Document:

AMENDMENT TO EMPLOYMENT AGREEMENT - C. SKOMOROWSKI

 Exhibit 10.4 
  
 EMPLOYMENT AGREEMENT 
  
 THIS AGREEMENT is made and entered into as of the 1st day of July, 2003, by and between LYDALL, INC., a Delaware corporation (the “Company”),
and CHRISTOPHER R. SKOMOROWSKI (the “Executive”). 
  
 W I T N E S S E T H 
  
 WHEREAS, the Company and the Executive (the “Parties”) have agreed to enter into this agreement (the “Agreement) relating to the employment
of the Executive by the Company; 
  
 NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the Parties, intending to be legally bound, agree as follows: 
  
 1. Term of Employment; Termination of Prior Agreement. 
  
 (a) The Company agrees to continue to employ the Executive, and the Executive agrees to remain in the employment of the
Company, in accordance with the terms and provisions of this Agreement. 
  
 (b) The Employment Period under this Agreement shall be the period commencing as of the date of this Agreement and ending on the date of termination of the Executive’s employment pursuant to Section 5, 6 or 7 below, whichever is
applicable. 
  
 (c) Immediately upon the commencement of the
Executive’s employment pursuant to the terms of this Agreement, that certain Agreements by and between the Executive and the Company dated as of March 1, 2000, February 1, 2000 and February 1, 1999, as amended, shall terminate and shall be of
no further force or effect. 
  
 2. Duties. It is the
intention of the Parties that during the term of his employment under this Agreement, the Executive will serve as Chief Operating Officer of the Company. During the Employment Period, the Executive will devote his full business time and attention
and best efforts to the affairs of the Company and his duties as its Chief Operating Officer. The Executive will have such duties as are appropriate to his position as Chief Operating Officer, and will have such authority as required to enable him
to perform these duties. Consistent with the foregoing, the Executive shall comply with all reasonable instructions of the Board of Directors of the Company (the “Board”). 
  
 3. Compensation and Benefits. 
  
 3.1 Salary. During the Employment Period, the Company will pay the Executive a base salary at an initial annual rate
of Four Hundred Twenty Thousand Dollars ($420,000). The Board may, in its sole and absolute discretion, increase the Executive’s base salary in light of the Executive’s performance, inflation, changes in the cost of living and other
factors deemed relevant by the Board. The Executive’s base salary may not be decreased during the term of this Agreement. The Chief Executive Officer of the Company shall meet with the Executive annually to review the Executive’s
performance, objectives and compensation, including salary, bonus and stock options, and the Chief Executive Officer shall then meet with the Compensation and Stock Option Committee of the Board (the 

  

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“Compensation Committee”) to discuss the same. If the Compensation Committee determines that any adjustments thereto are appropriate, such
committee shall make a recommendation to the full Board and the Board shall make such adjustments, if any, as the Board deems appropriate and consistent with this Agreement. The Executive’s base salary will be paid in accordance with the
standard practices for other corporate executives of the Company. 
  
 3.2 Bonuses. During the Employment Period, the Executive will be eligible to receive annually or otherwise such bonus awards, if any, as shall be determined by the Board in its sole and absolute discretion after receiving the
recommendation of the Compensation Committee. 
  
 3.3 Benefit
Programs. During the Employment Period, the Executive will be entitled to participate on substantially the same terms as other senior executives of the Company in all employee benefit plans and programs of the Company from time to time in effect
for the benefit of senior executives of the Company, including, but not limited to, pension and other retirement plans, profit sharing plans, stock incentive and individual performance award plans, group life insurance, hospitalization and surgical
and major medical coverages (excluding the Lydall, Inc. Executive Medical Plan), short-term and long-term disability, and such other benefits as are or may be made available from time to time to senior executives of the Company. 
  
 3.4 Vacations and Holidays. During the Employment Period, the
Executive will be entitled to vacation leave of five (5) weeks per year at full pay or such greater vacation benefits as may be provided for by the Company’s vacation policies applicable to senior executives. The Executive will be entitled to
such holidays as are established by the Company for all employees. 
  
 3.5 Automobile. During the Employment Period, the Company will provide the Executive with an automobile allowance of no less than $500 per month. 
  
 4. Business Expenses. The Executive will be entitled to prompt reimbursement for all reasonable, documented and
necessary expenses incurred by him in performing his services hereunder, provided he properly accounts therefor in accordance with the policies and procedures established by the Company. 
  
 5. Termination of Employment by the Company. 
  
 5.1 Involuntary Termination by the Company Other Than For Permanent and Total Disability, Cause, or Following Change of
Control. The Company may terminate the Executive’s employment at any time other than (i) by reason of the Executive’s Permanent and Total Disability (as defined in Section 5.2) or (ii) for Cause (as defined in Section 5.3), by giving
him a written notice of termination at least 30 days before the date of termination (or such lesser notice period as the Executive may agree to). In the event of such a termination of employment pursuant to this Section 5.1, the Executive shall be
entitled to receive (i) the benefits described in Section 8 if such termination of employment does not occur within 12 months following a “Change of Control” (as defined in Section 10), or (ii) the benefits described in Section 9 if such
termination of employment occurs within 12 months following a “Change of Control” (as defined in Section 10). 
  
 5.2 Termination Due to Permanent and Total Disability. If the Executive incurs a Permanent and Total Disability, as defined below, the Company may
terminate the Executive’s employment by giving him written notice of termination at least 30 days before the date of such termination (or such lesser notice period as the Executive may agree to). In the event of such termination of the
Executive’s employment because of Permanent and Total Disability, the Executive shall be entitled to receive (i) his base salary pursuant to Section 3.1 through the date which is twenty-four months following 
  

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the date of such termination of employment, reduced by any amounts paid to the Executive under any disability program maintained by the Company, such base
salary to be paid at the normal time for the payment of such base salary; (ii) a bonus for the year of termination of employment and for the next succeeding year (to be paid at the normal time for payment of such bonuses) in an amount equal to the
average of the three highest annual bonuses earned by the Executive under the Company’s annual incentive bonus plan for any of the five calendar years preceding the calendar year of his termination of employment (or, if he was not eligible for
a bonus for at least three calendar years in such five-year period, then the average of such bonuses for all of the calendar years in such five-year period for which he was eligible), with any deferred bonuses counting for the year earned rather
than the year paid; (iii) any other compensation and benefits to the extent actually earned by the Executive under any other benefit plan or program of the Company as of the date of such termination of employment, such compensation and benefits to
be paid at the normal time for payment of such compensation and benefits; and (iv) any reimbursement amounts owing under Section 4. In addition, if the Executive elects to continue coverage under the Company’s health plan pursuant to COBRA, the
Company for a period of eighteen months following termination of the Executive’s employment by reason of Permanent and Total Disability will pay the same percentage of the Executive’s premium for COBRA coverage for the Executive and, if
applicable, his spouse and dependent children, as the Company paid at the applicable time for coverage under such plan for actively employed senior executives generally. For the period of eighteen months following the termination of the
Executive’s employment by reason of Permanent and Total Disability, the Company will continue to provide the life insurance benefits that the Company would have provided to the Executive if the Executive had continued in employment with the
Company for such period, but only if the Executive timely pays the portion of the premium for such coverage that senior executives of the Company generally are required to pay for such coverage. For purposes of this Agreement, the Executive shall be
considered to have incurred a Permanent and Total Disability if he is unable to substantially carry out his duties under this Agreement by reason of any medically determinable physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not less than 12 months. The existence of such Permanent and Total Disability shall be evidenced by such medical certification as the Secretary of the Company shall require and
shall be subject to the approval of the Compensation Committee. 
  
 5.3 Termination for Cause. The Company may terminate the Executive’s employment immediately for Cause for any of the following reasons: (i) an act or acts of dishonesty or fraud on the part of the Executive resulting or intended
to result directly or indirectly in substantial gain or personal enrichment to which the Executive was not legally entitled at the expense of the Company; (ii) a willful material breach by the Executive of his duties or responsibilities under this
Agreement resulting in demonstrably material injury to the Company; (iii) the Executive’s conviction of a felony or any crime involving moral turpitude; (iv) habitual neglect or insubordination (defined as refusal to execute or carry out
directions from the Board or its duly appointed designees) where the Executive has been given written notice of the acts or omissions constituting such neglect or insubordination and the Executive has failed to cure such conduct, where susceptible
to cure, within thirty days following such notice; or (v) a material breach by the Executive of any of his obligations under the Lydall Employee Agreement executed by the Executive and attached hereto as Exhibit A. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Executive a written notice of termination from the Compensation Committee after reasonable notice to the Executive and an
opportunity for the Executive, together with his counsel, to be heard before the Compensation Committee, finding that, in the good faith opinion of the Compensation Committee, the Executive was guilty of conduct set forth above in clause (i), (ii),
(iii), (iv) or (v) of the first sentence of this Section 5.3 and specifying the particulars in detail. In the event of such termination of the Executive’s employment for Cause, the Executive shall be entitled to receive only (i) his base salary
pursuant to Section 3.1 earned through the date of such termination of employment 

  

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plus his base salary for the period of any vacation time earned but not taken for the year of termination of employment, such base salary to be paid at the
normal time for payment of such base salary; (ii) any other compensation and benefits to the extent actually earned by the Executive under any other benefit plan or program of the Company as of the date of such termination of employment, such
compensation and benefits to be paid and at the normal time for payment of such compensation and benefits; and (iii) any reimbursement amounts owing under Section 4. 
  
 6. Termination of Employment by the Executive. 
  
 (a) Good Reason. The Executive may terminate his employment for Good Reason by giving the Company a written notice of
termination at least 30 days before the date of such termination (or such lesser notice period as the Company may agree to) specifying in reasonable detail the circumstances constituting such Good Reason. In the event of the Executive’s
termination of his employment for Good Reason, the Executive shall be entitled to receive (i) the benefits described in Section 8 if such termination of employment does not occur within 12 months following a “Change of Control” (as defined
in Section 10) or (ii) the benefits described in Section 9 if such termination of employment occurs within 12 months following a “Change of Control” (as defined in Section 10). For purposes of this Agreement, Good Reason shall mean (i) a
significant reduction in the scope of the Executive’s authority, functions, duties or responsibilities from that which is contemplated by this Agreement; (ii) any reduction in the Executive’s base salary; (iii) a significant reduction in
the employee benefits provided to the Executive (excluding the Lydall, Inc. Executive Medical Plan) other than in connection with an across-the-board reduction similarly affecting substantially all senior executives of the Company; or (iv) any
material breach by the Company of any provision of this Agreement without the Executive having committed any material breach of the Executive’s obligations hereunder or under the Lydall Employee Agreement, which breach is not cured within
thirty days following written notice thereof to the Company of such breach. In addition, in the case of a termination of employment within 12 months following a “Change of Control” (as defined in Section 10), Good Reason shall also include
the relocation of the Executive’s office location to a location more than 50 miles away from the Executive’s then current principal place of employment. If an event constituting a ground for termination of employment for Good Reason
occurs, and the Executive fails to give notice of termination within 90 days after the occurrence of such event, the Executive shall be deemed to have waived his right to terminate employment for Good Reason in connection with such event (but not
for any other event for which the 90-day period has not expired). 
  
 (b) Other. The Executive may terminate his employment at any time and for any reason, other than pursuant to subsection (a) above, by giving the Company a written notice of termination to that effect at least 30 days before the date
of termination (or such lesser notice period as the Company may agree to). In the event of the Executive’s termination of his employment pursuant to this subsection (b), the Executive shall be entitled to receive only (i) his base salary
pursuant to Section 3.1 earned through the date of such termination of employment plus his base salary for the period of vacation time earned but not taken for the year of termination of employment, such base salary to be paid at the normal time for
payment of such base salary; (ii) any other compensation and benefits to the extent actually earned by the Executive under any other benefit plan or program of the Company as of the date of such termination of employment, such compensation and
benefits to be paid at the normal time for payment of such compensation and benefits; and (iii) any reimbursement amounts owing under Section 4. 
  
 7. Termination of Employment By Death. In the event of the death of the Executive during the course of his employment hereunder, the
Executive’s estate (or other person or entity having such entitlement pursuant to the terms of the applicable plan or program) shall be entitled to receive (i) the Executive’s base salary pursuant to Section 3.1 earned through the date of
the Executive’s 

  

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death plus the Executive’s base salary for the period of vacation time earned but not taken for the year of the Executive’s death, such base salary
to be paid at the normal time for payment of such base salary; (ii) a bonus for the year of the Executive’s death (to be paid within 90 days after the Executive’s death) in an amount equal to a pro rata portion of the average of the three
highest annual bonuses earned by the Executive under the Company’s annual incentive bonus plan for any of the five calendar years preceding the calendar year of the Executive’s death (or, if the Executive was not eligible for a bonus for
at least three calendar years in such five-year period, then the average of such bonuses for all of the calendar years in such five-year period for which the Executive was eligible), with any deferred bonuses counting for the year earned rather than
the year paid and with the pro rata portion being determined by dividing the number of days of the Executive’s employment during such calendar year up to his death by 365 (366 if a leap year);(iii) any other compensation and benefits to the
extent actually earned by the Executive under any other benefit plan or program of the Company as of the date of such termination of employment, such compensation and benefits to be paid at the normal time for payment of such compensation and
benefits; and (iv) any reimbursement amounts owing under Section 4. In addition, in the event of such death, the Executive’s beneficiaries shall receive any death benefits owed to them under the Company’s employee benefit plans. If the
Executive’s spouse and/or dependent children elect to continue coverage under the Company’s health plan following the Executive’s death pursuant to COBRA, the Company for a period of 18 months following the Executive’s death will
pay the same percentage of the premium for COBRA coverage for the Executive’s spouse and/or dependent children, as applicable, as the Company would have paid in respect of the Executive’s coverage under such plan if the Executive had
continued in employment with the Company for such period. 
  
 8.
Benefits Upon Termination Without Cause or For Good Reason (No Change of Control). If (a) the Executive’s employment with the Company shall terminate (i) because of termination by the Company other than for Cause or Permanent and Total
Disability pursuant to Section 5.1 or (ii) because of termination by the Employee for Good Reason pursuant to Section 6(a), and (b) such termination of employment does not occur within 12 months following a “Change of Control” of the
Company (as defined in Section 10), the Executive shall be entitled to the following: 
  
 (a) The Company shall pay to the Executive his base salary pursuant to Section 3.1 earned through the date of such termination of
employment and any other compensation and benefits to the extent actually earned by the Executive under any benefit plan or program of the Company as of the date of such termination of employment, such base salary, compensation and benefit to be
paid at the normal time for payment of such base salary, compensation and benefits. 
  
 (b) The Company shall pay the Executive any reimbursement amounts owing under Section 4. 
  
 (c) The Company shall pay to the Executive as a severance
benefit an amount equal to two (2) times the sum of (i) his annual rate of base salary immediately preceding his termination of employment and (ii) the average of his annual bonuses earned under the Company’s annual incentive bonus plan for the
three calendar years preceding his termination of employment (or, if he was not eligible for a bonus in each of those three calendar years, then the average of such bonuses for all of the calendar years in such three-year period for which he was
eligible), with any deferred bonuses counting for the year earned rather than the year paid. Such severance benefit shall be paid in a lump sum within 30 days after the date of such termination of employment. 
  

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 (d) During the period of 18 months beginning on the date of the Executive’s
termination of employment, the Executive (and, if applicable, the Executive’s spouse and dependent children) shall remain covered by the medical, dental, life insurance, and, if reasonably commercially available through nationally reputable
insurance carriers, long-term disability plans of the Company that covered him immediately prior to his termination of employment as if he had remained in employment for such period; provided, however, that the coverage under any such
plan is conditioned on the timely payment by the Executive (or his spouse or dependent children) of the portion of the premium for such coverage that actively employed senior executives with the Company generally are required to pay for such
coverage. In the event that the Executive’s participation in any such plan is barred, the Company shall arrange to provide the Executive (and, if applicable, his spouse and dependent children) with substantially similar benefits (but, in the
case of long-term disability benefits, only if reasonably commercially available). 
  
 (e) The Company shall supplement the benefits payable in respect of the Executive under the Company’s Pension Plan and Supplemental
Executive Retirement Plan (and any successor plans thereto) (collectively, the “Pension Plans”) by paying the difference between (i) the benefits that the Executive would have been entitled to receive under the Pension Plans if he had been
credited with one and one-half additional years of service (but no additional years of age) for purposes of the benefit accrual formula under the Pension Plans as of the date of termination of the Executive’s employment and (ii) the benefits
that the Executive is entitled to receive under the Pension Plans determined without regard to this subsection(e). Such benefits shall be payable in the same form and at the same time as the benefits under the respective Pension Plans. 

 
 (f) The Company will pay the Executive a car allowance of
$500 per month for 24 months following termination of the Executive’s employment to replace the Company-leased automobile, which leased automobile will be returned to the Company by the Executive on the date of termination of the
Executive’s employment. 
  
 (g) The Company
will provide the Executive with out-placement services (which may include secretarial services and office space, equipment and supplies) selected by the Executive, at the Company’s expense, up to a maximum of $20,000. 
  
 (h) The Executive shall be entitled to the Gross-up Payment,
if any, described in Section 11. 
  
 (i) The
Company shall promptly pay all reasonable attorneys’ fees and related expenses incurred by the Executive in seeking to obtain or enforce any right or benefit under this Agreement or to defend against any claim or assertion in connection with
this Agreement, but only to the extent the Executive substantially prevails. 
  
 9. Benefits Upon Termination Without Cause or For Good Reason (Change of Control). If (a) the Executive’s employment with the Company shall terminate (i) because of termination by the Company other than
for Cause or Permanent and Total Disability pursuant to Section 5.1 or (ii) because of termination by the Employee for Good Reason pursuant to Section 6(a) and (b) such termination of employment occurs within 12 months following a “Change of
Control” of the Company (as defined in Section 10), the Executive shall be entitled to the following: 
  
 (a) The Company shall pay to the Executive his base salary pursuant to Section 3.1 earned through the date of such termination of
employment and any other compensation and benefits to the extent actually earned by the Executive under any benefit plan or program 
  

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of the Company as of the date of such termination of employment, such base salary, compensation and benefits to be paid at the normal time for payment of
such base salary, compensation and benefits. 
  
 (b) The Company shall pay the Executive any reimbursement amounts owing under Section 4. 
  
 (c) The Company shall pay to the Executive as a severance benefit an amount equal to three (3) times the sum of (i) his annual rate of
base salary immediately preceding his termination of employment and (ii) the average of his three highest annual bonuses earned under the Company’s annual incentive bonus plan for any of the five calendar years preceding his termination of
employment (or, if he was not eligible for a bonus for at least three calendar years in such five-year period, then the average of such bonuses for all of the calendar years in such five-year period for which he was eligible), with any deferred
bonuses counting for the year earned rather than the year paid. Such severance benefit shall be paid in a lump sum within 30 days after the date of such termination of employment. 
  
 (d) The Company shall pay to the Executive as a bonus for the year of termination of his employment an
amount equal to a portion (determined as provided in the next sentence) of the Executive’s maximum bonus opportunity under the Company’s annual incentive bonus plan for the calendar year of termination of the Executive’s employment
or, if none, such portion of the bonus awarded to him under the Company’s annual incentive bonus plan for the calendar year immediately preceding the calendar year of the termination of his employment, with deferred bonuses counting for the
year earned rather than the year paid. Such portion shall be determined by dividing the number of days of the Executive’s employment during such calendar year up to his termination of employment by 365 (366 if a leap year). Such payment shall
be made in a lump sum within 30 days after the date of such termination of employment, and the Executive shall have no right to any further bonuses under said plan. 
  
 (e) During the period of 36 months beginning on the date of the Executive’s termination of employment,
the Executive (and, if applicable, the Executive’s spouse and dependent children) shall remain covered by the medical, dental, life insurance, and, if reasonably commercially available through nationally reputable insurance carriers, long-term
disability plans of the Company that covered him immediately prior to his termination of employment as if he had remained in employment for such period; provided, however, that the coverage under any such plan is conditioned on the
timely payment by the Executive (or his spouse or dependent children) of the portion of the premium for such coverage that actively employed senior executives with the Company generally are required to pay for such coverage. In the event that the
Executive’s participation in any such plan is barred, the Company shall arrange to provide the Executive (and, if applicable, his spouse and dependent children) with substantially similar benefits (but, in the case of long-term disability
benefits, only if reasonably commercially available). 
  
 (f) The Company shall supplement the benefits payable in respect of the Executive under the Company’s Pension Plan and Supplemental Executive Retirement Plan (and any successor plans thereto) (collectively, the “Pension
Plans”) by paying the difference between (i) the benefits that the Executive would have been entitled to receive under the Pension Plans if he had been credited with three additional years of service (but no additional years of age) for
purposes of the benefit accrual formula under the Pension Plans as of the date of termination of the Executive’s employment and (ii) the benefits that the Executive is entitled to receive under the Pension Plans determined without regard to
this subsection (f). Such benefits shall be payable in the same form and at the same time as the benefits under the respective Pension Plans. 
  

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 (g) Each stock option granted by the Company to the Executive and outstanding immediately
prior to termination of his employment shall be fully vested and immediately exercisable and may be exercised by the Executive (or, following his death, by the person or entity to which such option passes) at any time prior to the expiration date of
the applicable option (determined without regard to any earlier termination of the option that would otherwise occur by reason of termination of his employment). Each restricted stock award granted by the Company to the Executive and outstanding
immediately prior to termination of the Executive’s employment shall be fully vested upon such termination of employment. 
  
 (h) The Company will pay the Executive a car allowance, in an amount equal to Executive’s monthly lease allowance at the time of
termination, per month for 24 months following termination of the Executive’s employment to replace the Company-leased automobile, which leased automobile will be returned to the Company by the Executive on the date of termination of the
Executive’s employment. 
  
 (i) The Company
will provide the Executive with out-placement services (which may include secretarial services and office space, equipment and supplies) selected by the Executive, at the Company’s expense, up to a maximum of $20,000. 
  
 (j) The Executive shall be entitled to the Gross-up Payment,
if any, described in Section 11. 
  
 (k) The
Company shall promptly pay all reasonable attorneys’ fees and related expenses incurred by the Executive in seeking to obtain or enforce any right or benefit under this Agreement or to defend against any claim or assertion in connection with
this Agreement, but only to the extent the Executive substantially prevails. 
  
 10. Change of Control. For the purposes of this Agreement, a “Change of Control” shall be deemed to have occurred if (a) any person or persons acting together which would constitute a
“group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (other than the Company or any subsidiary of the Company) shall beneficially own (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, at least 25% of the total voting power of all classes of capital stock of the Company entitled to vote generally in the election of the Board; (b) Current Directors (as herein defined) shall cease for any
reason to constitute at least a majority of the members of the Board (for this purpose, a “Current Director” shall mean any member of the 
  
 Board as of the date hereof and any successor of a Current Director whose election, or nomination for election by the Company’s shareholders, was approved by at
least a majority of the Current Directors then on the Board); (c) the shareholders of the Company approve (i) a plan of complete liquidation of the Company or (ii) an agreement providing for the merger or consolidation of the Company other than a
merger or consolidation in which (x) the holders of the common stock of the Company immediately prior to the consolidation or merger have, directly or indirectly, at least a majority of the common stock of the continuing or surviving corporation
immediately after such consolidation or merger or (y) the Board immediately prior to the merger or consolidation would, immediately after the merger or consolidation, constitute a majority of the board of directors of the continuing or surviving
corporation; or (d) the shareholders of the Company approve an agreement (or agreements) providing for the sale or other disposition (in one transaction or a series of transactions) of all or substantially all of the assets of the Company.

  

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 11. Tax Gross-up. 
  
 (a) In the event that any payment or distribution made, or benefit provided, by the Company or any of its affiliates to or
for the benefit of the Executive (whether paid or payable or distributed or distributable) pursuant to the terms of this Agreement or any other plan, program or arrangement of the Company or any of its affiliates but determined without regard to any
additional payments required under this Section 11 (collectively the “Payments”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended and then in effect (the “Code”) (or any
similar excise tax) or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”),
then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all Federal, state, local or other taxes (including any interest or penalties imposed
with respect to any such taxes), including, without limitation, any such income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. The Executive may receive Gross-Up Payments under this Section 11 whether or not the Executive actually receives other payments or benefits under this Agreement. 
  
 (b) Subject to the provisions of subsection (c) of this Section 11, all
determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a
nationally recognized independent accounting firm mutually agreeable to the Company and the Executive (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 20 calendar
days of the receipt of written notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company and shall be paid by the
Company upon demand of the Executive as incurred or billed by the Accounting Firm. Any Gross-Up Payment, as determined pursuant to this Section 11, shall be paid by the Company to the Executive within five days of the receipt of the Accounting
Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with an unqualified written opinion in form and substance satisfactory to the Executive that failure to
report the Excise Tax on the Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penalty. As a result of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies described in subsection (c) of this Section 11 and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be paid by the Company to or for the benefit of the Executive within five days of the receipt of the Accounting Firm’s determination. All determinations made by the Accounting Firm
in connection with any Gross-Up Payment or Underpayment shall be final and binding upon the Company and the Executive. 
  
 (c) The Executive shall notify the Company in writing of any claim asserted in writing by the Internal Revenue Service to the Executive that, if
successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but not later than 60 days after the Executive is informed in writing of such claim and shall apprise the 

  

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Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration
of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the Executive shall at the Company’s expense: 
  
 (i) give the Company any information reasonably requested by the Company relating to such claim; 
  
 (ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company; 
  
 (iii) cooperate with the Company in good faith in order
effectively to contest such claim; and 
  
 (iv)
permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly as incurred all costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or any Federal, state, local or other income or other tax (including interest and penalties with respect thereto) imposed as
a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 11, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue
or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest
the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine;
provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive on an interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or Federal, state, local or other income or other tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely
to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing authority. 
  
 (d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to subsection (c) of this Section 11, the Executive becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company’s complying with the requirements of subsection (c) of this Section 11) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable
thereto) upon receipt thereof. If, after the receipt by the Executive of an amount advanced by the Company pursuant to subsection (c) of this Section 11, a determination is made that the Executive shall not be entitled to any refund with respect

  

 – 10 – 

 
to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 
  
 12. Entitlement to Other Benefits. Except as otherwise provided in
this Agreement, this Agreement shall not be construed as limiting in any way any rights or benefits that the Executive or his spouse, dependents or beneficiaries may have pursuant to any other plan or program of the Company. 
  
 13. Indemnification. The parties agree that the Indemnification
Agreement dated March 1, 2000 between the Executive and the Company and attached as Exhibit B shall remain in full force and effect. 
  
 14. General Provisions. 
  
 14.1 No Duty to Seek Employment. The Executive shall not be under any duty or obligation to seek or accept other employment following termination
of employment, and no amount, payment or benefits due to the Executive hereunder shall be reduced or suspended if the Executive accepts subsequent employment, except as expressly set forth herein. 
  
 14.2 Deductions and Withholding. All amounts payable or which become
payable under any provision of this Agreement shall be subject to any deductions authorized by the Executive and any deductions and withholdings required by law. 
  
 14.3 Notices. All notices, demands, requests, consents, approvals or other communications (collectively
“Notices”) required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and may be personally served or may be faxed with a copy deposited in the United States mail, registered or
certified, return receipt requested, postage prepaid, addressed as follows: 
  

	 To the Company:
	  	 Lydall, Inc.

	 	  	 P.O. Box 151

	 	  	 One Colonial Road

	 	  	 Manchester, CT 06045-0151

	 	  	 Attn: Chief Executive Officer

		
	 To the Executive:
	  	 Christopher R. Skomorowski

	 	  	 48 Highwood Road

	 	  	 Simsbury, CT 06070

  
 or such other address as such party
shall have specified most recently by written notice. Notice mailed as provided herein shall be deemed given on the fifth business day following the date so mailed or on the date of actual receipt, whichever is earlier. 
  
 14.4 No Disparagement. The Executive shall not during the period of
his employment with the Company, nor during the two-year period beginning on the date of termination of his employment for any reason, disparage the Company or any of its subsidiaries or affiliates or any of their shareholders, directors, officers,
employees or agents. The Executive agrees that the terms of this Section 14.4 shall survive the term of this Agreement and the termination of the Executive’s employment. 
  

 – 11 – 

 14.5 Proprietary Information and Inventions. The Lydall Employee Agreement previously executed by
the Executive and attached hereto as Exhibit A is incorporated by reference in this Agreement, and the Executive agrees to continue to be bound thereby. 
  
 14.6 Covenant to Notify Management. The Executive agrees to abide by the Code of Ethics and Business Conduct of the Company as well as the
Company’s other rules, regulations, policies and procedures. The Executive agrees to comply in full with all governmental laws and regulations as well as ethics codes applicable. In the event that the Executive is aware or suspects the Company,
or any of its officers or agents, of violating any such laws, ethics, codes, rules, regulations, policies or procedures, the Executive agrees to bring all such actual and suspected violations to the attention of the Company immediately so that the
matter may be properly investigated and appropriate action taken. The Executive understands that the Executive is precluded from filing a complaint with any governmental agency or court having jurisdiction over wrongful conduct unless the Executive
has first notified the Company of the facts and permits it to investigate and correct the concerns. 
  
 14.7 Amendments and Waivers. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company. No waiver by either Party hereto at any time of any breach by the other Party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other
Party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 
  
 14.8 Beneficial Interests. This Agreement shall inure to the benefit of and be enforceable by a) the Company’s successors and assigns and b)
the Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amounts are still payable to him hereunder, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate. 
  
 14.9 Successors. The Company will require any successors (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform. 
  
 14.10 Assignment.
This Agreement and the rights, duties, and obligations hereunder may not be assigned or delegated by any Party without the prior written consent of the other Party and any attempted assignment or delegation without such prior written consent shall
be void and be of no effect. Notwithstanding the foregoing provisions of this Section 14.10, the Company may assign or delegate its rights, duties and obligations hereunder to any affiliate or to any person or entity which succeeds to all or
substantially all of the business of the Company or one of its subsidiaries through merger, consolation, reorganization, or other business combination or by acquisition of all or substantially all of the assets of the Company or one of its
subsidiaries. 
  
 14.11 Choice of Law. This Agreement shall
be governed by and construed in accordance with the laws of the State of Connecticut. 
  
 14.12 Statute of Limitations. The Executive and the Company hereby agree that there shall be a one year statute of limitations for the filing of any requests for arbitration or any lawsuit 
  

 – 12 – 

 
relating to this Agreement or the terms or conditions of Executive’s employment by the Company. If such a claim is filed more than one year subsequent
to the Executive’s last day of employment it shall be precluded by this provision, regardless of whether or not the claim has accrued at that time. 
  
 14.13 Right to Injunctive and Equitable Relief. The Executive’s obligations under Section 14.4 are of a special and unique character, which
gives them a peculiar value. The Company cannot be reasonably or adequately compensated for damages in an action at law in the event the Executive breaches such obligations. Therefore, the Executive expressly agrees that the Company shall be
entitled to injunctive and other equitable relief without bond or other security in the event of such breach in addition to any other rights or remedies which the Company may possess or be entitled to pursue. Furthermore, the obligations of the
Executive and the rights and remedies of the Company under Section 14.4 and this Section 14.13 are cumulative and in addition to, and not in lieu of, any obligations, rights, or remedies as created by applicable law. 
  
 14.14 Severability or Partial Invalidity. The invalidity or
unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 
  
 14.15 Entire Agreement. This Agreement, along with the Lydall Employee Agreement by and between the Executive and the
Company, constitutes the entire agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the Parties with respect to the subject matter hereof. This Agreement
may not be changed orally and may only be modified in writing signed by both Parties. This Agreement, along with the Lydall Employee Agreement, is intended by the Parties as the final expression of their agreement with respect to such terms as are
included herein and therein and may not be contradicted by evidence of any prior or contemporaneous agreement. The Parties further intend that this Agreement, along with the Lydall Employee Agreement, constitutes the complete and exclusive statement
of their terms and that no extrinsic evidence may be introduced in any judicial proceeding involving such agreements. 
  
 14.16 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed an original but
all of which together shall constitute one and the same instrument. 
  

 – 13 – 

 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer
and the Employee has hereunto set his hand as of the day and year first above written. 
  
  

	 	 	 LYDALL, INC.
	 	 
				
	 	 	 By:
	 	 /s/    DAVID FREEMAN

	 	 October 2, 2003

	 	 	 	 	 David Freeman
	 	 Date

	 	 	 	 	 Chief Executive Officer
	 	 
				
	 	 	 	 	 /s/    CHRISTOPHER R. SKOMOROWSKI

	 	 October 2, 2003

	 	 	 	 	 Christopher R. Skomorowski
	 	 Date

  

 – 14 –<PAGE>

                                                                     Exhibit 4.1

                        AMENDED AND RESTATED DECLARATION
                                    OF TRUST

                                  By and among

                         U.S. BANK NATIONAL ASSOCIATION,
                            as Institutional Trustee,

                            BANK OF THE OZARKS, INC.
                                   as Sponsor,

                                       and
               GEORGE G. GLEASON, MARK D. ROSS AND PAUL E. MOORE,
                               as Administrators,

                         Dated as of September 29, 2003

<PAGE>

                                TABLE OF CONTENTS
                                -----------------
                                                                            Page
                                                                            ----

ARTICLE I INTERPRETATION AND DEFINITIONS.......................................1
ARTICLE II ORGANIZATION........................................................9
   Section 2.1.   Name.........................................................9
   Section 2.2.   Office.......................................................9
   Section 2.3.   Purpose......................................................9
   Section 2.4.   Authority....................................................9
   Section 2.5.   Title to Property of the Trust...............................9
   Section 2.6.   Powers and Duties of the Institutional Trustee and the
   Administrators.............................................................10
   Section 2.7.   Prohibition of Actions by the Trust and the Institutional
                  Trustee.....................................................14
   Section 2.8.   Powers and Duties of the Institutional Trustee..............14
   Section 2.9.   Certain Duties and Responsibilities of the Institutional
   Trustee and Administrators.................................................16
   Section 2.10.  Certain Rights of Institutional Trustee.....................18
   Section 2.11.  Execution of Documents......................................20
   Section 2.12.  Not Responsible for Recitals or Issuance of Securities......20
   Section 2.13.  Duration of Trust...........................................20
   Section 2.14.  Mergers.....................................................20
ARTICLE III SPONSOR...........................................................22
   Section 3.1.   Sponsor's Purchase of Common Securities.....................22
   Section 3.2.   Responsibilities of the Sponsor.............................22
   Section 3.3.   Expenses....................................................22
   Section 3.4.   Right to Proceed............................................23
ARTICLE IV INSTITUTIONAL TRUSTEE AND ADMINISTRATORS...........................23
   Section 4.1.   Institutional Trustee; Eligibility..........................23
   Section 4.2.   Administrators..............................................24
   Section 4.3.   Appointment, Removal and Resignation of Institutional
   Trustee and Administrators.................................................24
   Section 4.4.   Institutional Trustee Vacancies.............................26
   Section 4.5.   Effect of Vacancies.........................................26
   Section 4.6.   Meetings of the Institutional Trustee and the
   Administrators.............................................................26
   Section 4.7.   Delegation of Power.........................................26
   Section 4.8.   Conversion, Consolidation or Succession to Business.........27
ARTICLE V DISTRIBUTIONS.......................................................27
   Section 5.1.   Distributions...............................................27
ARTICLE VI ISSUANCE OF SECURITIES.............................................27
   Section 6.1.   General Provisions Regarding Securities.....................27
   Section 6.2.   Paying Agent, Transfer Agent and Registrar..................28
   Section 6.3.   Form and Dating.............................................29
   Section 6.4    Book-Entry Capital Securities...............................29
   Section 6.5.   Mutilated, Destroyed, Lost or Stolen Certificates...........31
   Section 6.6.   Temporary Securities........................................31
   Section 6.7.   Cancellation................................................32

                                        i

<PAGE>

   Section 6.8.   CUSIP Numbers...............................................32
   Section 6.9.   Rights of Holders; Waivers of Past Defaults.................32
ARTICLE VII DISSOLUTION AND TERMINATION OF TRUST..............................34
   Section 7.1.   Dissolution and Termination of Trust........................34
ARTICLE VIII TRANSFER OF INTERESTS............................................35
   Section 8.1.   General.....................................................35
   Section 8.2.   Transfer Procedures and Restrictions........................36
   Section 8.3.   Deemed Security Holders.....................................38
ARTICLE IX LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, INSTITUTIONAL
   TRUSTEE OR OTHERS..........................................................39
   Section 9.1.   Liability...................................................39
   Section 9.2.   Exculpation.................................................39
   Section 9.3.   Fiduciary Duty..............................................40
   Section 9.4.   Indemnification.............................................40
   Section 9.5.   Outside Businesses..........................................42
   Section 9.6.   Compensation, Fee...........................................43
ARTICLE X ACCOUNTING..........................................................43
   Section 10.1.  Fiscal Year.................................................43
   Section 10.2.  Certain Accounting Matters..................................43
   Section 10.3.  Banking.....................................................44
   Section 10.4.  Withholding.................................................44
ARTICLE XI AMENDMENTS AND MEETINGS............................................45
   Section 11.1.  Amendments..................................................45
   Section 11.2.  Meetings of the Holders of Securities; Action by Written
   Consent....................................................................46
ARTICLE XII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE..........................48
   Section 12.1.  Representations and Warranties of Institutional Trustee.....48
   ARTICLE XIII MISCELLANEOUS.................................................48
   Section 13.1.  Notices.....................................................48
   Section 13.2.  Governing Law...............................................49
   Section 13.3.  Intention of the Parties....................................50
   Section 13.4.  Headings....................................................50
   Section 13.5.  Successors and Assigns......................................50
   Section 13.6.  Partial Enforceability......................................50
   Section 13.7.  Counterparts................................................50

                                       ii

<PAGE>

                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       OF

                        OZARK CAPITAL STATUTORY TRUST II

                               September 29, 2003

     This AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of September 29, 2003, by the Institutional Trustee (as defined
herein), the Administrators (as defined herein), the Sponsor (as defined herein)
and by the holders, from time to time, of undivided beneficial interests in the
Trust (as defined herein) issued pursuant to this Declaration;

     WHEREAS, the Institutional Trustee, the Administrators and the Sponsor
established Ozark Capital Statutory Trust II (the "Trust"), a statutory 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 Connecticut on September 23, 2003,
for the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain debentures of the Debenture Issuer (as defined
herein);

     WHEREAS, as of the date hereof, no interests in the Trust have been issued;
and

     WHEREAS, the Institutional Trustee, the Administrators 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 constitutes the governing instrument of such statutory trust, the
Institutional Trustee declares 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. The
parties hereto hereby agree as follows:

                                    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;

                                       1

<PAGE>

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

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

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

     "Additional Interest" has the meaning set forth in the Indenture.

     "Administrative Action" has the meaning set forth in paragraph 4(a) of
Annex I.

     "Administrators" means each of George G. Gleason, Mark D. Ross, and Paul E.
Moore, solely in such Person's capacity as Administrator of the Trust created
and continued hereunder and not in such Person's individual capacity, or such
Administrator's successor in interest in such capacity, or any successor
appointed as herein provided.

     "Affiliate" means a wholly-owned or majority-owned subsidiary of the
Company.

     "Applicable Depositary Procedures" means, with respect to any transfer or
transaction involving a Book-Entry Capital Security, the rules and procedures of
the Depositary for such Book-Entry Capital Security, in each case to the extent
applicable to such transaction and as in effect from time to time.

     "Authorized Officer" of a Person means any Person that is authorized to
bind such Person.

     "Bankruptcy Event" means, with respect to any Person:

     (a)  a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of such Person in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or

     (b)  such Person shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of such Person of any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due.

     "Book-Entry Capital Security" means a Capital Security, the ownership and
transfers of which shall be made through book entries by a Depositary.

                                       2

<PAGE>

     "Business Day" means any day other than Saturday, Sunday or any other day
on which banking institutions in the city in which the Company's principal place
of business is located, New York City or Hartford, Connecticut are permitted or
required by any applicable law to close.

     "Capital Securities" has the meaning set forth in paragraph 1(a) of Annex
I.

     "Capital Security Certificate" means a Certificate in fully registered form
representing a Capital Security substantially in the form of Exhibit A-1.

     "Capital Treatment Event" has the meaning set forth in paragraph 4(a) of
Annex I. "Certificate" means any certificate evidencing Securities.

     "Closing Date" has the meaning set forth in the Placement Agreement.

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

     "Commission" means the Securities and Exchange Commission.

     "Common Securities" has the meaning set forth in paragraph 1(b) of Annex I.

     "Company" means Bank of the Ozarks, Inc., an Arkansas corporation, and its
successors and assigns.

     "Company Indemnified Person" means (a) any Administrator; (b) any Affiliate
of any Administrator; (c) any officers, directors, shareholders, members,
partners, employees, representatives or agents of any Administrator, 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 225 Asylum Street, Goodwin Square,
Hartford, Connecticut.

     "Coupon Rate" has the meaning set forth in paragraph 2(a) of Annex I.

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

     "Creditor" has the meaning set forth in Section 3.3.

     "Debenture Issuer" means the Company, in its capacity as issuer of the
Debentures under the Indenture.

                                       3

<PAGE>

     "Debenture Trustee" means U.S. Bank National Association, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.

     "Debentures" means the Floating Rate Junior Subordinated Deferrable
Interest Debentures due 203_ to be issued by the Debenture Issuer under the
Indenture.

     "Defaulted Interest" has the meaning set forth in the Indenture.

     "Definitive Capital Securities Certificates" means Capital Securities
issued in certificated, fully registered form that are not Global Capital
Securities.

     "Depositary" means an organization registered as a clearing agency under
the Exchange Act that is designated as Depositary by the Sponsor or any
successor thereto. DTC will be the initial Depositary.

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

     "Determination Date" has the meaning set forth in paragraph 2(a) of Annex
I.

     "Direct Action" has the meaning set forth in Section 2.8(d).

     "Distribution" means a distribution payable to Holders of Securities in
accordance with Section 5.1.

     "Distribution Payment Date" has the meaning set forth in paragraph 2(b) of
Annex I.

     "Distribution Period" has the meaning set forth in paragraph 2(a) of Annex
I.

     "Distribution Rate" means, for the period beginning on (and including) the
date of original issuance and ending on (but excluding) December 31, 2003,
4.04%, and for the period beginning on (and including) December 31, 2003, and
thereafter, the Coupon Rate.

     "DTC" means The Depository Trust Company or any successor thereto.

     "Event of Default" means any one of the following events that shall have
occurred and be continuing (whatever the reason for such event and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

     (a)  the occurrence of an Indenture Event of Default; or

     (b)  default by the Trust in the payment of any Redemption Price of any
Security when it becomes due and payable; or

                                       4

<PAGE>

     (c)  default in the performance, or breach, in any material respect, of any
covenant or warranty of the Institutional Trustee in this Declaration (other
than those specified in clause (a) or (b) above) and continuation of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail to the Institutional Trustee and to the Sponsor by
the Holders of at least 25% in aggregate liquidation amount of the outstanding
Capital Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or

     (d)  the occurrence of a Bankruptcy Event with respect to the Institutional
Trustee if a successor Institutional Trustee has not been appointed within 90
days thereof.

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

     "Extension Period" has the meaning set forth in paragraph 2(b) of Annex I.

     "Federal Reserve" has the meaning set forth in paragraph 3 of Annex I.

     "Fiduciary Indemnified Person" shall mean the Institutional Trustee, any
Affiliate of the Institutional Trustee and any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee.

     "Fiscal Year" has the meaning set forth in Section 10.1.

     "Global Capital Security" means a Capital Securities Certificate evidencing
ownership of Book-Entry Capital Securities.

     "Guarantee" means the guarantee agreement to be dated as of the Closing
Date, of the Sponsor in respect of the Capital Securities.

     "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.

     "Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.

     "Indenture" means the Indenture dated as of the Closing Date, between the
Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued, as such Indenture and
any supplemental indenture may be amended, supplemented or otherwise modified
from time to time.

     "Indenture Event of Default" means an "Event of Default" as defined in the
Indenture.

     "Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 4.1.

                                       5

<PAGE>

     "Interest" means any interest due on the Debentures including any
Additional Interest and Defaulted Interest.

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

     "Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.

     "Investment Company Event" has the meaning set forth in paragraph 4(a) of
Annex I.

     "Legal Action" has the meaning set forth in Section 2.8(d).

     "Liquidation" has the meaning set forth in paragraph 3 of Annex I.

     "Liquidation Distribution" has the meaning set forth in paragraph 3 of
Annex I.

     "Majority in liquidation amount of the Securities" means Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of
more than 50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.

     "Maturity Date" has the meaning set forth in paragraph 4(a) of Annex I.

     "Officers' Certificates" 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 providing for
it 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 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.

     "OTS" has the meaning set forth in paragraph 3 of Annex I.

     "Owner" means each Person who is the beneficial owner of Book-Entry Capital
Securities as reflected in the records of the Depositary or, if a Depositary
Participant is not the

                                       6

<PAGE>

beneficial owner, then the beneficial owner as reflected in the records of the
Depositary Participant.

     "Paying Agent" has the meaning specified in Section 6.2.

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

     "Placement Agreement" means the Placement Agreement relating to the
offering and sale of Capital Securities, dated September 29, 2003, by and among
the Company, the Trust and SunTrust Capital Markets, Inc.

     "Property Account" has the meaning set forth in Section 2.8(c).

     "Pro Rata" has the meaning set forth in paragraph 8 of Annex I.

     "QIB" means a "qualified institutional buyer" as defined in Rule 144A under
the Securities Act.

     "Quorum" means a majority of the Administrators or, if there are only two
Administrators, both of them.

     "Redemption Date" has the meaning set forth in paragraph 4(a) of Annex I.

     "Redemption/Distribution Notice" has the meaning set forth in paragraph
4(e) of Annex I.

     "Redemption Price" has the meaning set forth in paragraph 4(a) of Annex I.

     "Registrar" has the meaning set forth in Section 6.2.

     "Responsible Officer" means, with respect to the Institutional Trustee, any
officer within the Corporate Trust Office of the Institutional Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or other
officer of the Corporate Trust Office of the Institutional Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.

     "Restricted Securities Legend" has the meaning set forth in Section 8.2(b).

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

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

     "Securities" means the Common Securities and the Capital Securities.

                                       7

<PAGE>

     "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 paragraph 4(a) of Annex I.

     "Sponsor" means Bank of the Ozarks, Inc., an Arkansas corporation, or any
successor entity in a merger,consolidation or amalgamation, in its capacity as
sponsor of the Trust.

     "Statutory Trust Act" means Chapter 615 of Title 34 of the Connecticut
General Statutes, Sections 500, et seq. as may be amended from time to time.

     "Successor Entity" has the meaning set forth in Section 2.14(b).

     "Successor Institutional Trustee" has the meaning set forth in Section
4.3(a).

     "Successor Securities" has the meaning set forth in Section 2.14(b).

     "Super Majority" has the meaning set forth in paragraph 5(b) of Annex I.

     "Tax Event" has the meaning set forth in paragraph 4(a) of Annex I.

     "10% in liquidation amount of the Securities" means Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of 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.

     "3-Month LIBOR" has the meaning set forth in paragraph 2(a) of Annex I.

     "Transfer Agent" has the meaning set forth in Section 6.2.

     "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).

     "Trust Property" means (a) the Debentures, (b) any cash on deposit in, or
owing to, the Property Account and (c) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed to
be held by the Institutional Trustee pursuant to the trusts of this Declaration.

     "U.S. Person" means a United States Person as defined in Section
7701(a)(30) of the Code.

                                       8

<PAGE>

                                   ARTICLE II
                                  ORGANIZATION

     Section 2.1.  Name. The Trust is named "Ozark Capital Statutory Trust II,"
as such name may be modified from time to time by the Administrators following
written notice to the Holders of the Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Administrators.

     Section 2.2.  Office. The address of the principal office of the Trust is
c/o U.S. Bank National Association, 225 Asylum Street, Goodwin Square, Hartford,
Connecticut 06103. On at least 10 Business Days' written notice to the Holders
of the Securities, the Administrators may designate another principal office,
which shall be in a state of the United States or in the District of Columbia.

     Section 2.3.  Purpose. The exclusive purposes and functions of the Trust
are (a) to issue and sell the Securities representing undivided beneficial
interests in the assets of the Trust, (b) to invest the gross proceeds from such
sale to acquire the Debentures, (c) to facilitate direct investment in the
assets of the Trust through issuance of the Common Securities and the Capital
Securities and (d) except as otherwise limited herein, to engage in only those
other activities necessary or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.

     Section 2.4.  Authority. Except as specifically provided in this
Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by the
Institutional Trustee in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Institutional Trustee acting on
behalf of the Trust, no Person shall be required to inquire into the authority
of the Institutional Trustee to bind the Trust. Persons dealing with the Trust
are entitled to rely conclusively on the power and authority of the
Institutional Trustee as set forth in this Declaration. The Administrators shall
have only those ministerial duties set forth herein with respect to
accomplishing the purposes of the Trust and are not intended to be trustees or
fiduciaries with respect to the Trust or the Holders. The Institutional Trustee
shall have the right, but shall not be obligated except as provided in Section
2.6, to perform those duties assigned to the Administrators.

     Section 2.5.  Title to Property of the Trust. Except as provided in Section
2.8 with respect to the Debentures and the Property Account or as otherwise
provided in this Declaration, legal title to all assets of the Trust shall be
vested in the Trust. The Holders shall not have legal title to any part of the
assets of the Trust, but shall have an undivided beneficial interest in the
assets of the Trust.

                                       9

<PAGE>

     Section 2.6.  Powers and Duties of the Institutional Trustee and the
                   Administrators.

     (a)  The Institutional Trustee and the Administrators shall conduct the
affairs of the Trust in accordance with the terms of this Declaration. Subject
to the limitations set forth in paragraph (b) of this Section, and in accordance
with the following provisions (i) and (ii), the Institutional Trustee and the
Administrators shall have the authority to enter into all transactions and
agreements determined by the Institutional Trustee to be appropriate in
exercising the authority, express or implied, otherwise granted to the
Institutional Trustee or the Administrators, as the case may be, under this
Declaration, and to perform all acts in furtherance thereof, including without
limitation, the following:

          (i)    Each Administrator shall have the power and authority to act on
behalf of the Trust with respect to the following matters:

                 (A)  the issuance and sale of the Securities;

                 (B)  to acquire the Debentures with the proceeds of the sale of
the Securities; provided, however, that the Administrators 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;

                 (C)  to cause the Trust to enter into, and to execute and
deliver on behalf of the Trust, such agreements as may be necessary or desirable
in connection with the purposes and function of the Trust, including agreements
with the Paying Agent;

                 (D)  ensuring compliance with the Securities Act, applicable
state securities or blue sky laws;

                 (E)  the sending of notices (other than notices of default),
and other information regarding the Securities and the Debentures to the Holders
in accordance with this Declaration;

                 (F)  the consent to the appointment of a Paying Agent, Transfer
Agent and Registrar in accordance with this Declaration, which consent shall not
be unreasonably withheld or delayed;

                 (G)  execution and delivery of the Securities in accordance
with this Declaration;

                 (H)  execution and delivery of closing certificates pursuant to
the Placement Agreement and the application for a taxpayer identification
number;

                 (I)  unless otherwise determined by the Holders of a Majority
in liquidation amount of the Securities or as otherwise required by the
Statutory Trust Act, to execute on behalf of the Trust (either acting alone or
together with any or all of the

                                       10

<PAGE>

Administrators) any documents that the Administrators have the power to execute
pursuant to this Declaration;

                 (J)  the taking of any action incidental to the foregoing as
the Institutional Trustee may from time to time determine is necessary or
advisable to give effect to the terms of this Declaration for the benefit of the
Holders (without consideration of the effect of any such action on any
particular Holder);

                 (K)  to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including
Distributions, voting rights, redemption and exchanges, and to issue relevant
notices to the Holders of Capital Securities and Holders of Common Securities as
to such actions and applicable record dates, and

                 (L)  to duly prepare and file all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
on behalf of the Trust.

          (ii)   As among the Institutional Trustee and the Administrators, the
Institutional Trustee shall have the power, duty and authority to act on behalf
of the Trust with respect to the following matters:

                 (A)  the establishment of the Property Account;

                 (B)  the receipt of the Debentures;

                 (C)  the collection of interest, principal and any other
payments made in respect of the Debentures in the Property Account;

                 (D)  the distribution through the Paying Agent of amounts owed
to the Holders in respect of the Securities;

                 (E)  the exercise of all of the rights, powers and privileges
of a holder of the Debentures;

                 (F)  the sending of notices of default and other information
regarding the Securities and the Debentures to the Holders in accordance with
this Declaration;

                 (G)  the distribution of the Trust Property in accordance with
the terms of this Declaration;

                 (H)  to the extent provided in this Declaration, the winding up
of the affairs of and liquidation of the Trust and the preparation, execution
and filing of the certificate of cancellation with the Secretary of State of the
State of Connecticut;

                 (I)  after any Event of Default (provided that such Event of
Default is not by or with respect to the Institutional Trustee) the taking of
any action incidental to the foregoing as the Institutional Trustee may from
time to time determine is necessary or advisable

                                       11

<PAGE>

to give effect to the terms of this Declaration and protect and conserve the
Trust Property for the benefit of the Holders (without consideration of the
effect of any such action on any particular Holder); and

                 (J)  to take all action that may be necessary 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
Connecticut and of each other jurisdiction in which such existence is necessary
to protect the limited liability of the Holders of the Capital Securities or to
enable the Trust to effect the purposes for which the Trust was created.

          (iii)  The Institutional Trustee shall have the power and authority to
act on behalf of the Trust with respect to any of the duties, liabilities,
powers or the authority of the Administrators set forth in Section 2.6(a)(i)(D),
(E) and (F) herein but shall not have a duty to do any such act unless
specifically requested to do so in writing by the Sponsor, and shall then be
fully protected in acting pursuant to such written request; and in the event of
a conflict between the action of the Administrators and the action of the
Institutional Trustee, the action of the Institutional Trustee shall prevail.

     (b)  So long as this Declaration remains in effect, the Trust (or the
Institutional Trustee or Administrators acting on behalf of the Trust) shall not
undertake any business, activities or transaction except as expressly provided
herein or contemplated hereby. In particular, neither the Institutional Trustee
nor the Administrators may cause the Trust to (i) acquire any investments or
engage in any activities not authorized by this Declaration, (ii) sell, assign,
transfer, exchange, mortgage, pledge, set-off or otherwise dispose of any of the
Trust Property or interests therein, including to Holders, except as expressly
provided herein, (iii) take any action that would reasonably be expected (x) to
cause the Trust to fail or cease to qualify as a "grantor trust" for United
States federal income tax purposes or (y) to require the trust to register as an
Investment Company under the Investment Company Act, (iv) incur any indebtedness
for borrowed money or issue any other debt or (v) take or consent to any action
that would result in the placement of a lien on any of the Trust Property. The
Institutional Trustee shall, at the sole cost and expense of the Trust, defend
all claims and demands of all Persons at any time claiming any lien on any of
the Trust Property adverse to the interest of the Trust or the Holders in their
capacity as Holders.

     (c)  In connection with the issuance and sale of the Capital Securities,
the Sponsor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Sponsor in furtherance of the following prior to the date of this
Declaration are hereby ratified and confirmed in all respects):

          (i)    the taking of any action necessary to obtain an exemption from
the Securities Act;

          (ii)   the determination of the states in which to take appropriate
action to qualify or register for sale all or part of the Capital Securities and
the determination of any and all such acts, other than actions which must be
taken by or on behalf of the Trust, and the advice to the Administrators of
actions they must take on behalf of the Trust, and the preparation for

                                       12

<PAGE>

execution and filing of any documents to be executed and filed by the Trust or
on behalf of the Trust, as the Sponsor deems necessary or advisable in order to
comply with the applicable laws of any such States in connection with the sale
of the Capital Securities;

          (iii)  the negotiation of the terms of, and the execution and delivery
of, the Placement Agreement providing for the sale of the Capital Securities;
and

          (iv)   the taking of any other actions necessary or desirable to carry
out any of the foregoing activities.

     (d)  Notwithstanding anything herein to the contrary, the Administrators
and the Holders of a Majority in liquidation amount of the Common Securities are
authorized and directed to conduct the affairs of the Trust and to operate the
Trust so that the Trust will not (i) be deemed to be an Investment Company
required to be registered under the Investment Company Act, and (ii) fail to be
classified as a "grantor trust" for United States federal income tax purposes.
The Administrators and the Holders of a Majority in liquidation amount of the
Common Securities shall not take any action inconsistent with the treatment of
the Debentures as indebtedness of the Debenture Issuer for United States federal
income tax purposes. In this connection, the Administrators and the Holders of a
Majority in liquidation amount of the Common Securities are authorized to take
any action, not inconsistent with applicable laws, the Certificate of Trust or
this Declaration, as amended from time to time, that each of the Administrators
and the Holders of a Majority in liquidation amount of the Common Securities
determines in their discretion to be necessary or desirable for such purposes.

     (e)  All reasonable expenses (except for expenses incurred as a result of
such person's gross negligence, bad faith or willful misconduct) incurred by the
Administrators or the Institutional Trustee pursuant to this Section 2.6 shall
be reimbursed by the Sponsor, and the Institutional Trustee and the
Administrators shall have no obligations with respect to such expenses.

     (f)  The assets of the Trust shall consist of the Trust Property.

     (g)  Legal title to all Trust Property shall be vested at all times in the
Institutional Trustee (in its capacity as such) and shall be held and
administered by the Institutional Trustee and the Administrators for the benefit
of the Trust in accordance with this Declaration.

     (h)  If the Institutional Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Declaration and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Institutional Trustee or to such Holder, then and in
every such case the Sponsor, the Institutional Trustee and the Holders shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Institutional Trustee and the Holders shall continue as though
no such proceeding had been instituted.

                                       13

<PAGE>

     Section 2.7.  Prohibition of Actions by the Trust and the Institutional
Trustee.

     (a)  The Trust shall not, and the Institutional Trustee shall cause the
Trust not to, engage in any activity other than as required or authorized by
this Declaration. In particular, the Trust shall not and the Institutional
Trustee shall cause the Trust not to:

          (i)    invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of the 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 other than as
expressly provided herein;

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

          (vii)  carry on any "trade or business" as that phrase is used in the
Code; or

          (viii) other than as provided in this Declaration (including Annex I),
(A) direct the time, method and place of exercising any trust or power conferred
upon the Debenture Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any right to rescind
or annul any declaration that the principal of all the Debentures shall be due
and payable, or (D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless the
Trust shall have received an opinion of counsel experienced in such matters to
the effect that such modification will not cause the Trust to cease to be
classified as a "grantor trust" for United States federal income tax purposes.

     Section 2.8.  Powers and Duties of the Institutional Trustee.

     (a)  The legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Trust
and the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 4.3. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Debentures have been executed and
delivered.

                                       14

<PAGE>

     (b)  The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Administrators.

     (c)  The Institutional Trustee shall:

          (i)    establish and maintain a segregated non-interest bearing trust
account (the "Property Account") in the name of and under the exclusive control
of the Institutional Trustee, and maintained in the Institutional Trustee's
trust department, 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 Property Account and make
payments, or cause the Paying Agent to make payments, to the Holders of the
Capital Securities and Holders of the Common Securities from the Property
Account in accordance with Section 5. 1. Funds in the Property Account shall be
held uninvested until disbursed in accordance with this Declaration;

          (ii)   engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Capital Securities and the Common
Securities to the extent the Debentures are redeemed or mature; and

          (iii)  upon written notice of distribution issued by the
Administrators in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the occurrence of
certain circumstances pursuant to the terms of the Securities.

     (d)  The Institutional Trustee may bring or defend, pay, collect,
compromise, arbitrate, resort to legal action with respect to, or otherwise
adjust claims or demands of or against, the Trust ("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 arises out of the
Institutional Trustee's duties and obligations under this Declaration; provided,
however, that if an Event of Default has occurred and is continuing and such
event is attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a Holder of
the Capital Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Capital
Securities of such Holder (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
rights of the Holders of the Common Securities will be subrogated to the rights
of such Holder of the Capital Securities to the extent of any payment made by
the Debenture Issuer to such Holder of the Capital Securities in such Direct
Action; provided, however, that no Holder of the Common Securities may exercise
such right of subrogation so long as an Event of Default with respect to the
Capital Securities has occurred and is continuing.

                                       15

<PAGE>

     (e)  The Institutional Trustee shall continue to serve as a Trustee until
either:

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

          (ii)   a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 4.3.

     (f)  The Institutional Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a Holder of the Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the
Institutional Trustee may, 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 this Declaration (including Annex I) and the terms of the
Securities.

     The Institutional Trustee must exercise the powers set forth in this
Section 2.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 2.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 2.3.

     Section 2.9.  Certain Duties and Responsibilities of the Institutional
Trustee and Administrators.

     (a)  The Institutional Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all such 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 6.9), the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

     (b)  The duties and responsibilities of the Institutional Trustee and the
Administrators shall be as provided by this Declaration. Notwithstanding the
foregoing, no provision of this Declaration shall require the Institutional
Trustee or Administrators to expend or risk their own funds or otherwise incur
any financial liability in the performance of any of their duties hereunder, or
in the exercise of any of their rights or powers if it shall have reasonable
grounds to believe that repayment of such funds or adequate protection against
such risk of liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Declaration relating to the
conduct or affecting the liability of or affording protection to the
Institutional Trustee or Administrators shall be subject to the provisions of
this Article. Nothing in this Declaration shall be construed to relieve an
Administrator or the Institutional Trustee from liability for its own negligent
act, its own negligent failure to act, or its own willful misconduct. To the
extent that, at law or in equity, the Institutional Trustee or an Administrator
has duties and liabilities relating to the Trust or to the Holders, the
Institutional Trustee or such Administrator shall not be liable to the Trust or
to any Holder for the Institutional Trustee's or such

                                       16

<PAGE>

Administrator's 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 the Administrators or the Institutional Trustee otherwise
existing at law or in equity, are agreed by the Sponsor and the Holders to
replace such other duties and liabilities of the Administrators or the
Institutional Trustee.

     (c)  All payments made by the Institutional Trustee or a Paying Agent in
respect of the Securities shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient revenue
or proceeds from the Trust Property to enable the Institutional Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each Holder,
by its acceptance of a Security, agrees that it will look solely to the revenue
and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Institutional Trustee and the
Administrators are not personally liable to it for any amount distributable in
respect of any Security or for any other liability in respect of any Security.
This Section 2.9(c) does not limit the liability of the Institutional Trustee
expressly set forth elsewhere in this Declaration.

     (d)  The Institutional Trustee shall not be liable for its own acts or
omissions hereunder except as a result of its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

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

          (ii)   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 Capital Securities or the Common Securities, as applicable, relating to
the time, method and place of conducting any proceeding for any remedy available
to the Institutional Trustee, or exercising any trust or power conferred upon
the Institutional Trustee under this Declaration;

          (iii)  the Institutional Trustee's sole duty with respect to the
custody, safekeeping and physical preservation of the Debentures and the
Property Account shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its fiduciary accounts
generally, subject to the protections and limitations on liability afforded to
the Institutional Trustee under this Declaration;

          (iv)   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; and money held by the Institutional Trustee need not be segregated from
other funds held by it except in relation to the Property Account maintained by
the Institutional Trustee pursuant to Section 2.8(c)(i) and except to the extent
otherwise required by law; and

          (v)    the Institutional Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Sponsor with their
respective duties under this

                                       17

<PAGE>

Declaration, nor shall the Institutional Trustee be liable for any default or
misconduct of the Administrators or the Sponsor.

     Section 2.10. Certain Rights of Institutional Trustee. Subject to the
provisions of Section 2.9:

     (a)  the Institutional Trustee may conclusively rely and shall fully be
protected in acting or refraining from acting in good faith upon any resolution,
opinion of counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
appraisal, 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;

     (b)  if (i) in performing its duties under this Declaration, the
Institutional Trustee is required to decide between alternative courses of
action, (ii) in construing any of the provisions of this Declaration, the
Institutional Trustee finds the same ambiguous or inconsistent with any other
provisions contained herein, or (iii) the Institutional Trustee is unsure of the
application of any provision of this Declaration, then, except as to any matter
as to which the Holders of Capital Securities are entitled to vote under the
terms of this Declaration, the Institutional Trustee may deliver a notice to the
Sponsor requesting the Sponsor's written instructions as to the course of action
to be taken and the Institutional Trustee shall take such action, or refrain
from taking such action, as the Institutional Trustee shall be instructed in
writing, in which event the Institutional Trustee shall have no liability except
for its own bad faith, negligence or willful misconduct;

     (c)  any direction or act of the Sponsor or the Administrators contemplated
by this Declaration shall be sufficiently evidenced by an Officers' Certificate;

     (d)  whenever in the administration of this Declaration, the Institutional
Trustee shall deem it desirable that a matter be proved or established before
undertaking, 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 as to factual matters which, upon receipt of such request,
shall be promptly delivered by the Sponsor or the Administrators;

     (e)  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
re-recording, refiling or re-registration thereof;

     (f)  the Institutional Trustee may consult with counsel of its selection
(which counsel may be counsel to the Sponsor or any of its Affiliates) and the
advice of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon and in accordance with such advice; 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;

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<PAGE>

     (g)  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 of the Holders pursuant to this Declaration, unless such
Holders shall have offered to the Institutional Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; provided,
that nothing contained in this Section 2.10(g) shall be taken to relieve the
Institutional Trustee, subject to Section 2.9(b), upon the occurrence of an
Event of Default, of its obligations to exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;

     (h)  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, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Holders, but the
Institutional Trustee may make such further inquiry or investigation into such
facts or matters as it may see fit;

     (i)  the Institutional Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, provided that the Institutional Trustee shall be
responsible for its own negligence or recklessness with respect to the selection
of any agent or attorney appointed by it hereunder, but shall not be responsible
for any misconduct or negligence on the part of or for the supervision of, any
such agent or attorney appointed with due care by it hereunder;

     (j)  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
Capital Securities which instructions may only be given by the Holders of the
same proportion in liquidation amount of the Capital Securities as would be
entitled to direct the Institutional Trustee under the terms of the Capital
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 fully protected in acting in
accordance with such instructions;

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

     (l)  when the Institutional Trustee incurs expenses or renders services in
connection with a Bankruptcy Event, such expenses (including the fees and
expenses of its counsel) and the compensation for such services are intended to
constitute expenses of administration under any bankruptcy law or law relating
to creditors rights generally;

     (m)  the Institutional Trustee shall not be charged with knowledge of an
Event of Default unless a Responsible Officer of the Institutional Trustee
obtains actual knowledge of

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<PAGE>

such event or the Institutional Trustee receives written notice of such event
from any Holder, the Sponsor or the Debenture Trustee;

     (n)  any action taken by the Institutional Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the signature of the
Institutional Trustee or its agents alone shall be sufficient and effective to
perform any such action and no third party shall be required to inquire as to
the authority of the Institutional Trustee to so act or as to its compliance
with any of the terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Institutional Trustee's or its agent's taking such
action; and

     (o)  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 2.11. Execution of Documents. Unless otherwise determined in
writing by the Institutional Trustee, and except as otherwise required by the
Statutory Trust Act, the Institutional Trustee, or any one or more of the
Administrators, as the case may be, is authorized to execute on behalf of the
Trust any documents that the Institutional Trustee or the Administrators, as the
case may be, have the power and authority to execute pursuant to Section 2.6.

     Section 2.12. 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 Trust, and the Institutional Trustee does not assume any
responsibility for their correctness. The Institutional Trustee makes no
representations as to the value or condition of the Trust Property or any part
thereof. The Institutional Trustee makes no representations as to the validity
or sufficiency of this Declaration, the Debentures or the Securities.

     Section 2.13. Duration of Trust. The Trust, unless earlier dissolved
pursuant to the provisions of Article VII hereof, shall be in existence for 35
years from the Closing Date.

     Section 2.14. 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 this Section 2.14(b) and (c) and except in connection with the
liquidation of the Trust and the distribution of the Debentures to Holders of
Securities pursuant to Section 7.1(a)(iv) of the Declaration or Section 4 of
Annex I.

     (b)  The Trust may, with the consent of the Institutional Trustee and
without the consent of the Holders of the Capital Securities, consolidate,
amalgamate, merge with or into, or

                                       20

<PAGE>

be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to a trust organized as such under the
laws of any state, provided that:

          (i)    if the Trust is not the surviving entity, 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 Securities (the "Successor Securities") so
that the Successor Securities rank the same as the Securities rank with respect
to Distributions and payments upon Liquidation, redemption and otherwise;

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

          (iii)  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;

          (iv)   the Institutional Trustee receives written confirmation from
Moody's Investor Services, Inc. or any other nationally recognized statistical
rating organization that rates securities issued by the initial purchaser of the
Capital Securities that it will not reduce or withdraw the rating of any such
securities because of such merger, conversion, consolidation, amalgamation or
replacement;

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

          (vi)   prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, 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, replacement,
conveyance, transfer, or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any Successor
Securities) in any material respect;

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

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

                                       21

<PAGE>

          (vii)  the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided by the Guarantee;

          (viii) the Sponsor owns 100% of the common securities of any Successor
Entity; and

          (ix)   prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Institutional Trustee shall have received an
Officers' Certificate of the Administrators and an opinion of counsel, each to
the effect that all conditions precedent under this Section 2.14(b) to such
transaction have been satisfied.

     (c)  Notwithstanding Section 2.14(b), the Trust shall not, except with the
consent of Holders of 100% in aggregate liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement, conveyance, transfer or lease would cause
the Trust or Successor Entity to be classified as other than a grantor trust for
United States federal income tax purposes.

                                   ARTICLE III
                                     SPONSOR

     Section 3.1.  Sponsor's Purchase of Common Securities. On the Closing Date,
the Sponsor will purchase all of the Common Securities issued by the Trust in an
amount at least equal to 3% of the capital of the Trust, at the same time as the
Capital Securities are sold.

     Section 3.2.  Responsibilities of the Sponsor. In connection with the issue
and sale of the Capital Securities, the Sponsor shall have the exclusive right
and responsibility to engage in, or direct the Administrators to engage in, the
following activities:

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

     (b)  to negotiate the terms of and/or execute on behalf of the Trust, the
Placement Agreement and other related agreements providing for the sale of the
Capital Securities.

     Section 3.3.  Expenses. In connection with the offering, sale and issuance
of the Debentures to the Trust and in connection with the sale of the Securities
by the Trust, the Sponsor, in its capacity as Debenture Issuer, shall:

     (a)  pay all reasonable costs and expenses relating to the offering, sale
and issuance of the Debentures, including compensation of the Debenture Trustee
under the Indenture in

                                       22

<PAGE>

accordance with the provisions of the Indenture and the fee agreement dated on
or about the date hereof between the Sponsor and the Debenture Trustee (the "Fee
Agreement");

     (b)  except as otherwise provided in the Fee Agreement, be responsible for
and shall pay all debts and obligations (other than with respect to the
Securities) and all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization, maintenance and dissolution
of the Trust), the offering, sale and issuance of the Securities (including fees
to the placement agents in connection therewith), the fees and expenses
(including reasonable counsel fees and expenses) of the Institutional Trustee
and the Administrators, the costs and expenses relating to the operation of the
Trust, including, without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, Paying Agents, Registrars,
Transfer Agents, duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets and the enforcement by the
Institutional Trustee of the rights of the Holders; and

     (c)  to pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.

     The Sponsor's obligations under this Section 3.3 shall be for the benefit
of, and shall be enforceable by, any Person to whom such debts, obligations,
costs, expenses and taxes are owed (a "Creditor") whether or not such Creditor
has received notice hereof. Any such Creditor may enforce the Sponsor's
obligations under this Section 3.3 directly against the Sponsor and the Sponsor
irrevocably waives any right or remedy to require that any such Creditor take
any action against the Trust or any other Person before proceeding against the
Sponsor. The Sponsor agrees to execute such additional agreements as may be
necessary or desirable in order to give full effect to the provisions of this
Section 3.3.

     Section 3.4.  Right to Proceed. The Sponsor acknowledges the rights of
Holders to institute a Direct Action as set forth in Section 2.8(d) hereto.

                                   ARTICLE IV
                    INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

     Section 4.1.  Institutional Trustee; Eligibility.

     (a)  There shall at all times be one Institutional Trustee which shall:

          (i)    not be an Affiliate of the Sponsor;

          (ii)   not offer or provide credit or credit enhancement to the Trust;
and

          (iii)  be a banking corporation or trust company organized and doing
business under the laws of the United States of America or any state thereof or
the District of Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000.00), and subject to supervision or

                                       23

<PAGE>

examination by Federal, state, or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 4.1(a)(iii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.

     (b)  If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 4.1(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 4.3(a).

     (c)  If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 3.10(b) of the Trust Indenture Act, the
Institutional Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to this Declaration.

     (d)  The initial Institutional Trustee shall be U.S. Bank National
Association.

     Section 4.2.  Administrators. Each Administrator shall be a U.S. Person, 21
years of age or older and authorized to bind the Sponsor. The initial
Administrators shall be George G. Gleason, Mark D. Ross and Paul E. Moore. There
shall at all times be at least one Administrator. Except where a requirement for
action by a specific number of Administrators is expressly set forth in this
Declaration and except with respect to any action the taking of which is the
subject of a meeting of the Administrators, any action required or permitted to
be taken by the Administrators may be taken by, and any power of the
Administrators may be exercised by, or with the consent of, any one such
Administrator.

     Section 4.3.  Appointment, Removal and Resignation of Institutional Trustee
and Administrators.

     (a)  Notwithstanding anything to the contrary in this Declaration, no
resignation or removal of the Institutional Trustee and no appointment of a
Successor Institutional Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the Successor Institutional Trustee in
accordance with the applicable requirements of this Section 4.3.

     Subject to the immediately preceding paragraph, the Institutional Trustee
may resign at any time by giving written notice thereof to the Holders of the
Securities and by appointing a Successor Institutional Trustee. Upon the
resignation of the Institutional Trustee, the Sponsor shall appoint a successor
by requesting from at least three Persons meeting the eligibility requirements,
its expenses and charges to serve as the successor Institutional Trustee on a
form provided by the Administrators, and selecting the Person who agrees to the
lowest expense and charges (the "Successor Institutional Trustee"). If the
instrument of acceptance by the Successor Institutional Trustee required by this
Section 4.3 shall not have been delivered to the Institutional Trustee within 60
days after the giving of such notice of resignation or delivery of the
instrument of removal, the Institutional Trustee may petition, at the expense of
the Trust, any federal, state or District of Columbia court of competent
jurisdiction for the appointment of a Successor

                                       24

<PAGE>

Institutional Trustee. Such court may thereupon, after prescribing such notice,
if any, as it may deem proper, appoint a Successor Institutional Trustee. The
Institutional Trustee shall have no liability for the selection of such
successor pursuant to this Section 4.3.

     The Institutional Trustee may be removed (i) by the Sponsor at any time or
(ii) by the act of the Holders of a Majority in liquidation amount of the
Capital Securities, delivered to the Institutional Trustee (in its individual
capacity and on behalf of the Trust) if an Event of Default shall have occurred
and be continuing. If the Institutional Trustee shall be so removed, the Sponsor
or Holders of Capital Securities, by act of the Holders of a Majority in
liquidation amount of the Capital Securities then outstanding delivered to the
Institutional Trustee, as applicable, shall promptly appoint a Successor
Institutional Trustee, and such Successor Institutional Trustee shall comply
with the applicable requirements of this Section 4.3. If no Successor
Institutional Trustee shall have been so appointed by the Sponsor or the Holders
of a Majority in liquidation amount of the Capital Securities, as applicable,
and accepted appointment in the manner required by this Section 4.3, within 30
days after delivery of an instrument of removal, any Holder who has been a
Holder of the Securities for at least 6 months may, on behalf of himself and all
others similarly situated, petition any federal, state or District of Columbia
court of competent jurisdiction for the appointment of the Successor
Institutional Trustee. Such court may thereupon, after prescribing such notice,
if any, as it may deem proper, appoint a Successor Institutional Trustee.

     The Institutional Trustee shall give notice of its resignation and removal
and each appointment of a Successor Institutional Trustee to all Holders in the
manner provided in Section 13.1(d) and shall give notice to the Sponsor. Each
notice shall include the name of the Successor Institutional Trustee and the
address of its Corporate Trust Office.

     (b)  In case of the appointment hereunder of a Successor Institutional
Trustee, the retiring Institutional Trustee and the Successor Institutional
Trustee shall execute and deliver an amendment hereto wherein the Successor
Institutional Trustee shall accept such appointment and which (i) shall contain
such provisions as shall be necessary or desirable to transfer and confirm to,
and to vest in, the Successor Institutional Trustee all the rights, powers,
trusts and duties of the retiring Institutional Trustee with respect to the
Securities and the Trust and (ii) shall add to or change any of the provisions
of this Declaration as shall be necessary to provide for or facilitate the
administration of the Trust by more than one Institutional Trustee, it being
understood that nothing herein or in such amendment shall constitute such
Institutional Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Institutional Trustee shall
become effective to the extent provided therein and each Successor Institutional
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Institutional Trustee;
but, on request of the Trust or any Successor Institutional Trustee such
retiring Institutional Trustee shall duly assign, transfer and deliver to such
Successor Institutional Trustee all Trust Property, all proceeds thereof and
money held by such retiring Institutional Trustee hereunder with respect to the
Securities and the Trust.

     (c)  No Institutional Trustee shall be liable for the acts or omissions to
act of any Successor Institutional Trustee.

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<PAGE>

     (d)  The Holders of the Capital Securities will have no right to vote to
appoint, remove or replace the Administrators, which voting rights, including
the right to appoint, remove or replace Administrators, either with or without
cause, are vested exclusively in the Holder of the Common Securities by
providing written notice to the Institutional Trustee. Each notice shall include
the name and address of the successor Administrator.

     Section 4.4.  Institutional Trustee Vacancies. If the Institutional Trustee
ceases to hold office for any reason a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Institutional Trustee shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a trustee appointed in accordance with Section 4.3.

     Section 4.5.  Effect of Vacancies. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of the Institutional Trustee shall not operate to dissolve,
terminate or annul the Trust or terminate this Declaration.

     Section 4.6.  Meetings of the Institutional Trustee and the Administrators.
Meetings of the Administrators shall be held from time to time upon the call of
an Administrator. Regular meetings of the Administrators may be held in person
in the United States or by telephone, at a place (if applicable) and time fixed
by resolution of the Administrators. Notice of any in-person meetings of the
Institutional Trustee with the Administrators or meetings of the Administrators
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 Institutional Trustee
with the Administrators or meetings of the Administrators 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 the Institutional Trustee or an Administrator, as the case may be,
at a meeting shall constitute a waiver of notice of such meeting except where
the Institutional Trustee or an Administrator, as the case may be, attends a
meeting for the express purpose of objecting to the transaction of any activity
on the grounds that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Institutional Trustee
or the Administrators, as the case may be, may be taken at a meeting by vote of
the Institutional Trustee or a majority vote of the Administrators present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Institutional Trustee or the Administrators. Meetings of
the Institutional Trustee and the Administrators together shall be held from
time to time upon the call of the Institutional Trustee or an Administrator.

     Section 4.7.  Delegation of Power.

     (a)  Any Administrator may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 that is
a U.S. Person his or her power for the purpose of executing any documents
contemplated in Section 2.6; and

                                       26

<PAGE>

     (b)  the Administrators shall have power to delegate from time to time to
such of their number the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Administrators
or otherwise as the Administrators 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 4.8.  Conversion, Consolidation or Succession to Business. Any
Person into which the Institutional Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Institutional Trustee shall be a party,
or any Person succeeding to all or substantially all the corporate trust
business of the Institutional Trustee shall be the successor of the
Institutional Trustee hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.

                                   ARTICLE V
                                 DISTRIBUTIONS

     Section 5.1.  Distributions. Holders shall receive Distributions in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Capital 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 or any
principal on the Debentures held by the Institutional Trustee, the Institutional
Trustee shall and is directed, to the extent funds are available for that
purpose, to make a distribution (a "Distribution") of such amounts to Holders.

                                   ARTICLE VI
                             ISSUANCE OF SECURITIES

     Section 6.1.  General Provisions Regarding Securities.

     (a)  The Administrators shall, on behalf of the Trust, issue one series of
Capital Securities substantially in the form of Exhibit A-1 representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I and one series of Common Securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I. The Trust shall issue no securities or other interests
in the assets of the Trust other than the Capital Securities and the Common
Securities. The Capital Securities rank pari passu to, and payment thereon shall
be made Pro Rata with, the Common Securities except that, where an Event of
Default has occurred and is continuing, 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 Capital Securities as set forth in Annex I.

     (b)  The Certificates shall be signed on behalf of the Trust by one or
more Administrators. Such signature shall be the facsimile or manual signature
of any Administrator. In case any Administrator of the Trust who shall have
signed any of the Securities shall cease to

                                       27

<PAGE>

be such Administrator 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 Administrator, 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 an Administrator of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not such an Administrator. A Capital Security shall not be valid
until authenticated by the facsimile or manual signature of an Authorized
Officer of the Institutional Trustee. Such signature shall be conclusive
evidence that the Capital Security has been authenticated under this
Declaration. Upon written order of the Trust signed by one Administrator, the
Institutional Trustee shall authenticate the Capital Securities for original
issue. The Institutional Trustee may appoint an authenticating agent that is a
U.S. Person acceptable to the Trust to authenticate the Capital Securities. A
Common Security need not be so authenticated.

     (c)  The Capital Securities issued to QIBs shall be, except as provided in
Section 6.4, Book-Entry Capital Securities issued in the form of one or more
Global Capital Securities registered in the name of the Depositary, or its
nominee and deposited with the Depositary or a custodian for the Depositary for
credit by the Depositary to the respective accounts of the Depositary
Participants thereof (or such other accounts as they may direct). The Capital
Securities issued to a Person other than a QIB shall be issued in the form of a
Definitive Capital Securities Certificate.

     (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.

     (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.

     (f)  Every Person, by virtue of having become a Holder 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 and the
Guarantee.

     Section 6.2.  Paying Agent, Transfer Agent and Registrar. The Trust shall
maintain in Hartford, Connecticut, an office or agency where the Capital
Securities may be presented for payment ("Paying Agent"), and an office or
agency where Securities may be presented for registration of transfer or
exchange (the "Transfer Agent"). The Trust shall keep or cause to be kept at
such office or agency a register for the purpose of registering Securities,
transfers and exchanges of Securities, such register to be held by a registrar
(the "Registrar"). The Administrators may appoint the Paying Agent, the
Registrar and the Transfer Agent and may appoint one or more additional Paying
Agents or one or more co-Registrars, or one or more co-Transfer Agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent, the term "Registrar" includes any additional registrar
or co-Registrar and the term "Transfer Agent" includes any additional transfer
agent. The Administrators may change any Paying Agent, Transfer Agent or
Registrar at any time without prior notice to any Holder. The Administrators
shall notify the Institutional Trustee of the name and address of any Paying
Agent, Transfer Agent and Registrar not a party to this Declaration. The
Administrators hereby initially appoint the Institutional Trustee to act as
Paying Agent,

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<PAGE>

Transfer Agent and Registrar for the Capital Securities and the Common
Securities. The Institutional Trustee or any of its Affiliates in the United
States may act as Paying Agent, Transfer Agent or Registrar.

     Section 6.3.  Form and Dating. The Capital Securities and the Institutional
Trustee's certificate of authentication thereon shall be substantially in the
form of Exhibit A-1, and the Common Securities shall be substantially in the
form of Exhibit A-2, each of which is hereby incorporated in and expressly made
a part of this Declaration. Certificates may be typed, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrators, as conclusively evidenced by their execution thereof. The
Securities may have letters, numbers, notations or other marks of identification
or designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the
Sponsor). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Institutional Trustee in writing.
Each Capital Security shall be dated on or before the date of its
authentication. The terms and provisions of the Securities set forth in Annex I
and the forms of Securities set forth in Exhibits A-1 and A-2 are part of the
terms of this Declaration and to the extent applicable, the Institutional
Trustee, the Administrators and the Sponsor, by their execution and delivery of
this Declaration, expressly agree to such terms and provisions and to be bound
thereby. Capital Securities will be issued only in blocks having a stated
liquidation amount of not less than $500,000.00 and any multiple of $1,000.00 in
excess thereof.

     The Capital Securities were offered and sold by the Trust pursuant to the
Placement Agreement in definitive, registered form without coupons and with the
Restricted Securities Legend.

     Section 6.4   Book-Entry Capital Securities.

     (a)  A Global Capital Security may be exchanged, in whole or in part, for
Definitive Capital Securities Certificates registered in the names of Owners
only if such exchange complies with Article VIII and (i) the Depositary advises
the Administrators and the Institutional Trustee in writing that the Depositary
is no longer willing or able properly to discharge its responsibilities with
respect to the Global Capital Security, and no qualified successor is appointed
by the Administrators within ninety (90) days of receipt of such notice, (ii)
the Depositary ceases to be a clearing agency registered under the Exchange Act
and the Administrators fail to appoint a qualified successor within ninety (90)
days of obtaining knowledge of such event, (iii) the Administrators at their
option advise the Institutional Trustee in writing that the Trust elects to
terminate the book-entry system through the Depositary or (iv) an Indenture
Event of Default has occurred and is continuing. Upon the occurrence of any
event specified in clause (i), (ii), (iii) or (iv) above, the Administrators
shall notify the Depositary and instruct the Depositary to notify all Owners of
Book-Entry Capital Securities and the Institutional Trustee of the occurrence of
such event and of the availability of Definitive Capital Securities Certificates
to Owners of the Capital Securities requesting the same. Upon the issuance of
Definitive Capital Securities Certificates, the Administrators and the
Institutional Trustee shall recognize the Holders of the Definitive Capital
Securities Certificates as Holders.

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Notwithstanding the foregoing, if an Owner of a beneficial interest in a Global
Capital Security wishes at any time to transfer an interest in such Global
Capital Security to a Person other than a QIB, such transfer shall be effected,
subject to the Applicable Depository Procedures, in accordance with the
provisions of this Section 6.4 and Article VIII, and the transferee shall
receive a Definitive Capital Securities Certificate in connection with such
transfer. A holder of a Definitive Capital Securities Certificate that is a QIB
may upon request, and in accordance with the provisions of this Section 6.4 and
Article VIII, exchange such Definitive Capital Securities Certificate for a
beneficial interest in a Global Capital Security.

     (b)  If any Global Capital Security is to be exchanged for Definitive
Capital Securities Certificates or canceled in part, or if any Definitive
Capital Securities Certificate is to be exchanged in whole or in part for any
Global Capital Security, then either (i) such Global Capital Security shall be
so surrendered for exchange or cancellation as provided in this Section 6.4 and
Article VIII or (ii) the aggregate liquidation amount represented by such Global
Capital Security shall be reduced, subject to Section 6.3, or increased by an
amount equal to the liquidation amount represented by that portion of the Global
Capital Security to be so exchanged or canceled, or equal to the liquidation
amount represented by such Definitive Capital Securities Certificates to be so
exchanged for any Global Capital Security, as the case may be, by means of an
appropriate adjustment made on the records of the Securities Registrar,
whereupon the Institutional Trustee, in accordance with the Applicable
Depositary Procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender to the Administrators or the Registrar of any Global Capital Security
or Securities by the Depositary, accompanied by registration instructions, the
Administrators, or any one of them, shall execute the Definitive Capital
Securities Certificates in accordance with the instructions of the Depositary.
None of the Registrar, Administrators, or the Institutional Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be fully protected in relying on, such instructions.

     (c)  Every Definitive Capital Securities Certificate executed and delivered
upon registration or transfer of, or in exchange for or in lieu of, a Global
Capital Security or any portion thereof shall be executed and delivered in the
form of, and shall be, a Global Capital Security, unless such Definitive Capital
Securities Certificate is registered in the name of a Person other than the
Depositary for such Global Capital Security or a nominee thereof.

     (d)  The Depositary or its nominee, as registered owner of a Global Capital
Security, shall be the Holder of such Global Capital Security for all purposes
under this Declaration and the Global Capital Security, and Owners with respect
to a Global Capital Security shall hold such interests pursuant to the
Applicable Depositary Procedures. The Registrar, the Administrators and the
Institutional Trustee shall be entitled to deal with the Depositary for all
purposes of this Declaration relating to the Global Capital Securities
(including the payment of the liquidation amount of and Distributions on the
Book-Entry Capital Securities represented thereby and the giving of instructions
or directions by Owners of Book-Entry Capital Securities represented thereby and
the giving of notices) as the sole Holder of the Book-Entry Capital Securities
represented thereby and shall have no obligations to the Owners thereof. None of
the Administrators, the Institutional Trustee nor the Registrar shall have any
liability in respect of any transfers effected by the Depositary.

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<PAGE>

     (e)  The rights of the Owners of the Book-Entry Capital Securities shall be
exercised only through the Depositary and shall be limited to those established
by law, the Applicable Depositary Procedures and agreements between such Owners
and the Depositary and/or the Depositary Participants; provided, solely for the
purpose of determining whether the Holders of the requisite amount of Capital
Securities have voted on any matter provided for in this Declaration, to the
extent that Capital Securities are represented by a Global Capital Security, the
Administrators and the Institutional Trustee may conclusively rely on, and shall
be fully protected in relying on, any written instrument (including a proxy)
delivered to the Institutional Trustee by the Depositary setting forth the
Owners' votes or assigning the right to vote on any matter to any other Persons
either in whole or in part. To the extent that Capital Securities are
represented by a Global Capital Security, the initial Depositary will make
book-entry transfers among the Depositary Participants and receive and transmit
payments on the Capital Securities that are represented by a Global Capital
Security to such Depositary Participants, and none of the Sponsor, the
Administrators or the Institutional Trustee shall have any responsibility or
obligation with respect thereto.

     (f)  To the extent that a notice or other communication to the Holders is
required under this Declaration, for so long as Capital Securities are
represented by a Global Capital Security, the Administrator and the
Institutional Trustee shall give all such notices and communications to the
Depositary, and shall have no obligations to the Owners.

     Section 6.5.  Mutilated, Destroyed, Lost or Stolen Certificates.

If:
     (a)  any mutilated Certificates should be surrendered to the Registrar, or
if the Registrar shall receive evidence to its satisfaction of the destruction,
loss or theft of any Certificate; and

     (b)  there shall be delivered to the Registrar, the Administrators and the
Institutional Trustee such security or indemnity as may be required by them to
keep each of them harmless;

     then, in the absence of notice that such Certificate shall have been
acquired by a protected purchaser, an Administrator on behalf of the Trust shall
execute (and in the case of a Capital Security Certificate, the Institutional
Trustee shall 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 6.5, the Registrar or the Administrators may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

     Section 6.6.  Temporary Securities. Until definitive Securities are ready
for delivery, the Administrators may prepare and, in the case of the Capital
Securities, the Institutional Trustee shall authenticate, temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Administrators consider appropriate for
temporary Securities. Without unreasonable delay, the Administrators shall

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<PAGE>

prepare and, in the case of the Capital Securities, the Institutional Trustee
shall authenticate, definitive Securities in exchange for temporary Securities.

     Section 6.7.  Cancellation. The Administrators at any time may deliver
Securities to the Institutional Trustee for cancellation. The Registrar shall
forward to the Institutional Trustee any Securities surrendered to it for
registration of transfer, redemption or payment. The Institutional Trustee shall
promptly cancel all Securities surrendered for registration of transfer,
payment, replacement or cancellation and shall dispose of such canceled
Securities as the Administrators direct. The Administrators may not issue new
Securities to replace Securities that have been paid or that have been delivered
to the Institutional Trustee for cancellation.

     Section 6.8   CUSIP Numbers. The Trust in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Institutional
Trustee shall use CUSIP numbers in notice of redemption as a convenience to
Holders, provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption and that
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Trust shall
promptly notify the Institutional Trustee in writing of any change in the CUSIP
numbers.

     Section 6.9.  Rights of Holders; Waivers of Past Defaults.

     (a)  The legal title to the Trust Property is vested exclusively in the
Institutional Trustee (in its capacity as such) in accordance with Section 2.5,
and the Holders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Securities and they shall have no right to call for any partition or division of
property, profits or rights of the Trust except as described below. The
Securities shall be personal property giving only the rights specifically set
forth therein and in this Declaration. The Securities shall have no preemptive
or similar rights.

     (b)  For so long as any Capital Securities remain outstanding, if upon an
Indenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of a Majority in liquidation amount of the Capital Securities then
outstanding shall have the right to make such declaration by a notice in writing
to the Institutional Trustee, the Sponsor and the Debenture Trustee.

     At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as provided in the
Indenture, if the Institutional Trustee fails to annul any such declaration and
waive such default, the Holders of a Majority in liquidation amount of the
Capital Securities, by written notice to the Institutional Trustee, the Sponsor
and the Debenture Trustee, may rescind and annul such declaration and its
consequences if:

     (i)  the Debenture Issuer has paid or deposited with the Debenture Trustee
a sum sufficient to pay

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<PAGE>

          (A)  all overdue installments of interest on all of the Debentures,

          (B)  any accrued Additional Interest on all of the Debentures,

          (C)  the principal of (and premium, if any, on) any Debentures that
have become due otherwise than by such declaration of acceleration and interest
and Additional Interest thereon at the rate borne by the Debentures, and

          (D)  all sums paid or advanced by the Debenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and advances
of the Debenture Trustee and the Institutional Trustee, their agents and
counsel; and

     (ii) all Events of Default with respect to the Debentures, other than the
non-payment of the principal of the Debentures that has become due solely by
such acceleration, have been cured or waived as provided in Section 5.7 of the
Indenture.

     The Holders of at least a Majority in liquidation amount of the Securities
may, on behalf of the Holders of all the Capital Securities, waive any past
default or Event of Default, except a default or Event of Default in the payment
of principal or interest (unless such default or Event of Default has been cured
and a sum sufficient to pay all matured installments of interest and principal
due otherwise than by acceleration has been deposited with the Debenture
Trustee) or a default or Event of Default in respect of a covenant or provision
that under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding Debenture. No such rescission shall affect any
subsequent default or impair any right consequent thereon.

     Upon receipt by the Institutional Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of any part of
the Capital Securities, a record date shall be established for determining
Holders of outstanding Capital Securities entitled to join in such notice, which
record date shall be at the close of business on the day the Institutional
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice that has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 6.9.

     (c)  Except as otherwise provided in paragraphs (a) and (b) of this Section
6.9, the Holders of at least a Majority in liquidation amount of the Securities
may, on behalf of the Holders of all the Capital Securities, waive any past
default or Event of Default and its

                                       33

<PAGE>

consequences. Upon such waiver, any such default or Event of Default shall cease
to exist, and any default or Event of Default 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 or impair
any right consequent thereon.

                                   ARTICLE VII
                      DISSOLUTION AND TERMINATION OF TRUST

     Section 7.1.  Dissolution and Termination of Trust.

     (a)  The Trust shall dissolve on the first to occur of:

          (i)    unless earlier dissolved, on September 29, 2038, the
expiration of the term of the Trust;

          (ii)   upon a Bankruptcy Event with respect to the Sponsor, the Trust
or the Debenture Issuer;

          (iii)  (other than in connection with a merger, consolidation or
similar transaction not prohibited by the Indenture, this Declaration or the
Guarantee, as the case may be) upon the filing of a certificate of dissolution
or its equivalent with respect to the Sponsor, or upon the revocation of the
charter of the Sponsor and the expiration of 90 days after the date of
revocation without a reinstatement thereof;

          (iv)   upon the distribution of the Debentures to the Holders of the
Securities in accordance with Section 3 of Annex I;

          (v)    upon exercise of the right of the Holder of all of the
outstanding Common Securities to dissolve the Trust as provided in Annex I
hereto;

          (vi)   upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor, the Trust or the Debenture Issuer;

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

          (viii) before the issuance of any Securities, with the consent of the
Institutional Trustee and the Sponsor.

     (b)  As soon as is practicable after the occurrence of an event referred to
in Section 7.1(a), and after satisfaction of liabilities to creditors of the
Trust as required by applicable law, including of the Statutory Trust Act, and
subject to the terms set forth in Annex I, the Institutional Trustee shall
terminate the Trust by filing a certificate of cancellation with the Secretary
of State of the State of Connecticut.

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<PAGE>

     (c)  The provisions of Section 2.9 and Article IX shall survive the
termination of the Trust.

                                  ARTICLE VIII
                              TRANSFER OF INTERESTS

     Section 8.1.  General.

     (a)  Subject to Section 6.4 and Section 8.1(c), where Capital Securities
are presented to the Registrar or co-registrar with a request to register a
transfer or to exchange them for an equal number of Capital Securities
represented by different certificates, the Registrar shall register the transfer
or make the exchange if its requirements for such transactions are met. To
permit registrations of transfer and exchanges, the Trust shall issue and the
Institutional Trustee shall authenticate Capital Securities at the Registrar's
request.

     (b)  Upon issuance of the Common Securities, the Sponsor shall acquire and
retain beneficial and record ownership of the Common Securities and for so long
as the Securities remain outstanding, the Sponsor shall maintain 100% ownership
of the Common Securities; provided, however, that any permitted successor of the
Sponsor, in its capacity as Debenture Issuer under the Indenture, that is a U.S.
Person may succeed to the Sponsor's ownership of the Common Securities.

     (c)  Capital 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. To the fullest extent permitted by applicable law,
any transfer or purported transfer of any Security not made in accordance with
this Declaration shall be null and void and will be deemed to be of no legal
effect whatsoever and any such transferee shall be deemed not to be the holder
of such Capital Securities for any purpose, including but not limited to the
receipt of Distributions on such Capital Securities, and such transferee shall
be deemed to have no interest whatsoever in such Capital Securities.

     (d)  The Registrar shall provide for the registration of Securities and of
transfers of Securities, which will be effected without charge but only upon
payment (with such indemnity as the Registrar may require) in respect of any tax
or other governmental charges that may be imposed in relation to it. Upon
surrender for registration of transfer of any Securities, the Registrar shall
cause one or more new Securities of the same tenor to be issued in the name of
the designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Security surrendered for
registration of transfer shall be canceled by the Institutional Trustee pursuant
to Section 6.7. A transferee of a Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Security. By acceptance of a Security, each transferee shall be
deemed to have agreed to be bound by this Declaration.

     (e)  The Trust shall not be required (i) to issue, register the transfer
of, or exchange any Securities during a period beginning at the opening of
business 15 days before the day of any

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<PAGE>

selection of Securities for redemption and ending at the close of business on
the earliest date on which the relevant notice of redemption is deemed to have
been given to all Holders of the Securities to be redeemed, or (ii) to register
the transfer or exchange of any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in part.

     Section 8.2.  Transfer Procedures and Restrictions.

     (a)  The Capital Securities shall bear the Restricted Securities Legend,
which shall not be removed unless there is delivered to the Trust such
satisfactory evidence, which may include an opinion of counsel licensed to
practice law in the State of Connecticut, as may be reasonably required by the
Trust, that neither the legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of the Securities Act. Upon provision of such satisfactory evidence, the
Institutional Trustee, at the written direction of the Trust, shall authenticate
and deliver Capital Securities that do not bear the legend.

     (b)  Except as permitted by Section 8.2(a), each Capital Security shall
bear a legend (the "Restricted Securities Legend") in substantially the
following form and a Capital Security shall not be transferred except in
compliance with such legend, unless otherwise determined by the Sponsor, upon
the advice of counsel experienced in securities law, in accordance with
applicable law:

     [If the Capital Security is to be Global Capital Security- THIS CAPITAL
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
("DTC") OR A NOMINEE OF DTC. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION, AND NO TRANSFER OF
THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE
BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF
DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

     UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC TO OZARK CAPITAL STATUTORY TRUST II OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]

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<PAGE>

     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE SPONSOR OR THE TRUST, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN
ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE SPONSOR'S AND
THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY
OF WHICH MAY BE OBTAINED FROM THE SPONSOR OR THE TRUST. HEDGING TRANSACTIONS
INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.

     THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH
A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN ASSETS" OF
ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF
THIS

                                       37

<PAGE>

SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE
SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF
ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH
PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA
OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR
ADMINISTRATIVE EXEMPTION.

     THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
LIQUIDATION AMOUNT OF NOT LESS THAN $500,000.00 (500 SECURITIES) AND MULTIPLES
OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF SECURITIES IN A BLOCK
HAVING A LIQUIDATION AMOUNT OF LESS THAN $500,000.00 SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL EFFECT WHATSOEVER.

     THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

     (c)  To permit registrations of transfers and exchanges, the Trust shall
execute and the Institutional Trustee shall authenticate Capital Securities at
the Registrar's request.

     (d)  Registrations of transfers or exchanges will be effected without
charge, but only upon payment (with such indemnity as the Registrar or the
Sponsor may require) in respect of any tax or other governmental charge that may
be imposed in relation to it.

     (e)  All Capital Securities issued upon any registration of transfer or
exchange pursuant to the terms of this Declaration shall evidence the same
security and shall be entitled to the same benefits under this Declaration as
the Capital Securities surrendered upon such registration of transfer or
exchange.

     Section 8.3.  Deemed Security Holders. Subject to Section 6.4(e), the
Trust, the Administrators, the Institutional Trustee, the Paying Agent, the
Transfer Agent or the Registrar may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust, the
Administrators, the Institutional Trustee, the Paying Agent, the Transfer Agent
or the Registrar shall have actual or other notice thereof.

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<PAGE>

                                   ARTICLE IX
                           LIMITATION OF LIABILITY OF
             HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS

     Section 9.1.  Liability.

     (a)  Except as expressly set forth in this Declaration, the 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; or

          (ii)   required to pay to the Trust or to any Holder of the 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 the Statutory Trust Act, the Holders of the Capital
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 Connecticut.

     Section 9.2.  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 negligence, bad faith 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, if selected by such Indemnified Person, has been selected by
such Indemnified Person 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.

                                       39

<PAGE>

     Section 9.3.  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, are agreed by the
parties hereto to replace such other duties and liabilities of the Indemnified
Person.

     (b)  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 9.4.  Indemnification.

     (a)  The Sponsor shall indemnify, to the full extent permitted by law, any
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) arising out of or in connection with the acceptance or
administration of this Declaration by reason of the fact that he is or was an
Indemnified Person against expenses (including reasonable attorneys' fees and
expenses), 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 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.

     (b)  The Sponsor shall indemnify, to the full extent permitted by law, any
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 arising out of or in connection with
the acceptance or administration of this Declaration by reason of the fact that
he is or was an Indemnified Person against expenses (including reasonable
attorneys' fees and expenses) actually and reasonably incurred by him in
connection with the defense or

                                       40

<PAGE>

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;
provided, however, that no such indemnification shall be made in respect of any
claim, issue or matter as to which such Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that 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 shall deem proper.

     (c)  To the extent that an 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 (a) and (b) of this Section
9.4, or in defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses (including
reasonable attorneys' fees and expenses) actually and reasonably incurred by him
in connection therewith.

     (d)  Any indemnification of an Administrator under paragraphs (a) and (b)
of this Section 9.4 (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Indemnified Person is proper in the circumstances because
he has met the applicable standard of conduct set forth in paragraphs (a) and
(b). Such determination shall be made (i) by the Administrators by a majority
vote of a Quorum consisting of such Administrators who were not parties to such
action, suit or proceeding, (ii) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Administrators so directs, by
independent legal counsel in a written opinion, or (iii) by the Common Security
Holder of the Trust.

     (e)  To the fullest extent permitted by law, expenses (including reasonable
attorneys' fees and expenses) incurred by an Indemnified Person in defending a
civil, criminal, administrative or investigative action, suit or proceeding
referred to in paragraphs (a) and (b) of this Section 9.4 shall be paid by the
Sponsor in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Indemnified Person to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Sponsor as authorized in this Section 9.4.
Notwithstanding the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the Administrators by a
majority vote of a Quorum of disinterested Administrators, (ii) if such a Quorum
is not obtainable, or, even if obtainable, if a Quorum of disinterested
Administrators so directs, by independent legal counsel in a written opinion or
(iii) by the Common Security Holder of the Trust, that, based upon the facts
known to the Administrators, counsel or the Common Security Holder at the time
such determination is made, such Indemnified Person acted in bad faith or in a
manner that such Indemnified Person did not believe to be in the best interests
of the Trust, or, with respect to any criminal proceeding, that such 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 Administrators,
independent legal counsel or the Common Security Holder reasonably determine
that such Indemnified Person deliberately breached his duty to the Trust or its
Common or Capital Security Holders.

                                       41

<PAGE>

     (f)  The Institutional Trustee, at the sole cost and expense of the
Sponsor, retains the right to representation by counsel of its own choosing in
any action, suit or any other proceeding for which it is indemnified under
paragraphs (a) and (b) of this Section 9.4, without affecting its right to
indemnification hereunder or waiving any rights afforded to it under this
Declaration or applicable law.

     (g)  The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 9.4 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 Sponsor or Capital 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 9.4 shall be deemed to be provided by a
contract between the Sponsor and each Indemnified Person who serves in such
capacity at any time while this Section 9.4 is in effect. Any repeal or
modification of this Section 9.4 shall not affect any rights or obligations then
existing.

     (h)  The Sponsor or the Trust may purchase and maintain insurance on behalf
of any Person who is or was an Indemnified Person against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Sponsor would have the power to indemnify him
against such liability under the provisions of this Section 9.4.

     (i)  For purposes of this Section 9.4, 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
9.4 with respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had continued.

     (j)  The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.4 shall, unless otherwise provided when
authorized or ratified, (i) continue as to a Person who has ceased to be an
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a Person; and (ii) survive the termination or expiration
of this Declaration or the earlier removal or resignation of an Indemnified
Person.

     Section 9.5.  Outside Businesses. Any Covered Person, the Sponsor and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. None of any Covered Person, the Sponsor or
the Institutional Trustee shall be obligated to present any particular
investment or other opportunity to the Trust

                                       42

<PAGE>

even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor and the
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 and the
Institutional Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.

     Section 9.6.  Compensation, Fee. The Sponsor agrees:

     (a)  to pay to the Institutional Trustee from time to time such
compensation for all services rendered by it hereunder as the parties shall
agree (in the case of the Institutional Trustee as of the date hereof, as
provided in the Fee Agreement) from time to time (which compensation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust); and

     (b)  except as otherwise expressly provided herein or in a writing between
the parties, to reimburse the Institutional Trustee upon request for all
reasonable, documented expenses, disbursements and advances incurred or made by
the Institutional Trustee in accordance with any provision of this Declaration
(including the reasonable compensation and the expenses and disbursements of
their respective agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence, bad faith or willful
misconduct.

     The provisions of this Section 9.6 shall survive the dissolution of the
Trust and the termination of this Declaration and the removal or resignation of
the Institutional Trustee.

     No Institutional Trustee may claim any lien or charge on any Trust Property
as a result of any amount due pursuant to this Section 9.6.

                                    ARTICLE X
                                   ACCOUNTING

     Section 10.1. 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 10.2. Certain Accounting Matters.

     (a)  At all times during the existence of the Trust, the Administrators
shall keep, or cause to be kept at the principal office of the Trust in the
United States, as defined for purposes of Treasury Regulations section
301.7701-7, 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, at the Sponsor's expense, in accordance with generally
accepted accounting principles in the United States, consistently applied. The
books of account and the records of the Trust shall be examined by and reported
upon as of the end of each Fiscal Year

                                       43

<PAGE>

of the Trust by a firm of independent certified public accountants selected by
the Administrators.

     (b)  The Administrators shall cause to be duly prepared and delivered to
each of the Holders of Securities Form 1099 or such other 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 Administrators shall endeavor
to deliver all such statements within 30 days after the end of each Fiscal Year
of the Trust.

     (c)  The Administrators, at the Sponsor's expense, shall cause to be duly
prepared at the principal office of the Trust in the United States, as defined
for purposes of Treasury Regulations section 301.7701-7, and filed 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 Administrators on behalf of the Trust
with any state or local taxing authority.

     Section 10.3. Banking. The Trust shall maintain in the United States, as
defined for purposes of Treasury Regulations section 301.7701-7, 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 Property Account and no
other funds of the Trust shall be deposited in the Property Account. The sole
signatories for such accounts (including the Property Account) shall be
designated by the Institutional Trustee.

     Section 10.4. Withholding. The Institutional Trustee or any Paying Agent
and the Administrators shall comply with all withholding requirements under
United States federal, state and local law. The Institutional Trustee or any
Paying Agent shall request, and each Holder shall provide to the Institutional
Trustee or any Paying Agent, such forms or certificates as are necessary to
establish an exemption from withholding with respect to the Holder, and any
representations and forms as shall reasonably be requested by the Institutional
Trustee or any Paying Agent to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrators 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 Institutional
Trustee or any Paying Agent is required to withhold and pay over any amounts to
any authority with respect to distributions or allocations to any Holder, the
amount withheld shall be deemed to be a Distribution in the amount of the
withholding to the Holder. In the event of any claimed overwithholding, Holders
shall be limited to an action against the applicable jurisdiction. If the amount
required to be withheld was not withheld from actual Distributions made, the
Institutional Trustee or any Paying Agent may reduce subsequent Distributions by
the amount of such withholding.

                                       44

<PAGE>

                                   ARTICLE XI
                             AMENDMENTS AND MEETINGS

     Section 11.1. Amendments.

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

     (b)  Notwithstanding any other provision of this Article XI, an amendment
may be made, and any such purported amendment shall be valid and effective only
if:

          (i)    the Institutional Trustee shall have first received

                 (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

          (ii)   the result of such amendment would not be to

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

                 (B)  cause the Trust to be deemed to be an Investment Company
          required to be registered under the Investment Company Act.

     (c)  Except as provided in Section 11.1 (d), (e) or (h), no amendment shall
be made, and any such purported amendment shall be void and ineffective unless
the Holders of a Majority in liquidation amount of the Capital Securities shall
have consented to such amendment.

     (d)  In addition to and notwithstanding any other provision in this
Declaration, without the consent of each affected Holder, 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 or change any
conversion or exchange provisions or (ii) restrict the right of a Holder to
institute suit for the enforcement of any such payment on or after such date.

     (e)  Section 9.1(b) and 9.l(c) and this Section 11.1 shall not be amended
without the consent of all of the Holders of the Securities.

                                       45

<PAGE>

     (f)  Article III shall not be amended without the consent of the Holders of
a Majority in liquidation amount of the Common Securities.

     (g)  The rights of the Holders of the Capital Securities under Article IV
to appoint and remove the Institutional Trustee shall not be amended without the
consent of the Holders of a Majority in liquidation amount of the Capital
Securities.

     (h)  This Declaration may be amended by the Institutional Trustee and the
Holders of a Majority in liquidation amount of the Common Securities without the
consent of the Holders of the Capital 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; or

          (iv)   modify, eliminate or add to any provision of this Declaration
     to such extent as may be necessary to ensure that the Trust will be
     classified for United States federal income tax purposes at all times as a
     grantor trust and will not be required to register as an "investment
     company" under the Investment Company Act (including without limitation to
     conform to any change in Rule 3a-5, Rule 3a-7 or any other applicable rule
     under the Investment Company Act or written change in interpretation or
     application thereof by any legislative body, court, government agency or
     regulatory authority) which amendment does not have a material adverse
     effect on the rights, preferences or privileges of the Holders of
     Securities; provided, however, that no such modification, elimination or
     addition referred to in clauses (i), (ii) or (iii) shall adversely affect
     in any material respect the powers, preferences or special rights of
     Holders of Capital Securities.

     Section 11.2. 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 Administrators (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 or the terms of the
Securities. The Administrators shall call a meeting of the Holders of such class
if directed to do so by the Holders of at least 10% in liquidation amount of
such class of Securities. Such direction shall be given by delivering to the
Administrators one or more calls in a writing stating that the signing Holders
of the Securities wish to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. Any Holders of the Securities
calling a meeting shall specify in writing the Certificates held by the Holders
of the Securities exercising the right to call a meeting and only those
Securities represented by such Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.

                                       46

<PAGE>

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

          (i)    notice of any such meeting shall be given to all the Holders of
     the Securities having a right to vote at such meeting at least 7 days and
     not more than 60 days before the date of such meeting. Whenever a vote,
     consent or approval of the Holders of the Securities is permitted or
     required under this Declaration, such vote, consent or approval may be
     given at a meeting of the Holders of the Securities. Any action that may be
     taken at a meeting of the Holders of the Securities may be taken without a
     meeting if a consent in writing setting forth the action so taken is signed
     by the Holders of the 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 the 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 the
     Securities entitled to vote who have not consented in writing. The
     Administrators may specify that any written ballot submitted to the Holders
     of the Securities for the purpose of taking any action without a meeting
     shall be returned to the Trust within the time specified by the
     Administrators;

          (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 the
     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 Connecticut relating to
     proxies, and judicial interpretations thereunder, as if the Trust were a
     Connecticut corporation and the Holders of the Securities were stockholders
     of a Connecticut corporation; each meeting of the Holders of the Securities
     shall be conducted by the Administrators or by such other Person that the
     Administrators may designate; and

          (iii)  unless the Statutory Trust Act, this Declaration, or the terms
     of the Securities or the Trust Indenture Act otherwise provides, the
     Administrators, 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 the 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; provided, however, that
     each meeting shall be conducted in the United States (as that term is
     defined in Treasury regulations section 301.7701-7).

                                       47

<PAGE>

                                   ARTICLE XII
                    REPRESENTATIONS OF INSTITUTIONAL TRUSTEE

     Section 12.1. Representations and Warranties of Institutional Trustee. The
initial Institutional Trustee represents and warrants to the Trust and to the
Sponsor at the date of this Declaration, and each Successor Institutional
Trustee represents and warrants to the Trust and the Sponsor at the time of the
Successor Institutional Trustee's acceptance of its appointment as Institutional
Trustee, that:

     (a)  the Institutional Trustee is a national banking association with trust
powers, duly organized and validly existing under the laws of the United States
of America with trust power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;

     (b)  the execution, delivery and performance by the Institutional Trustee
of this Declaration has been duly authorized by all necessary corporate action
on the part of the Institutional Trustee. This Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity (regardless of
whether considered in a proceeding in equity or at law);

     (c)  the execution, delivery and performance of this Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or bylaws of the Institutional Trustee; and

     (d)  no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee of this Declaration.

                                   ARTICLE XIII

                                  MISCELLANEOUS

     Section 13.1. 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 (which telecopy shall be followed by notice delivered or
mailed by first class mail) or mailed by first class mail, as follows:

     (a)  if given to the Trust in care of the Administrators at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):

                                       48

<PAGE>

          c/o Bank of the Ozarks, Inc.
          P. O. Box 8811
          Little Rock, AR  72231-8811
          Attention: Paul E. Moore
          Telecopy:  (501) 978-2282

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

          U.S. Bank National Association
          225 Asylum Street, Goodwin Square
          Hartford, Connecticut 06103
          Attention: Vice President, Corporate Trust Services
          Telecopy:  860-244-1889

          With a copy to:

          U.S. Bank National Association
          P.O. Box 778
          Boston, Massachusetts 02102-0778
          Attention: Earl W. Dennison, Corporate Trust Services
          Telecopy:  (617) 603-6667

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

          Bank of the Ozarks, Inc.
          P. O. Box 8811
          Little Rock, AR  72231-8811
          Attention: Paul E. Moore
          Telecopy:  (501) 978-2282

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

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

     Section 13.2. Governing Law. This Declaration and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the law of the
State of Connecticut and

                                       49

<PAGE>

all rights and remedies shall be governed by such laws without regard to the
principles of conflict of laws of the State of Connecticut or any other
jurisdiction that would call for the application of the law of any jurisdiction
other than the State of Connecticut; provided, however, that there shall not be
applicable to the Trust, the Institutional Trustee or this Declaration any
provision of the laws (statutory or common) of the State of Connecticut
pertaining to trusts that relate to or regulate, in a manner inconsistent with
the terms hereof (a) the filing with any court or governmental body or agency of
trustee accounts or schedules of trustee fees and charges, (b) affirmative
requirements to post bonds for trustees, officers, agents or employees of a
trust, (c) the necessity for obtaining court or other governmental approval
concerning the acquisition, holding or disposition of real or personal property,
(d) fees or other sums payable to trustees, officers, agents or employees of a
trust, (e) the allocation of receipts and expenditures to income or principal,
or (f) restrictions or limitations on the permissible nature, amount or
concentration of trust investments or requirements relating to the titling,
storage or other manner of holding or investing trust assets.

     Section 13.3. 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 13.4. 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 13.5. 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 Institutional Trustee shall bind and inure to
the benefit of their respective successors and assigns, whether or not so
expressed.

     Section 13.6. 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 13.7. 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 Institutional Trustee and
Administrators to any 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.

                     Signatures appear on the following page

                                       50

<PAGE>

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

                                        U.S. BANK NATIONAL ASSOCIATION,
                                        as Institutional Trustee

                                        By:.
                                            ------------------------------------
                                            Name:
                                            Title:

                                        BANK OF THE OZARKS, INC., as Sponsor

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        OZARK CAPITAL STATUTORY TRUST II

                                        By:
                                           -------------------------------------
                                           Name:  George G. Gleason
                                           Title: Administrator

                                        By:
                                           -------------------------------------
                                           Name:  Mark D. Ross
                                           Title: Administrator

                                        By:
                                           -------------------------------------
                                           Name:  Paul E. Moore
                                           Title: Administrator

                                       51

<PAGE>

                                     ANNEX I

                               TERMS OF SECURITIES

     Pursuant to Section 6.1 of the Amended and Restated Declaration of Trust,
dated as of September 29, 2003 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital 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):

     1.   Designation and Number.

          (a)  14,000 Floating Rate Capital Securities of Ozark Capital
Statutory Trust II (the "Trust"), with an aggregate stated liquidation amount
with respect to the assets of the Trust of Fourteen Million Dollars
($14,000,000) and a stated liquidation amount with respect to the assets of the
Trust of $1,000.00 per Capital Security, are hereby designated for the purposes
of identification only as the "Capital Securities." The Capital Security
Certificates evidencing the Capital 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.

          (b)  433 Floating Rate Common Securities of the Trust (the "Common
Securities") will be evidenced by Common Security Certificates 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 will be payable on each Security for the period
beginning on (and including) the date of original issuance and ending on (but
excluding) December 31, 2003 at a rate per annum of 4.04% and shall bear
interest for each successive period beginning on (and including) December 31,
2003, and each succeeding Distribution Payment Date, and ending on (but
excluding) the next succeeding Distribution Payment Date (each, a "Distribution
Period") at a rate per annum equal to the 3-Month LIBOR, determined as described
below, plus 2.90% (the "Coupon Rate"), applied to the stated liquidation amount
thereof, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee.

     In the event that the 3-Month LIBOR is indeterminable by the methods
described below, the Coupon Rate shall equal the 3-Month LIBOR in effect on the
most recent Determination Date (whether or not 3-Month LIBOR for such period was
in fact determined on such Determination Date) plus 2.90%.

     Distributions in arrears for more than one quarterly period will bear
interest thereon compounded quarterly at the applicable Distribution Rate (to
the extent permitted by law). A Distribution is payable only to the extent that
payments are made in respect of the Debentures

                                      I-1

<PAGE>

held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available therefor. In the event that any date on which a Distribution
is payable on the Securities is not a Business Day, then payment of interest
payable on such date shall be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), with the same force and effect as if made on the date such payment was
originally payable. The amount of interest payable for any Distribution Period
will be calculated by applying the Coupon Rate to the principal amount
outstanding at the commencement of the Distribution Period and multiplying each
such amount by the actual number of days in the Distribution Period concerned
divided by 360. All percentages resulting from any calculations on the Capital
Securities will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% or .09876545 being rounded to 9.87655% or .0987655), and
all dollar amounts used in or resulting from such calculation will be rounded to
the nearest cent (with one-half cent being rounded upward).

     "3-Month LIBOR" means the London interbank offered rate for three-month,
U.S. dollar deposits determined by the Debenture Trustee in the following order
of priority:

          (1)  the rate (expressed as a percentage per annum) for U.S. dollar
     deposits of an amount equal or comparable to the aggregate liquidation
     amount of the Debentures having a three-month maturity that appears on
     Telerate Page 3750 as of 11:00 a.m. (London time) on the particular
     Determination Date (as defined below). "Telerate Page 3750" means the
     display designated as "Page 3750" on the Dow Jones Telerate Service or such
     other page as may replace Page 3750 on that service or such other service
     or services as may be nominated by the British Bankers' Association as the
     information vendor for the purpose of displaying London interbank offered
     rates for U.S. dollar deposits;

          (2)  if such rate does not appear on Telerate Page 3750 as of 11:00
     a.m. (London time) on the Determination Date, 3-Month LIBOR will be the
     arithmetic mean of the rates (expressed as percentages per annum) for U.S.
     dollar deposits of an amount equal or comparable to the aggregate
     liquidation amount of the Debentures having a three-month maturity that
     appear on Reuters Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of
     11:00 a.m. (London time) on such Determination Date;

          (3)  if such rate does not appear on Reuters Page LIBO as of
     11:00 a.m. (London time) on the related Determination Date, the Debenture
     Trustee will request the principal London offices of four leading banks in
     the London interbank market to provide such banks' offered quotations
     (expressed as percentages per annum) to prime banks in the London interbank
     market for U.S. dollar deposits of an amount equal or comparable to the
     aggregate liquidation amount of the Debentures having a three-month
     maturity as of 11:00 a.m. (London time) on such Determination Date. If at
     least two quotations are provided, 3-Month LIBOR will be the arithmetic
     mean of such quotations; and

          (4)  if fewer than two such quotations are provided as requested in
     clause (3) above, the Debenture Trustee will request four major New York
     City banks to provide such banks' offered quotations (expressed as
     percentages per annum) to leading

                                      I-2

<PAGE>

     European banks for loans in U.S. dollars of an amount equal or comparable
     to the aggregate liquidation amount of the Debentures as of 11:00 a.m.
     (London time) on such Determination Date. If at least two such quotations
     are provided, 3-Month LIBOR will be the arithmetic mean of such quotations.

          If the rate for U.S. dollar deposits of an amount equal or comparable
to the aggregate liquidation amount of the Debentures having a three-month
maturity that initially appears on Telerate Page 3750 or Reuters Page LIBO, as
the case may be, as of 11:00 a.m. (London time) on the related Determination
Date is superseded on the Telerate page 3750 or Reuters Page LIBO, as the case
may be, by a corrected rate by 12:00 noon (London time) on such Determination
Date, then the corrected rate as so substituted on the applicable page will be
the applicable 3-Month LIBOR for such Determination Date.

          (5)  The Coupon Rate for any Distribution Period will at no time be
     higher than the maximum rate then permitted by New York law as the same may
     be modified by United States law.

     "Determination Date" means the date that is two London Banking Days (i.e.,
a day in which dealings in deposits in U.S. dollars are transacted in the London
interbank market) preceding the particular Distribution Period for which a
Coupon Rate is being determined.

     (b)  Distributions on the Securities will be cumulative, will accrue from
the date of original issuance, and will be payable, subject to extension of
distribution payment periods as described herein, quarterly in arrears on March
31, June 30, September 30 and December 31 of each year and on the Maturity Date,
commencing on December 31, 2003 (each a "Distribution Payment Date") when, as
and if available for payment. The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures, so long as no
Indenture Event of Default has occurred and is continuing, by deferring the
payment of interest on the Debentures for up to 20 consecutive quarterly periods
(each an "Extension Period") at any time and from time to time, subject to the
conditions described below, although such interest would continue to accrue on
the Debentures at the Distribution Rate compounded quarterly (to the extent
permitted by law) during any Extension Period. No Extension Period may end on a
date other than a Distribution Payment Date. At the end of any such Extension
Period the Debenture Issuer shall pay all interest then accrued and unpaid on
the Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date and provided
further, however, during any such Extension Period, the Debenture Issuer and its
Affiliates shall not, without the consent of the Trustee, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Debenture Issuer's or its
Affiliates' capital stock (other than payments of dividends or distributions to
the Debenture Issuer) or make any guarantee payments with respect to the
foregoing, or (ii) make any payment of principal of or interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Debenture
Issuer or any Affiliate that rank pari passu in all respects with or junior in
interest to the Debentures (other than, with respect to clauses (i) and (ii)
above, (a) repurchases, redemptions or other acquisitions of shares of capital
stock of the Debenture Issuer in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of one or more
employees, officers, directors or

                                      I-3

<PAGE>

consultants, in connection with a dividend reinvestment or stockholder stock
purchase plan or in connection with the issuance of capital stock of the
Debenture Issuer (or securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered into prior to the
applicable Extension Period, (b) as a result of any exchange or conversion of
any class or series of the Debenture Issuer's capital stock (or any capital
stock of a subsidiary of the Debenture Issuer) for any class or series of the
Debenture Issuer's capital stock or of any class or series of the Debenture
Issuer's indebtedness for any class or series of the Debenture Issuer's capital
stock, (c) the purchase of fractional interests in shares of the Debenture
Issuer's capital stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged, (d) any declaration
of a dividend in connection with any stockholders' rights plan, or the issuance
of rights, stock or other property under any stockholders' rights plan, or the
redemption or repurchase of rights pursuant thereto, (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock and any cash payments in lieu of fractional shares
issued in connection therewith, or (f) payments under the Capital Securities
Guarantee). Prior to the termination of any Extension Period, the Debenture
Issuer may further extend such period, provided that such period together with
all such previous and further consecutive extensions thereof shall not exceed 20
consecutive quarterly periods, or extend beyond the Maturity Date. Upon the
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and Additional Interest, the Debenture Issuer may commence a new
Extension Period, subject to the foregoing requirements. No interest or
Additional Interest shall be due and payable during an Extension Period, except
at the end thereof, but each installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional
Interest. If Distributions are deferred, the Distributions due shall be paid on
the date that the related Extension Period terminates to Holders of the
Securities as they appear on the books and records of the Trust on the record
date immediately preceding such date. Distributions on the Securities must be
paid on the dates payable (after giving effect to any Extension Period) to the
extent that the Trust has funds available for the payment of such distributions
in the Property Account of the Trust. The Trust's funds available for
Distribution to the Holders of the Securities will be limited to payments
received from the Debenture Issuer. The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

     (c)  Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates. The relevant record dates shall be 15 days before the relevant
Distribution Payment Date. 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, as the case may be,
when due (taking into account any Extension Period), 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

                                      I-4

<PAGE>

a Business Day (and without any interest or other payment in respect of any such
delay) with the same force and effect as if made on such 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 by the Institutional Trustee and the
Administrators, 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 the
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Trust (each a "Liquidation") other than in connection with a redemption of
the Debentures, the Holders of the Securities will be entitled to receive out of
the assets of the Trust available for distribution to Holders of the Securities,
after satisfaction of liabilities to creditors of the Trust (to the extent not
satisfied by the Debenture Issuer), distributions equal to the lesser of (i) the
aggregate of the stated liquidation amount of $1,000.00 per Security plus
accrued and unpaid Distributions thereon to the date of payment, to the extent
the Trust shall have funds available therefor, and (ii) the amount of assets of
the Trust remaining available for distribution to Holders in liquidation of the
Trust (such amount being, in either case, the "Liquidation Distribution"),
unless in connection with such Liquidation, the Debentures in aggregate stated
principal amount equal to the aggregate stated liquidation amount of such
Securities, with an interest rate equal to the Distribution Rate of, and bearing
accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on, and having the same record date as, such Securities, after
paying or making reasonable provision to pay all claims and obligations of the
Trust in accordance with the Statutory Trust Act, shall be distributed on a Pro
Rata basis to the Holders of the Securities in exchange for such Securities.

     The Sponsor, as the Holder of all of the Common Securities, has the right
at any time to dissolve the Trust (including, without limitation, upon the
occurrence of a Special Event), subject to the receipt by the Debenture Issuer
of prior approval from the Board of Governors of the Federal Reserve System and
any successor federal agency that is primarily responsible for regulating the
activities of the Sponsor (the "Federal Reserve"), if the Sponsor is a bank
holding company, or from the Office of Thrift Supervision and any successor
federal agency that is primarily responsible for regulating the activities of
the Sponsor, (the "OTS") if the Sponsor is a savings and loan holding company,
in either case if then required under applicable capital guidelines or policies
of the Federal Reserve or OTS, as applicable, and, after satisfaction of
liabilities to creditors of the Trust, cause the Debentures to be distributed to
the Holders of the Securities on a Pro Rata basis in accordance with the
aggregate stated liquidation amount thereof.

     If a Liquidation of the Trust occurs as described in clause (i), (ii),
(iii), (v) or (vi) in Section 7.1(a) of the Declaration, the Trust shall be
liquidated by the Institutional Trustee as expeditiously as it determines to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust, to the Holders of the Securities, the Debentures on a Pro Rata basis to
the extent not satisfied by the Debenture Issuer, unless such distribution is
determined by the Institutional Trustee not to be practical, in which event such
Holders will be entitled to receive out of the assets of the Trust available for
distribution to the Holders, after satisfaction of liabilities to creditors of
the Trust to the extent not satisfied by the Debenture Issuer, an amount

                                      I-5

<PAGE>

equal to the Liquidation Distribution. An early Liquidation of the Trust
pursuant to clause (iv) of Section 7.1(a) of the Declaration shall occur if the
Institutional Trustee determines that such Liquidation is possible by
distributing, after satisfaction of liabilities to creditors of Trust, to the
Holders of the Securities on a Pro Rata basis, the Debentures, and such
distribution occurs.

     If, upon any such Liquidation 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 such Capital Securities shall be paid to the Holders of the Trust
Securities on a Pro Rata basis, except that if an Event of Default has occurred
and is continuing, the Capital Securities shall have a preference over the
Common Securities with regard to such distributions.

     After the date for any distribution of the Debentures upon dissolution of
the Trust (i) the Securities of the Trust will be deemed to be no longer
outstanding, (ii) upon surrender of a Holder's Securities certificate, such
Holder of the Securities will receive a certificate representing the Debentures,
or, at the Holder's request, a global debenture representing all or part of the
Debentures, to be delivered upon such distribution, and (iii) any certificates
representing the Securities still outstanding will be deemed to represent
undivided beneficial interests in such of the Debentures as have an aggregate
principal amount equal to the aggregate stated liquidation amount with an
interest rate identical to the Distribution Rate of, and bearing accrued and
unpaid interest equal to accrued and unpaid distributions on, the Securities
until such certificates are presented to the Debenture Issuer or its agent for
transfer or reissuance (and until such certificates are so surrendered, no
payments of interest or principal shall be made to Holders of Securities in
respect of any payments due and payable under the Debentures), and (iv) all
rights of Holders of Securities under the Declaration shall cease, except the
right of such Holders to receive Debentures upon surrender of certificates
representing such Securities.

     4.   Redemption and Distribution.

          (a)  The Debentures will mature on September 29, 2033. The Debentures
may be redeemed by the Debenture Issuer, in whole or in part at any time and
from time to time at any Distribution Payment Date on or after September 29,
2008, at the Redemption Price. In addition, the Debentures may be redeemed by
the Debenture Issuer in whole, but not in part, at any Distribution Payment
Date, within 120 days after the occurrence of a Special Event at the Redemption
Price, upon not less than 30 nor more than 60 days' notice to holders of such
Debentures and so long as such Special Event is continuing. In each case, the
right of the Debenture Issuer to redeem the Debentures is subject to the
Debenture Issuer having received prior approval from the Federal Reserve (if the
Debenture Issuer is a bank holding company) or prior approval from the OTS (if
the Debenture Issuer is a savings and loan holding company), in each case if
then required under applicable capital guidelines or policies of the applicable
federal agency.

     "Capital Treatment Event" means the receipt by the Debenture Issuer and the
Trust of an opinion of counsel experienced in such matters to the effect that,
as a result of the occurrence of any amendment to, or change (including any
announced prospective change) in, the laws, rules or regulations of the United
States or any political subdivision thereof or therein, or as the result

                                      I-6

<PAGE>

of any official or administrative pronouncement or action or decision
interpreting or applying such laws, rules or regulations, which amendment or
change is effective or which pronouncement, action or decision is announced on
or after the date of original issuance of the Debentures, there is more than an
insubstantial risk that the Sponsor will not, within 90 days of the date of such
opinion, be entitled to treat an amount equal to the aggregate liquidation
amount of the Debentures as "Tier 1 Capital" (or its then equivalent) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Sponsor (or if the Sponsor is not a bank holding
company, such guidelines applied to the Sponsor as if the Sponsor were subject
to such guidelines); provided, however, that the inability of the Sponsor to
treat all or any portion of the liquidation amount of the Debentures as Tier 1
Capital shall not constitute the basis for a Capital Treatment Event, if such
inability results from the Sponsor having cumulative preferred stock, minority
interests in consolidated subsidiaries, or any other class of security or
interest which the Federal Reserve or OTS, as applicable, may now or hereafter
accord Tier 1 Capital treatment in excess of the amount which may now or
hereafter qualify for treatment as Tier 1 Capital under applicable capital
adequacy guidelines; provided further, however, that the distribution of
Debentures in connection with the Liquidation of the Trust shall not in and of
itself constitute a Capital Treatment Event unless such Liquidation shall have
occurred in connection with a Tax Event or an Investment Company Event.

     "Investment Company Event" means the receipt by the Debenture Issuer and
the Trust of an opinion of counsel experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or written
change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Trust is or will be considered an Investment Company that is required to be
registered under the Investment Company Act which change or prospective change
becomes effective or would become effective, as the case may be, on or after the
date of the issuance of the Debentures.

     "Maturity Date" means September 29, 2033.

     "Redemption Date" shall mean the Distribution Payment Date fixed for the
redemption of Capital Securities.

     "Redemption Price" means 100% of the principal amount of the Debentures
being redeemed, plus accrued and unpaid interest on such Debentures to the
Redemption Date.

     "Special Event" means a Tax Event, an Investment Company Event or a Capital
Treatment Event.

     "Tax Event" means the receipt by the Debenture Issuer and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of 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 as a result of any
official administrative pronouncement (including any private letter ruling,
technical advice memorandum, field service advice, regulatory procedure, notice
or announcement including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative

                                      I-7

<PAGE>

Action")) or judicial decision interpreting or applying such laws or
regulations, regardless of whether such Administrative Action or judicial
decision is issued to or in connection with a proceeding involving the Debenture
Issuer or the Trust and whether or not subject to review or appeal, which
amendment, clarification, change, Administrative Action or decision is enacted,
promulgated or announced, in each case on or after the date of original issuance
of the Debentures, 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 received or accrued on the
Debentures; (ii) interest payable by the Debenture Issuer on the Debentures is
not or within 90 days of the date of such opinion, will not be, deductible by
the Debenture Issuer, in whole or in part, for United States federal income tax
purposes; or (iii) the Trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges. Provided, however, if the Company may eliminate the
results described in (i) through (iii) of such Administrative Action or judicial
decision interpreting or applying such laws or regulations by taking some
ministerial action, such as filing a form or making an election, or pursuing
some other similar reasonable measure which has no adverse effect on the
Company, the Trustee, the Trust or the Holders of the Capital Securities issued
by the Trust, such Administrative Action or judicial decision shall not be
deemed a Tax Event.

          (b)  Upon the repayment in full at maturity or in whole or in part
upon redemption of the Debentures (other than following the distribution of the
Debentures to the Holders of the Securities), the proceeds from such repayment
or payment shall concurrently be applied to redeem Pro Rata at the applicable
Redemption Price, Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so repaid or redeemed, provided,
however, that holders of such Securities shall be given not less than 30 nor
more than 60 days' notice of such redemption (other than at the scheduled
maturity of the Debentures).

          (c)  If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Capital Securities will be redeemed Pro
Rata and the Capital Securities to be redeemed will be redeemed Pro Rata from
each Holder of Capital Securities.

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

          (e)  Redemption or Distribution Procedures.

               (i)   Notice of any redemption of or notice of distribution of
     the 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 paragraph 4(e)(i), a
     Redemption/Distribution Notice shall be deemed to be given on the day such
     notice is

                                      I-8

<PAGE>

     first mailed by first-class mail, postage prepaid, to Holders of such
     Securities. Each Redemption/Distribution Notice shall be addressed to the
     Holders of such Securities at the address of each such Holder appearing on
     the books and records of the Trust. No defect in the
     Redemption/Distribution Notice or in the mailing thereof with respect to
     any Holder shall affect the validity of the redemption or exchange
     proceedings with respect to any other Holder.

               (ii)  If the Securities are to be redeemed and the Trust gives a
     Redemption/Distribution Notice, which notice may only be issued if the
     Debentures are redeemed as set out in this paragraph 4 (which notice will
     be irrevocable), then, provided that the Institutional Trustee has a
     sufficient amount of cash in connection with the related redemption or
     maturity of the Debentures, the Institutional Trustee will, with respect to
     Book-Entry Capital Securities, on the Redemption Date, irrevocably deposit
     with the Depositary for such Book-Entry Capital Securities, to the extent
     available therefor, funds sufficient to pay the relevant Redemption Price
     and will give such Depositary irrevocable instructions and authority to pay
     the Redemption Price to the Owners of the Capital Securities. With respect
     to Capital Securities that are not Book-Entry Capital Securities, the
     Institutional Trustee will pay, to the extent available therefor, the
     relevant Redemption Price to the Holders of such Securities by check mailed
     to the address of each such 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 then immediately prior to
     the close of business on the date of such deposit 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 (or portion thereof) to receive the
     applicable Redemption Price specified in paragraph 4(a), but without
     interest on such Redemption Price. If any date fixed for redemption of
     Securities is not a Business Day, then payment of any such 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) with the same force and effect as if made on such date fixed
     for redemption. If payment of the Redemption Price in respect of any
     Securities is improperly withheld or refused and not paid either by the
     Trust or by the Debenture Issuer as guarantor pursuant to the Guarantee,
     Distributions on such Securities will continue to accrue at the
     Distribution Rate 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. In
     the event of any redemption of the Capital Securities issued by the Trust
     in part, the Trust shall not be required to (i) issue, register the
     transfer of or exchange any Security during a period beginning at the
     opening of business 15 days before any selection for redemption of the
     Capital Securities and ending at the close of business on the earliest date
     on which the relevant notice of redemption is deemed to have been given to
     all Holders of the Capital Securities to be so redeemed or (ii) register
     the transfer of or exchange of any Capital Securities so selected for
     redemption, in whole or in part except for the unredeemed portion of any
     Capital Securities being redeemed in part.

                                      I-9

<PAGE>

               (iii) Redemption/Distribution Notices shall be sent by the
     Administrators on behalf of the Trust (A) in respect of the Capital
     Securities, to the Holders thereof and (B) in respect of the Common
     Securities, to the Holder thereof.

               (iv)  Subject to the foregoing and applicable law (including,
     without limitation, United States federal securities laws), and provided
     that the acquiror is not the Holder of the Common Securities or the obligor
     under the Indenture, the Sponsor or any of its subsidiaries may at any time
     and from time to time purchase outstanding Capital Securities by tender, in
     the open market or by private agreement.

     5.   Voting Rights - Capital Securities.

          (a)  Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Capital Securities will
have no voting rights. The Administrators are required to call a meeting of the
Holders of the Capital Securities if directed to do so by Holders of at least
10% in liquidation amount of the Capital Securities.

          (b)  Subject to the requirements of obtaining a tax opinion by the
Institutional Trustee in certain circumstances set forth in the last sentence of
this paragraph, the Holders of a Majority in liquidation amount of the Capital
Securities, voting separately as a class, have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) exercise the remedies
available under the Indenture as the holder of the Debentures, (ii) waive any
past 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 on behalf of all the Holders of the Capital
Securities to any 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 simple majority in aggregate principal amount of
Debentures (a "Super Majority") affected thereby, 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 Capital
Securities outstanding which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. If the Institutional
Trustee fails to enforce its rights under the Debentures after the Holders of a
Majority in liquidation amount of such Capital Securities have so directed the
Institutional Trustee, to the fullest extent permitted by law, a Holder of the
Capital Securities may institute a legal proceeding directly against the
Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date the interest or principal is payable (or
in the case of redemption, the Redemption Date), then a Holder of record of the
Capital Securities may directly institute a proceeding for enforcement of
payment on or after the respective due dates specified in the Debentures, to
such Holder directly of the principal of or interest on the Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of

                                      I-10

<PAGE>

the Capital Securities of such Holder. The Institutional Trustee shall notify
all Holders of the Capital Securities of any default actually known to the
Institutional Trustee with respect to the Debentures unless (x) such default has
been cured prior to the giving of such notice or (y) the Institutional Trustee
determines in good faith that the withholding of such notice is in the interest
of the Holders of such Capital Securities, except where the default relates to
the payment of principal of or interest on any of the Debentures. Such notice
shall state that such Indenture Event of Default also constitutes an Event of
Default hereunder. Except with respect to directing the time, method and place
of conducting a proceeding for a remedy, the Institutional Trustee shall not
take any of the actions described in clauses (i), (ii) or (iii) above unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that,
as a result of such action, the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes.

     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 of the Indenture, the Institutional Trustee shall
request the direction of the Holders of the Securities with respect to such
amendment modification or termination and shall vote with respect to such
amendment, modification or termination as directed by 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 outstanding which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The Institutional
Trustee shall not take any such action in accordance with the directions of the
Holders of the Securities unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that, as a result of such action, the Trust
will not be classified as other than a grantor trust for United States federal
income tax purposes.

     A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Event of Default hereunder. Any required approval or direction of
Holders of the Capital Securities may be given at a separate meeting, of Holders
of the Capital Securities convened for such purpose, at a meeting of all of the
Holders of the Securities in the Trust or pursuant to written consent. The
Institutional Trustee will cause a notice of any meeting at which Holders of the
Capital Securities are entitled to vote, or of any matter upon which action by
written consent of such Holders is to be taken, to be mailed to each Holder of
record of the Capital Securities. Each such notice will include a statement
setting forth the following information (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents. No vote or consent of the Holders of
the Capital Securities will be required for the Trust to redeem and cancel
Capital Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.

     Notwithstanding that Holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not entitle the Holder thereof to vote or consent and

                                      I-11

<PAGE>

shall, for purposes of such vote or consent, be treated as if such Capital
Securities were not outstanding.

     In no event will Holders of the Capital Securities have the right to vote
to appoint, remove or replace the Administrators, which voting rights are vested
exclusively in the Sponsor as the Holder of all of the Common Securities of the
Trust. Under certain circumstances as more fully described in the Declaration,
Holders of Capital Securities have the right to vote to appoint, remove or
replace the Institutional Trustee.

     6.   Voting Rights - Common Securities.

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

          (b)  The Holders of the Common Securities are entitled, in accordance
with Article IV of the Declaration, to vote to appoint, remove or replace any
Administrators.

          (c)  Subject to Section 6.9 of the Declaration and only after each
Event of Default (if any) with respect to the Capital Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under the Indenture, or (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures shall
be due and payable; provided, however, that, where a consent or action under the
Indenture would require a Super Majority, the Institutional Trustee may only
give such consent or take such action at the written direction of the Holders of
at least the proportion in liquidation amount of the Common Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. Notwithstanding this paragraph 6(c), the Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
or consent of the Holders of the Capital 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 described in (i),
(ii) or (iii) above, unless the Institutional Trustee has obtained an opinion of
tax counsel to the effect that for the purposes of United States federal income
tax the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights under the
Declaration to the fullest extent permitted by law, any Holder of the 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.

                                      I-12

<PAGE>

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

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

     7.   Amendments to Declaration and Indenture.

          (a)  In addition to any requirements under Section 11.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Institutional Trustee, Sponsor or Administrators otherwise propose to effect,
(i) any action that would adversely affect the powers, preferences or special
rights of the Securities, whether by way of amendment to the Declaration or
otherwise, or (ii) the Liquidation of the Trust, other than as described in
Section 7.1 of the Declaration, then the Holders of outstanding Securities,
voting together as a single 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 the Holders of at least a Majority in liquidation amount of the
Securities, affected thereby; provided, however, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Capital
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 of 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
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.

          (c)  Notwithstanding the foregoing, no amendment or modification may
be made to the Declaration if such amendment or modification would (i) cause the
Trust to be classified for purposes of United States federal income taxation as
other than a grantor trust, (ii) reduce or otherwise adversely affect the powers
of the Institutional Trustee or (iii) cause the

                                      I-13

<PAGE>

Trust to be deemed an Investment Company which is required to be registered
under the Investment Company Act.

          (d)  Notwithstanding any provision of the Declaration, the right of
any Holder of the Capital Securities to receive payment of distributions and
other payments upon redemption or otherwise, on or after their respective due
dates, or to institute a suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder. For the protection and enforcement of the foregoing
provision, each and every Holder of the Capital Securities shall be entitled to
such relief as can be given either at law or equity.

     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 the 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 then outstanding unless, in relation to a payment, an
Event of Default has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Capital
Securities Pro Rata according to the aggregate liquidation amount of the Capital
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Capital Securities outstanding, and only after satisfaction of all
amounts owed to the Holders of the Capital Securities, to each Holder of the
Common Securities Pro Rata according to the aggregate liquidation amount of the
Common Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Common Securities outstanding.

     9.   Ranking. The Capital Securities rank pari passu with and payment
thereon shall be made Pro Rata with the Common Securities except that, where an
Event of Default has occurred and is continuing, the rights of Holders of the
Common Securities to receive payment of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of the
Holders of the Capital Securities with the result that no payment of any
Distribution on, or Redemption Price of, any Common Security, and no other
payment on account of redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all outstanding Capital Securities for all distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all outstanding
Capital Securities then called for redemption, shall have been made or provided
for, and all funds immediately available to the Institutional Trustee shall
first be applied to the payment in full in cash of all Distributions on, or the
Redemption Price of, the Capital Securities then due and payable.

     10.  Acceptance of Guarantee and Indenture. Each Holder of the Capital
Securities and the Common Securities, by the acceptance of such Securities,
agrees to the provisions of the Guarantee, including the subordination
provisions therein and to the provisions of the Indenture.

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

                                      I-14

<PAGE>

     12.  Miscellaneous. These terms constitute a part of the Declaration. The
Sponsor will provide a copy of the Declaration, the Guarantee, and the Indenture
to a Holder without charge on written request to the Sponsor at its principal
place of business.

                                      I-15

<PAGE>

                                   EXHIBIT A-1
                      FORM OF CAPITAL SECURITY CERTIFICATE

                           [FORM OF FACE OF SECURITY]

     [If the Capital Security is to be Global Capital Security- THIS CAPITAL
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
("DTC") OR A NOMINEE OF DTC. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION, AND NO TRANSFER OF
THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE
BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF
DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

     UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC TO OZARK CAPITAL STATUTORY TRUST II OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]

     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE SPONSOR OR THE TRUST, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN
ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED

                                     A-1-1

<PAGE>

INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE SPONSOR'S AND THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE
DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR OR THE
TRUST. HEDGING TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE SECURITIES ACT.

     THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH
A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN ASSETS" OF
ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF
THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE
SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY, USING THE ASSETS
OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH
PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA
OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR
ADMINISTRATIVE EXEMPTION.

     THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
LIQUIDATION AMOUNT OF NOT LESS THAN $500,000.00 (500 SECURITIES) AND MULTIPLES
OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF SECURITIES IN A BLOCK
HAVING A LIQUIDATION

                                     A-1-2

<PAGE>

AMOUNT OF LESS THAN $500,000.00 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL
EFFECT WHATSOEVER.

     THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

     IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY
THE DECLARATION TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.

          Certificate Number 1          Number of Capital Securities 14,000

                                 CUSIP No. 692618 AA 9

             Certificate Evidencing Floating Rate Capital Securities

                                       of

                        Ozark Capital Statutory Trust II

               (liquidation amount $1,000.00 per Capital Security)

     Ozark Capital Statutory Trust II, a statutory trust created under the laws
of the State of Connecticut (the "Trust"), hereby certifies that Cede & Co. (the
"Holder") is the registered owner of securities of the Trust representing
undivided beneficial interests in the assets of the Trust, (liquidation amount
$1,000.00 per capital security) (the "Capital Securities"). Subject to the
Declaration (as defined below), the Capital Securities are transferable on the
books and records of the Trust in person or by a duly authorized attorney, upon
surrender of this Certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities represented hereby are issued pursuant to,
and shall in all respects be subject to, the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of September 29, 2003, among
George G. Gleason, Mark D. Ross and Paul E. Moore, as Administrators, U.S. Bank
National Association, as Institutional Trustee, Bank of the Ozarks, Inc., as
Sponsor, and the holders from time to time of undivided beneficial interests in
the assets of the Trust, including the designation of the terms of the Capital
Securities as set forth in Annex I to such amended and restated declaration as
the same may be amended from time to time (the "Declaration"). Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Guarantee, and the Indenture to the Holder without charge upon written request
to the Trust at its principal place of business.

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

                                     A-1-3

<PAGE>

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

     This Capital Security is governed by, and construed in accordance with, the
laws of the State of Connecticut, without regard to principles of conflict of
laws.

     IN WITNESS WHEREOF, the Trust has duly executed this certificate.

                                        OZARK CAPITAL STATUTORY TRUST II

                                        By:
                                           -------------------------------------
                                            Name:
                                            Title: Administrator

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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

                                        U.S. Bank National Association,
                                        as the Institutional Trustee

                                        By:
                                           -------------------------------------
                                                     Authorized Officer

                                     A-1-4

<PAGE>

                          [FORM OF REVERSE OF SECURITY]

     Distributions payable on each Capital Security will be payable at an annual
rate equal to 4.04% beginning on (and including) the date of original issuance
and ending on (but excluding) December 31, 2003, and at an annual rate for each
successive period beginning on (and including) December 31, 2003, and each
succeeding Distribution Payment Date, and ending on (but excluding) the next
succeeding Distribution Payment Date (each a "Distribution Period"), equal to
3-Month LIBOR, determined as described below, plus 2.90% (the "Coupon Rate"),
applied to the stated liquidation amount of $1,000.00 per Capital Security, such
rate being the rate of interest payable on the Debentures to be held by the
Institutional Trustee.

     In the event that the 3-Month LIBOR is indeterminable by the methods
described below, the Coupon Rate shall equal the 3-Month LIBOR in effect on the
most recent Determination Date (whether or not 3-Month LIBOR for such period was
in fact determined on such Determination Date) plus 2.90%.

     Distributions in arrears for more than a quarterly period will bear
interest thereon compounded quarterly at the Distribution Rate (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
payments of Interest and any principal on the Debentures held by the
Institutional Trustee 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. In the event that any date on which a Distribution is
payable on this Capital Security is not a Business Day, then a payment of the
Distribution payable on such date will be made on the next succeeding day which
is a Business Day (and without any Distribution or other payment in respect of
any such delay), with the same force and effect as if made on the date the
payment was originally payable. The amount of interest payable for any
Distribution Period will be calculated by applying the Coupon Rate to the
principal amount outstanding at the commencement of the Distribution Period and
multiplying each such amount by the actual number of days in the Distribution
Period concerned divided by 360.

     "3-Month LIBOR" means the London interbank offered rate for three-month,
U.S. dollar deposits determined by the Debenture Trustee in the following order
of priority:

          (1)  the rate (expressed as a percentage per annum) for U.S. dollar
     deposits of an amount equal or comparable to the aggregate liquidation
     amount of the Debentures having a three-month maturity that appears on
     Telerate Page 3750 as of 11:00 a.m. (London time) on the particular
     Determination Date (as defined below). "Telerate Page 3750" means the
     display designated as "Page 3750" on the Dow Jones Telerate Service or such
     other page as may replace Page 3750 on that service or such other service
     or services as may be nominated by the British Bankers' Association as the
     information vendor for the purpose of displaying London interbank offered
     rates for U.S. dollars deposits;

                                     A-1-5

<PAGE>

          (2)  if such rate does not appear on Telerate Page 3750 as of 11:00
     a.m. (London time) on the Determination Date, 3-Month LIBOR will be the
     arithmetic mean of the rates (expressed as percentages per annum) for U.S.
     dollar deposits of an amount equal or comparable to the aggregate
     liquidation amount of the Debentures having a three-month maturity that
     appear on Reuters Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of
     11:00 a.m. (London time) on such Determination Date;

          (3)  if such rate does not appear on Reuters Page LIBO as of 11:00
     a.m. (London time) on the related Determination Date, the Debenture Trustee
     will request the principal London offices of four leading banks in the
     London interbank market to provide such banks' offered quotations
     (expressed as percentages per annum) to prime banks in the London interbank
     market for U.S. dollar deposits of an amount equal or comparable to the
     aggregate liquidation amount of the Debentures having a three-month
     maturity as of 11:00 a.m. (London time) on such Determination Date. If at
     least two quotations are provided, 3-Month LIBOR will be the arithmetic
     mean of such quotations; and

          (4)  if fewer than two such quotations are provided as requested in
     clause (3) above, the Debenture Trustee will request four major New York
     City banks to provide such banks' offered quotations (expressed as
     percentages per annum) to leading European banks for loans in U.S. dollars
     of an amount equal or comparable to the aggregate liquidation amount of the
     Debentures as of 11:00 a.m. (London time) on such Determination Date. If at
     least two such quotations are provided, 3-Month LIBOR will be the
     arithmetic mean of such quotations.

     If the rate for U.S. dollar deposits of an amount equal or comparable to
the aggregate liquidation amount of the Debentures having a three-month maturity
that initially appears on Telerate Page 3750 or Reuters Page LIBO, as the case
may be, as of 11:00 a.m. (London time) on the related Determination Date is
superseded on the Telerate page 3750 or Reuters Page LIBO, as the case may be,
by a corrected rate by 12:00 noon (London time) on such Determination Date, then
the corrected rate as so substituted on the applicable page will be the
applicable 3-Month LIBOR for such Determination Date.

          (5)  The Coupon Rate for any Distribution Period will at no time be
     higher than the maximum rate then permitted by New York law as the same may
     be modified by United States law.

     "Determination Date" means the date that is two London Banking Days (i.e.,
a day in which dealings in deposits in U.S. dollars are transacted in the London
interbank market) preceding the commencement of the relevant Distribution
Period.

     All percentages resulting from any calculations on the Capital Securities
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded upward
(e.g., 9.876545% or .09876545 being rounded to 9.87655% or .0987655), and all
dollar amounts used in or resulting from such calculation will be rounded to the
nearest cent (with one-half cent being rounded upward).

                                     A-1-6

<PAGE>

     Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on December 31, 2003. The Debenture Issuer
has the right under the Indenture to defer payments of interest on the
Debentures by extending the interest payment period for up to 20 consecutive
quarterly periods (each an "Extension Period") on the Debentures, subject to the
conditions described below, although such interest would continue to accrue on
the Debentures at an annual rate equal to the Distribution Rate compounded
quarterly to the extent permitted by law during any Extension Period. No
Extension Period may end on a date other than a Distribution Payment Date. At
the end of any such Extension Period the Debenture Issuer shall pay all interest
then accrued and unpaid on the Debentures (together with Additional Interest
thereon); provided, however, that no Extension Period may extend beyond the
Maturity Date. Prior to the termination of any Extension Period, the Debenture
Issuer may further extend such period, provided that such period together with
all such previous and further consecutive extensions thereof shall not exceed 20
consecutive quarterly periods, or extend beyond the Maturity Date. Upon the
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and Additional Interest, the Debenture Issuer may commence a new
Extension Period, subject to the foregoing requirements. No interest or
Additional Interest shall be due and payable during an Extension Period, except
at the end thereof, but each installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional
Interest. If Distributions are deferred, the Distributions due shall be paid on
the date that the related Extension Period terminates, to Holders of the
Securities as they appear on the books and records of the Trust on the record
date immediately preceding such date. Distributions on the Securities must be
paid on the dates payable (after giving effect to any Extension Period) to the
extent that the Trust has funds available for the payment of such distributions
in the Property Account of the Trust. The Trust's funds available for
Distribution to the Holders of the Securities will be limited to payments
received from the Debenture Issuer. The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

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

                                     A-1-7

<PAGE>

                                   ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital 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 Capital 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 Capital
     Security Certificate)

     Signature Guarantee:/1/

----------
/1/  Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Security registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Security
registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.

<PAGE>

                                   EXHIBIT A-2

                       FORM OF COMMON SECURITY CERTIFICATE

     THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.

     THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH SECTION 8.1
OF THE DECLARATION.

           Certificate Number 1             Number of Common Securities 433

                               September 29, 2003

             Certificate Evidencing Floating Rate Common Securities

                                       Of

                        Ozark Capital Statutory Trust II

     Ozark Capital Statutory Trust II, a statutory trust created under the laws
of the State of Connecticut (the "Trust"), hereby certifies that Bank of the
Ozarks, Inc. (the "Holder") is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
(the "Common Securities"). The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued pursuant to, and shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of September 29, 2003, among George G. Gleason, Mark D. Ross and Paul E.
Moore, as Administrators, U.S. Bank National Association, as Institutional
Trustee, Bank of the Ozarks, Inc. as Sponsor, and the holders from time to time
of undivided beneficial interest in the assets of the Trust including the
designation of the terms of the Common Securities as set forth in Annex I to
such amended and restated declaration, as the same may be amended from time to
time (the "Declaration"). Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee and the Indenture to the Holder
without charge upon written request to the Sponsor at its principal place of
business.

     As set forth in the Declaration, where an Event of Default has occurred and
is continuing, the rights of Holders of Common Securities to payment in respect
of Distributions and payments upon

     Liquidation, redemption or otherwise are subordinated to the rights of
payment of Holders of the Capital Securities.

                                     A-2-1

<PAGE>

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

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

     This Common Security is governed by, and construed in accordance with, the
laws of the State of Connecticut, without regard to principles of conflict of
laws.

                     Signatures appear on the following page

                                     A-2-2

<PAGE>

     IN WITNESS WHEREOF, the Trust has duly executed this certificate.

                                        OZARK CAPITAL STATUTORY TRUST II

                                        By:
                                           -------------------------------------
                                              Name:
                                              Title:  Administrator

                                     A-2-3

<PAGE>

                          [FORM OF REVERSE OF SECURITY]

     Distributions payable on each Common Security will be identical in amount
to the Distributions payable on each Capital Security, which is at an annual
rate equal to 4.04% beginning on (and including) the date of original issuance
and ending on (but excluding) December 31, 2003, and at an annual rate for each
successive period beginning on (and including) December 31, 2003, and each
succeeding Distribution Payment Date, and ending on (but excluding) the next
succeeding Distribution Payment Date (each a "Distribution Period"), equal to
3-Month LIBOR, determined as described below, plus 2.90% (the "Coupon Rate"),
applied to the stated liquidation amount of $1,000.00 per Common Security, such
rate being the rate of interest payable on the Debentures to be held by the
Institutional Trustee.

     In the event that the 3-Month LIBOR is indeterminable by the methods
described below, the Coupon Rate shall equal the 3-Month LIBOR in effect on the
most recent Determination Date (whether or not 3-Month LIBOR for such period was
in fact determined on such Determination Date) plus 2.90%.

     Distributions in arrears for more than one period will bear interest
thereon compounded at the Distribution Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes payments of
Interest and any principal on the Debentures held by the Institutional Trustee
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. In the
event that any date on which a Distribution is payable on this Common Security
is not a Business Day, then a payment of the Distribution payable on such date
will be made on the next succeeding day which is a Business Day (and without any
Distribution or other payment in respect of any such delay), with the same force
and effect as if made on the date the payment was originally payable. The amount
of interest payable for the Distribution Period commencing December 31, 2003 and
each succeeding Distribution Period will be calculated by applying the Coupon
Rate to the principal amount outstanding at the commencement of the Distribution
Period and multiplying each such amount by the actual number of days in the
Distribution Period concerned divided by 360.

     "3-Month LIBOR" means the London interbank offered rate for three-month,
U.S. dollar deposits determined by the Debenture Trustee in the following order
of priority:

          (1)  the rate (expressed as a percentage per annum) for U.S. dollar
     deposits of an amount equal or comparable to the aggregate liquidation
     amount of the Debentures having a three-month maturity that appears on
     Telerate Page 3750 as of 11:00 a.m. (London time) on the particular
     Determination Date (as defined below). "Telerate Page 3750" means the
     display designated as "Page 3750" on the Dow Jones Telerate Service or such
     other page as may replace Page 3750 on that service or such other service
     or services as may be nominated by the British Bankers' Association as the
     information vendor for the purpose of displaying London interbank offered
     rates for U.S. dollar deposits;

          (2)  if such rate does not appear on Telerate Page 3750 as of 11:00
     a.m. (London time) on the Determination Date, 3-Month LIBOR will be the
     arithmetic mean

                                     A-2-4

<PAGE>

     of the rates (expressed as percentages per annum) for U.S. dollar deposits
     of an amount equal or comparable to the aggregate liquidation amount of the
     Debentures having a three-month maturity that appear on Reuters Monitor
     Money Rates Page LIBO ("Reuters Page LIBO") as of 11:00 a.m. (London time)
     on such Determination Date;

          (3)  if such rate does not appear on Reuters Page LIBO as of 11:00
     a.m. (London time) on the related Determination Date, the Debenture Trustee
     will request the principal London offices of four leading banks in the
     London interbank market to provide such banks' offered quotations
     (expressed as percentages per annum) to prime banks in the London interbank
     market for U.S. dollar deposits of an amount equal or comparable to the
     aggregate liquidation amount of the Debentures having a three-month
     maturity as of 11:00 a.m. (London time) on such Determination Date. If at
     least two quotations are provided, 3-Month LIBOR will be the arithmetic
     mean of such quotations; and

          (4)  if fewer than two such quotations are provided as requested in
     clause (3) above, the Debenture Trustee will request four major New York
     City banks to provide such banks' offered quotations (expressed as
     percentages per annum) to leading European banks for loans in U.S. dollars
     of an amount equal or comparable to the aggregate liquidation amount of the
     Debentures as of 11:00 a.m. (London time) on such Determination Date. If at
     least two such quotations are provided, 3-Month LIBOR will be the
     arithmetic mean of such quotations.

     If the rate for U.S. dollar deposits of an amount equal or comparable to
the aggregate liquidation amount of the Debentures having a three-month maturity
that initially appears on Telerate Page 3750 or Reuters Page LIBO, as the case
may be, as of 11:00 a.m. (London time) on the related Determination Date is
superseded on the Telerate page 3750 or Reuters Page LIBO, as the case may be,
by a corrected rate by 12:00 noon (London time) on such Determination Date, then
the corrected rate as so substituted on the applicable page will be the
applicable 3-Month LIBOR for such Determination Date.

          (5)  The Coupon Rate for any Distribution Period will at no time be
     higher than the maximum rate then permitted by New York law as the same may
     be modified by United States law.

     "Determination Date" means the date that is two London Banking Days (i.e.,
a day in which dealings in deposits in U.S. dollars are transacted in the London
interbank market) preceding the commencement of the relevant Distribution
Period.

     All percentages resulting from any calculations on the Common Securities
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded upward
(e.g., 9.876545% or .09876545) being rounded to 9.87655% (or .0987655), and all
dollar amounts used in or resulting from such calculation will be rounded to the
nearest cent (with one-half cent being rounded upward).

                                     A-2-5

<PAGE>

     Except as otherwise described below, Distributions on the Common Securities
will be cumulative, will accrue from the date of original issuance and will be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing on December 31, 2003. The Debenture Issuer has the
right under the Indenture to defer payments of interest on the Debentures by
extending the interest payment period for up to 20 consecutive quarterly periods
(each an "Extension Period") on the Debentures, subject to the conditions
described below, although such interest would continue to accrue on the
Debentures at an annual rate equal to the Distribution Rate compounded quarterly
to the extent permitted by law during any Extension Period. No Extension Period
may end on a date other than an Interest Payment Date. At the end of any such
Extension Period the Sponsor shall pay all interest then accrued and unpaid on
the Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date. Prior to the
termination of any Extension Period, the Sponsor may further extend such period,
provided that such period together with all such previous and further
consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Sponsor may commence a new Extension Period, subject to
the foregoing requirements. No interest or Additional Interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest. If Distributions are
deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates, to Holders of the Securities as they appear on the
books and records of the Trust on the record date immediately preceding such
date. Distributions on the Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust's funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer. The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to the Guarantee.

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

                                     A-2-6

<PAGE>

                                   ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:

     _________________________________________________________________

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

     _________________________________________________________________

     _________________________________________________________________

     (Insert address and zip code of assignee) and irrevocably appoints

     _________________________________________________________________

          ________________________________________________ agent to transfer
          this Common Security Certificate on the books of the Trust. The agent
          may substitute another to act for him or her.

          Date:
               -----------------------------

          Signature:
                    ------------------------

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

          Signature:
                    ------------------------

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

Signature Guarantee/1/

----------
/1/  Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union, meeting the
requirements of the Security registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other signature guarantee program" as may be determined by the Security
registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.

                                       7

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