarterly periods
(each an “Extension Period”), during which Extension Period no interest shall be due and payable on
the Debentures, provided that no Extension Period may extend beyond the date of maturity or
prepayment of the Debentures. As a consequence of the Debenture Issuer’s extension of the interest
payment period, Distributions will also be deferred. Despite such deferral, quarterly Distributions
will continue to accrue with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly (to the extent permitted by applicable law) from the relevant
payment date for such Distribution during any such Extension Period. In the event that the
Debenture Issuer exercises its right to extend the interest payment period, then (a) the Debenture
Issuer shall not declare or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its capital stock or make
any guarantee payment with respect thereto (other than (i) repurchases, redemptions or other
acquisitions of shares of capital stock of Travelers in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of employees, officers, directors
or consultants, (ii) repurchases, redemptions or other acquisitions of shares of capital stock of
Travelers or such subsidiary as a result of an exchange or conversion of any class or series of
capital stock of Travelers for any other class or series of the capital stock of Travelers or such
subsidiary’s, (iii) the purchase of fractional interests in shares of capital stock of Travelers
pursuant to the conversion or exchange provisions of such capital stock or the security being
converted or exchanged, or (iv) distributions of rights under any shareholders’ rights plan adopted
by Travelers or such subsidiary) and (b) the Debenture Issuer shall not make any payment of
interest on or principal of (or premium, if any, on), or repay, repurchase or redeem, any debt
securities issued by the Debenture Issuer or its subsidiaries that rank pari passu with or junior
to the Debentures. The foregoing, however, will not apply to any stock dividends paid by Travelers
where the dividend stock is the same stock as that on which the dividend is being paid. Prior to
the termination of any such Extension Period, the Debenture Issuer may further extend such
Extension Period; provided that such Extension Period, together with all such previous and further
extensions thereof, may not exceed 20 quarterly periods; provided, further, that no Extension
Period may extend beyond the maturity of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the first record date
after the end of the Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements. The Regular Trustees will give notice to










 



53

each Holder of any Extension Period upon their receipt of notice thereof from the Debenture
Issuer.




          (c) Distributions on the Securities will be payable to the Holders thereof as they appear on
the books and records of the Trust at the close of business on the relevant record dates. While the
Preferred Securities remain in book-entry only form, the relevant record dates shall be one
Business Day prior to the relevant payment dates which payment dates shall correspond to the
interest payment dates on the Debentures. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Preferred Securities will be
made as described under the heading “Book-Entry Issuance” in the Prospectus, dated [          
, 200  ] (the “Prospectus”), of the Trust included in the Registration Statement on
Form S-3 of the Sponsor and the Trust. The relevant record dates for the Common Securities shall be
the same record date as for the Preferred Securities. If the Preferred Securities shall not
continue to remain in book-entry only form, the relevant record dates for the Preferred Securities
shall conform to the rules of any securities exchange on which the securities are listed and, if
none, shall be selected by the Regular Trustees, which dates shall be at least 14 days but no more
than 60 days before the relevant payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the Debenture Issuer having failed
to make a payment under the Debentures (other than while an Extension Period shall be continuing),
will cease to be payable to the Person in whose name such Securities are registered on the relevant
record date, and such defaulted Distribution will instead be payable to the Person in whose name
such Securities are registered on the special record date or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the same force and
effect as if made on such Distribution payment date.




          (d) In the event that there is any money or other property held by or for the Trust that is
not accounted for hereunder, such property shall be distributed Pro Rata (as defined herein) among
the Holders of the Securities.




     3. Liquidation Distribution Upon Dissolution.



          In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the
Trust, the Holders of the Securities on the date of the liquidation, dissolution or winding-up, as
the case may be, will be entitled to receive out of the assets of the Trust available for
distribution to Holders of Securities after satisfaction of liabilities of creditors, distributions
in cash or other immediately available funds in an amount equal to the aggregate of the stated
liquidation amount of [$ ] per Security plus accrued and unpaid Distributions thereon to the date
of payment (such amount being the “Liquidation Distribution”), unless, in connection with such
liquidation, dissolution, or winding-up, Debentures in an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate equal to the Coupon Rate, and bearing
accrued and unpaid interest in an amount equal to the accrued and unpaid Distributions










 



54

on, such Securities outstanding at such time, have been distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities.




          If, upon any such liquidation, dissolution, or winding-up the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the Securities shall be
paid on a Pro Rata basis, as such term is defined in Section 8 below.




     4. Redemption and Distribution.



          (a) Upon the repayment of the Debentures in whole or in part, whether at maturity or upon
redemption (either at the option of the Debenture Issuer or pursuant to a Special Event, as
described below), the proceeds from such repayment or payment shall be simultaneously applied to
redeem Securities having an aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so repaid or redeemed at a redemption price equal to the proceeds from such
repayment or redemption of the Debentures (the “Redemption Price”). Holders shall be given not less
than 30 nor more than 60 days notice of such redemption.




          (b) If fewer than all the outstanding Securities are to be so redeemed, the Securities will be
redeemed Pro Rata and the Preferred Securities to be redeemed will be as described in Section
4(h)(ii) below.




          (c) The Debenture Issuer shall have the right, at any time, to dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Institutional Trustee, having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate, and with accrued and unpaid interest equal to accrued and unpaid
Distributions on, the Securities outstanding at such time, to be distributed to the Holders of the
Securities in liquidation of such Holders’ interests in the Trust on a Pro Rata basis.




          (d) The Debenture Issuer shall have the right (subject to the conditions set forth in the
Indenture) to elect to prepay the Debentures, in whole or in part, at any time on or after [     
, 200  ], and, simultaneous with such prepayment, to cause a Like Amount (as
defined below) of the Debentures to be redeemed by the Trust at the Optional Redemption Price on a
Pro Rata basis.




          “Like Amount” means, with respect to a redemption of the Securities, Securities having a
stated liquidation amount equal to the principal amount of Debentures to be paid in accordance with
their terms.




          “Optional Redemption Price” means an amount equal to 100% of the stated liquidation amount of
the Securities to be redeemed by the Trust plus accumulated and unpaid Distributions thereon, if
any to the date of such redemption.




          (e) The Debenture Issuer shall have the right, upon not less than 30 nor more than 60 days
notice, to redeem the Debentures, in whole but not in part, for cash within 90 days following the
occurrence of a Tax Event or an Investment Company Event (each as defined below, and each a
“Special Event”), and, following such redemption, Securities with an










 



55

aggregate liquidation amount equal to the aggregate principal amount of the Debentures so
redeemed shall be redeemed by the Trust at the Redemption Price on a Pro Rata basis.




          “Tax Event” means that the Regular Trustees shall have received an opinion of a nationally
recognized independent tax counsel experienced in such matters (a “Tax Event Opinion”) to the
effect that, as a result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or (b) as a result of any official
administrative pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or decision is announced
on or after the date of the original issuance of the Securities there is more than an insubstantial
risk that (i) the Trust is, or will be within 90 days of the date of such opinion, subject to
United States federal income tax with respect to income accrued or received on the Debentures, (ii)
the Trust is, or, within 90 days of the date of such opinion, will be subject to more than a de
minimis amount of other taxes, duties or other governmental charges, or (iii) interest payable to
the Trust on the Debentures is not or will not, within 90 days of the date of such opinion, be
deductible, in whole or in part, by the Debenture Issuer for United States federal income tax
purposes.




          “Investment Company Event” means that the Regular Trustees shall have received an opinion of a
nationally recognized independent counsel experienced in practice under the Investment Company Act
(an “Investment Company Event Opinion”) to the effect that, as a result of (a) an amendment to or a
change (including any announced prospective change) in law or regulation of the United States or
any rules, guidelines or policies of any applicable regulatory authority for the Debenture Issuer,
or (b) as a result of any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or which pronouncement
or decision is announced on or after the date of the original issuance of the Securities, there is
a more than an insubstantial risk that the Trust is or will be considered, within 90 days of the
date of such opinion, an Investment Company which is required to be registered under the Investment
Company Act.




          On and from the date fixed by the Regular Trustees for any distribution of Debentures and
dissolution of the Trust: (i) the Securities will no longer be deemed to be outstanding, (ii) DTC
or its nominee (or any successor Clearing Agency or its nominee), as the record Holder of the
Preferred Securities, will receive a registered global certificate or certificates representing the
Debentures to be delivered upon such distribution and (iii) any certificates representing
Securities, except for certificates representing Preferred Securities held by DTC or its nominee
(or any successor Clearing Agency or its nominee), will be deemed to represent beneficial interests
in the Debentures having an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on such Securities until such certificates are presented
to the Debenture Issuer or its agent for transfer or reissue.




          (f) The Trust may not redeem fewer than all the outstanding Securities unless all accrued and
unpaid Distributions have been paid on all Securities for all quarterly Distribution periods
terminating on or before the date of redemption.










 



56




          (g) If the Debentures are distributed to Holders of the Securities, pursuant to the terms of
the Indenture, the Debenture Issuer will use its best efforts to have the Debentures listed on the
New York Stock Exchange or on such other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Debentures.




          (h) Redemption or Distribution procedures will be as follows:





     (i) Notice of any redemption of, or notice of distribution of Debentures in exchange
for the Securities (a “Redemption/Distribution Notice”) will be given by the Trust by mail
to each Holder of Securities to be redeemed or exchanged not fewer than 30 nor more than 60
days before the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 4(h)(i), a Redemption/ Distribution Notice shall be deemed to be
given on the day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be addressed to the Holders
of Securities at the address of each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/ Distribution Notice or in the mailing of either thereof
with respect to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.




     (ii) In the event that fewer than all the outstanding Securities are to be redeemed,
the Securities to be redeemed shall be redeemed Pro Rata from each Holder of Preferred
Securities, it being understood that, in respect of Preferred Securities registered in the
name of and held of record by DTC or its nominee (or any successor Clearing Agency or its
nominee) or any nominee, the distribution of the proceeds of such redemption will be made to
each Clearing Agency Participant (or Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied by such agency or nominee.




     (iii) If Securities are to be redeemed and the Trust gives a Redemption/Distribution
Notice, which notice may only be issued if the Debentures are redeemed as set out in this
Section 4 (which notice will be irrevocable), then (A) while the Preferred Securities are in
book-entry only form, with respect to the Preferred Securities, by 12:00 noon, New York City
time, on the redemption date, provided, that the Debenture Issuer has paid the Institutional
Trustee a sufficient amount of cash in connection with the related redemption or maturity of
the Debentures, the Institutional Trustee will deposit irrevocably with DTC or its nominee
(or successor Clearing Agency or its nominee) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give DTC (or any
successor Clearing Agency) irrevocable instructions and authority to pay the Redemption
Price to the Preferred Security Beneficial Owners, and (B) with respect to Preferred
Securities issued in definitive form and Common Securities, provided that the Debenture
Issuer has paid the Institutional Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Institutional Trustee will pay the
relevant Redemption Price to the Holders of such Securities by check mailed to the address
of the









 



57



relevant Holder appearing on the books and records of the Trust on the redemption date.
If a Redemption/Distribution Notice shall have been given and funds deposited as required,
if applicable, then immediately prior to the close of business on the date of such deposit,
or on the redemption date, as applicable, Distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such Securities so called
for redemption will cease, except the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption Price. Neither the Regular
Trustees nor the Trust shall be required to register or cause to be registered the transfer
of any Securities that have been so called for redemption. If any date fixed for redemption
of Securities is not a Business Day, then payment of the Redemption Price payable on such
date will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of any Securities is improperly
withheld or refused and not paid either by the Institutional Trustee or by the Sponsor as
guarantor pursuant to the Preferred Securities Guarantee, Distributions on such Securities
will continue to accrue from the original redemption date to the actual date of payment, in
which case the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.




     (iv) Redemption/Distribution Notices shall be sent by the Regular Trustees on behalf of
the Trust to (A) in respect of the Preferred Securities, DTC or its nominee (or any
successor Clearing Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holder thereof, and (B)
in respect of the Common Securities to the Holder thereof.




     (v) Subject to the foregoing and applicable law (including, without limitation, United
States federal securities laws), the Debenture Issuer or its Affiliates may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the open market or
by private agreement.



     5. Voting Rights — Preferred Securities.




          (a) Except as provided under Sections 5(b) and 7 and as otherwise required by law and the
Declaration, the Holders of the Preferred Securities will have no voting rights.




          (b) Subject to the requirements set forth in this paragraph, the Holders of a Majority in
aggregate liquidation amount of the Preferred Securities, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Debentures, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercise any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive any past Event of
Default that is waivable under the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or (iv) consent to
any










 



58

amendment, modification or termination of the Indenture or the Debentures where such consent
shall be required, provided, however, that, where a consent or action under the Indenture would
require the consent or act of the Holders of greater than a majority in principal amount of
Debentures affected thereby (a “Super Majority”), the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least the proportion in
liquidation amount of the Preferred Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The Institutional Trustee shall not
revoke any action previously authorized or approved by a vote of the Holders of the Preferred
Securities. Except with respect to directing the time, method and place of conducting a proceeding
for a remedy available to the Institutional Trustee, the Institutional Trustee, as holder of the
Debentures, shall not take any of the actions described in clauses (i), (ii), (iii) or (iv) above
unless the Institutional Trustee has obtained, at the expense of the Holder of Common Securities,
an opinion of a nationally recognized independent tax counsel experienced in such matters to the
effect that as a result of such action, the Trust will not fail to be classified as a grantor trust
for United States federal income tax purposes. If the Institutional Trustee fails to enforce its
rights under the Declaration, (other than by reason of the failure to obtain the opinion set forth
in the previous sentence) any Holder of Preferred Securities may, to the fullest extent permitted
by law, directly institute a legal proceeding against the Debenture Issuer to enforce the
Institutional Trustee’s rights under the Debentures without first instituting a legal proceeding
against the Institutional Trustee or any other Person. If a Declaration Event of Default has
occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to
pay interest or principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a Holder of Preferred
Securities may also directly institute a proceeding for enforcement of payment to such Holder (a
“Direct Action”) of the principal of or interest on the Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such Holder on or after the
respective due date specified in the Debentures without first (i) directing the Institutional
Trustee to enforce the terms of the Debentures or (ii) instituting a legal proceeding directly
against the Debenture Issuer to enforce the Institutional Trustee’s rights under the Debentures.
Except as provided in the preceding sentence, the Holders of Preferred Securities will not be able
to exercise directly any other remedy available to the Holders of the Debentures. In connection
with such Direct Action, Travelers will be subrogated to the rights of such Holder of Preferred
Securities under the Declaration to the extent of any payment made by Travelers to such Holder of
Preferred Securities in such Direct Action.




          (c) Any required approval or direction of Holders of Preferred Securities may be given at a
separate meeting of Holders of Preferred Securities convened for such purpose, at a meeting of all
of the Holders of Securities in the Trust or pursuant to written consent. The Regular Trustees or,
at their election, the Institutional Trustee, will cause a notice of any meeting at which Holders
of Preferred Securities are entitled to vote to be mailed to each Holder of record of Preferred
Securities. Each such notice will include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or consents.










 



59




          No vote or consent of the Holders of the Preferred Securities will be required for the Trust
to redeem and cancel Preferred Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.




          Notwithstanding that Holders of Preferred Securities are entitled to vote or consent under any
of the circumstances described above, any of the Preferred Securities that are owned by the Sponsor
or any Affiliate of the Sponsor shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.




     6. Voting Rights — Common Securities.



          (a) Except as provided under Sections 6(b), (c) and 7 as otherwise required by law and the
Declaration, the Holders of the Common Securities will have no voting rights.




          (b) The Holders of the Common Securities are entitled, in accordance with Article V of the
Declaration, to vote to appoint, remove or replace any Trustee or to increase or decrease the
number of Trustees.




          Subject to Section 2.6 of the Declaration and only after the Event of Default with respect to
the Preferred Securities has been cured, waived, or otherwise eliminated and subject to the
requirements of the second to last sentence of this paragraph, the Holders of a Majority in
aggregate liquidation amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the Institutional Trustee
under the Declaration, including (i) directing the time, method, place of conducting any proceeding
for any remedy available to the Debenture Trustee, or exercising any trust or power conferred on
the Debenture Trustee with respect to the Debentures, (ii) waiving any past default and its
consequences that is waivable under the Indenture, or (iii) exercising any right to rescind or
annul a declaration that the principal of all the Debentures shall be due and payable, provided
that, where a consent or action under the Indenture would require the consent or act of Super
Majority, the Institutional Trustee may only give such consent or take such action at the written
direction of the Holders of at least the proportion in liquidation amount of the Common Securities
which the relevant Super Majority represents of the aggregate principal amount of the Debentures
outstanding. Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred Securities. Other than
with respect to directing the time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth above, the
Institutional Trustee shall not take any action in accordance with the directions of the Holders of
the Common Securities under this paragraph unless the Institutional Trustee has obtained, at the
expense of the Holder of Common Securities, an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to enforce its rights
under the Declaration, any Holder of Common Securities may institute a legal proceeding directly
against any Person to enforce the Institutional Trustee’s rights under the Declaration without
first instituting a legal proceeding against the Institutional Trustee or any other Person.










 



60




          Any approval or direction of Holders of Common Securities may be given at a separate meeting
of Holders of Common Securities convened for such purpose, at a meeting of all of the Holders of
Securities in the Trust or pursuant to written consent. The Regular Trustees will cause a notice of
any meeting at which Holders of Common Securities are entitled to vote to be mailed to each Holder
of record of Common Securities. Each such notice will include a statement setting forth (i) the
date of such meeting, (ii) a description of any resolution proposed for adoption at such meeting on
which such Holders are entitled to vote and (iii) instructions for the delivery of proxies.




          No vote or consent of the Holders of the Common Securities will be required for the Trust to
redeem and cancel Common Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.




     7. Amendments to Declaration and Indenture.



          (a) In addition to any requirements under Section 12.1 of the Declaration, if any proposed
amendment to the Declaration provides for, or the Regular Trustees otherwise propose to effect, (i)
any action that would adversely affect in any material respect the powers, preferences or special
rights of the Securities, whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in Section 8.1 of the
Declaration, then the Holders of outstanding Securities as a class, will be entitled to vote on
such amendment or proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect only the Preferred
Securities or only the Common Securities, then only the affected class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be effective except with the
approval of a Majority in liquidation amount of such class of Securities.




          (b) In the event the consent of the Institutional Trustee as the holder of the Debentures is
required under the Indenture with respect to any amendment, modification or termination on the
Indenture or the Debentures, the Institutional Trustee shall request the written direction of the
Holders of the Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by a Majority in
liquidation amount of the Securities voting together as a single class; provided, however, that
where a consent under the Indenture would require the consent of a Super Majority, the
Institutional Trustee may only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the directions of the Holders of
the Securities under this Section 7(b) unless the Institutional Trustee has obtained, at the
expense of the Holder of Common Securities, an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action.










 



61




     8. Pro Rata.



          A reference in these terms of the Securities to any payment, distribution or treatment as
being “Pro Rata” shall mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a payment, an Event of
Default under the Declaration has occurred and is continuing, in which case any funds available to
make such payment shall be paid first to each Holder of the Preferred Securities Pro Rata according
to the aggregate liquidation amount of Preferred Securities held by the relevant Holder relative to
the aggregate liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to each Holder of
Common Securities Pro Rata according to the aggregate liquidation amount of Common Securities held
by the relevant Holder relative to the aggregate liquidation amount of all Common Securities
outstanding.




     9. Ranking.



          The Preferred Securities rank pari passu and payment thereon shall be made Pro Rata with the
Common Securities except that, where an Event of Default occurs and is continuing under the
Indenture in respect of the Debentures held by the Institutional Trustee, the rights of Holders of
the Common Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the Holders of the Preferred
Securities.




     10. Listing.



          The Regular Trustees shall use their reasonable best efforts to cause the Preferred Securities
to be listed on the New York Stock Exchange, Inc.




     11. Acceptance of Securities Guarantee and Indenture.



          Each Holder of Preferred Securities and Common Securities, by the acceptance thereof, agrees
to the provisions of the Preferred Securities Guarantee, including the subordination provisions
therein and to the provisions of the Indenture.




     12. No Preemptive Rights.



          The Holders of the Securities shall have no preemptive or similar rights to subscribe for any
additional securities.




     13. Miscellaneous.



          These terms constitute a part of the Declaration.




          The Sponsor will provide a copy of any one or more of the Declaration, the Preferred
Securities Guarantee and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.











 



62




EXHIBIT A-1


FORM OF PREFERRED SECURITY CERTIFICATE




          [IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT —THIS PREFERRED SECURITY IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE “DEPOSITARY”) OR A NOMINEE OF THE DEPOSITARY. THIS
PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.




          UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]




	 	 	 
	Certificate Number
	 	 
	 

	 	 





	 	 	 
	Number of Preferred Securities
	 	 
	 

	 	 





	 	 	 
	CUSIP No.
	 	 
	 

	 	 





Certificate Evidencing Preferred Securities of




TRAVELERS CAPITAL TRUST [II] [III] [IV] [V]




[ ]% Trust Preferred Securities (Liquidation Amount [$] per Preferred Security)




          TRAVELERS CAPITAL TRUST [II] [III] [IV] [V], a statutory trust created under the laws of the
State of Delaware (the “Trust”), hereby certifies that Cede & Co. (the “Holder”) is the registered
owner of [                    ] preferred securities of the Trust representing
preferred undivided beneficial interests in the assets of the Trust designated the [_]% Trust
Preferred Securities (the “Preferred Securities”). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,




          










 



 


     63



rights, privileges, restrictions, preferences and other terms and provisions of the Preferred
Securities are set forth in, and this certificate and the Preferred Securities represented hereby
are issued and shall in all respects be subject to, the provisions of the Second Amended and
Restated Declaration of Trust of the Trust dated as of [ , 200 ] as the
same may be amended from time to time (the “Declaration”), including the designation of the terms
of the Preferred Securities as set forth in Annex I thereto. Capitalized terms used herein but not
defined shall have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Preferred Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Preferred Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Sponsor at its principal place of business.




          The Holder of this certificate, by accepting this certificate, is deemed to have (i) agreed to
the terms of the Indenture and the Debentures[, including that the Debentures are subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the Indenture)][, including
that the Debentures are the general unsecured obligations of Travelers and will rank equal to
Travelers’ other senior and unsecured obligations] and (ii) agreed to the terms of the Preferred
Securities Guarantee[, including that the Preferred Securities Guarantee is (A) subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the Indenture) of Travelers,
(B) pari passu with the most senior preferred or preference stock now or hereafter issued by
Travelers and with any guarantee now or hereafter issued by Travelers with respect to preferred or
preference stock or preferred trust security of Travelers’ Affiliates and (C) senior to Travelers
common stock][, including that the Preferred Securities Guarantee is the general unsecured
obligation of Travelers and will rank equal to Travelers’ other senior and unsecured obligations].




          Upon receipt of this certificate, the Holder is bound by the Declaration and is entitled to
the benefits thereunder.




          By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the
Debentures as indebtedness and the Preferred Securities as evidence of indirect beneficial
ownership in the Debentures.




          IN WITNESS WHEREOF, the Trust has executed this certificate this [     ] day of [           
, 200 ].



	 	 	 	 	 	 	 
	 	 	TRAVELERS CAPITAL TRUST [II]

[III] [IV] [V]	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	By:

Title:
	 	[                              ]

Regular Trustee	 	 













 





     64     





INSTITUTIONAL TRUSTEE’S CERTIFICATE OF AUTHENTICATION




          This is one of the Preferred Securities referred to in the within-mentioned Declaration.




	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

     Authorized Officer
	 	 













 



 


     65




[FORM OF REVERSE OF SECURITY]




          Distributions payable on each Preferred Security will be fixed at a rate per annum of [ ]%
(the “Coupon Rate”) of the stated liquidation amount of [$ ] per Preferred Security, such rate
being the rate of interest payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears will bear interest thereon at the Coupon Rate compounded quarterly (to the
extent permitted by applicable law). The term “Distributions” as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the Institutional Trustee
and to the extent the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly Distribution period on
the basis of a 360-day year consisting of twelve 30-day months. Distributions payable for any
period of less than a full quarterly period will be computed on the basis of a 30-day month and,
for periods of less than one month, the actual number of elapsed days per 30-day month.




          Distributions on the Preferred Securities will be cumulative, will accrue from the date of
original issuance and will be payable quarterly in arrears, on the following dates, which dates
correspond to the interest payment dates on the Debentures: [          ], [          ],
[          ] and [          ] of each year, commencing on [          ,
200 ], except as otherwise described below. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period from time to time
on the Debentures for a period not exceeding 20 quarterly periods (each an “Extension Period”) and,
as a consequence of such deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the extent permitted by
applicable law) at the Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further extend such
Extension Period; provided that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 quarterly periods or extend beyond the maturity (whether at
the stated maturity or by declaration of acceleration, call for redemption or otherwise) of the
Debentures under the Indenture. Payments of accrued Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the above requirements.




          The Preferred Securities shall be redeemable as provided in the Declaration.









 



66


ASSIGNMENT




	 	 	 
	FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security

Certificate to:
 
	 	 	 





 





(Insert assignee’s social security or tax identification number)




 





(Insert address and zip code of assignee) and irrevocably appoints agent to transfer this Preferred
Security Certificate on the books of the Trust. The agent may substitute another to act for him or
her.




	 	 	 
	Date:
	 	 
	 

	 	 





	 	 	 
	Signature:
	 	 
	 

	 	 





(Sign exactly as your name appears on the other side of this Preferred Security Certificate)










 



67




EXHIBIT A-2


FORM OF COMMON SECURITY CERTIFICATE




          TRANSFER OF THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SET FORTH IN THE DECLARATION
REFERRED TO BELOW




	 	 	 
	Certificate Number
	 	 
	 

	 	 





	 	 	 
	Number of Common Securities
	 	 
	 

	 	 





Certificate Evidencing Common Securities of




TRAVELERS CAPITAL TRUST [II] [III] [IV] [V]




[   ]% Trust Common Securities (Liquidation Amount [$ ] per Common Security)




          TRAVELERS CAPITAL TRUST [II] [III] [IV] [V], a statutory trust created under the laws of the
State of Delaware (the “Trust”), hereby certifies that The Travelers Companies, Inc., a Minnesota
corporation, (the “Holder”) is the registered owner of [ ] common securities of the Trust
representing undivided beneficial interests in the assets of the Trust designated the [ ]% Trust
Common Securities (the “Common Securities”). The Common Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer and satisfaction of the other conditions
set forth in the Declaration (as defined below), including, without limitation, Section 9.1
thereof. The designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Second Amended and Restated Declaration of Trust of the Trust
dated as of [                    , 200_], as the same may be amended from time to time (the “Declaration”),
including the designation of the terms of the Common Securities as set forth in Annex I thereto.
Capitalized terms used herein but not defined shall have the meaning given them in the Declaration.
The Sponsor will provide a copy of the Declaration and the Indenture to a Holder without charge
upon written request to the Sponsor at its principal place of business.




          Upon receipt of this certificate, the Holder is bound by the Declaration and is entitled to
the benefits thereunder.




          The Holder of this certificate, by accepting this certificate, is deemed to have agreed to the
terms of the Indenture and the Debentures, including that the Debentures are subordinate and junior
in right of payment to all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.




          By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the
Debentures as indebtedness and the Common Securities as evidence of indirect beneficial ownership
in the Debentures.










 



68




          IN WITNESS WHEREOF, the Trust has executed this certificate this [     ] day of
[          , 200  ].




	 	 	 	 	 	 	 
	 	 	TRAVELERS CAPITAL TRUST

[II] [III] [IV] [V]	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	By:
	 	[                                        ]	 	 
	 

	 	 	 	Title: Regular Trustee	 	 













 



69




ASSIGNMENT




	 	 	 
	FOR VALUE 

Certificate to:

	RECEIVED, 	the undersigned assigns and transfers this Common Security

	 

	 	 





 





(Insert assignee’s social security or tax identification number)




 





(Insert address and zip code of assignee) and irrevocably appoints agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute another to act for him or
her.




	 	 	 
	Date:
	 	 
	 

	 	 





	 	 	 
	Signature:
	 	 
	 

	 	 





(Sign exactly as your name appears on the other side of this Common Security Certificate)