<PAGE>
PROSPECTUS
29,000,000 STRYPES-SM-
WBK STRYPES TRUST
(EXCHANGEABLE FOR ORDINARY SHARES OF WESTPAC BANKING CORPORATION, PAR VALUE
A$1.00 PER SHARE)
Each of the Structured Yield Product Exchangeable for Stock-SM- (the
"STRYPES") of WBK STRYPES Trust (the "Trust") offered hereby represents a
proportionate share of beneficial interest in the Trust, which entitles the
holder to receive an annual distribution of $3.135, and except as described
herein will be exchanged for between 89.68% and 100% of the Reference Property
(or, in certain circumstances, cash, or a combination of cash and Reference
Property, with an equal value) per STRYPES upon conclusion of the term of the
Trust on November 15, 2000 (the "Exchange Date"). The term "Reference Property"
means initially five Ordinary Shares, par value A$1.00 per share (the "Bank
Ordinary Shares"), of Westpac Banking Corporation (the "Bank") and shall be
subject to adjustment or replacement from time to time prior to the Business Day
(as defined herein) immediately preceding the Exchange Date to reflect the
application of the adjustment, replacement and distribution provisions described
herein. At the request of a STRYPES holder, except as described herein, Bank
Ordinary Shares constituting Reference Property which such holder may be
entitled to receive on the Exchange Date or otherwise will be delivered in the
form of American Depositary Shares ("Bank ADSs") representing such shares and
evidenced by American Depositary Receipts ("Bank ADRs"). The annual distribution
of $3.135 per STRYPES is payable quarterly on each February 15, May 15, August
15 and November 15, commencing November 15, 1997 (or, if any such date is not a
Business Day (as defined herein), the next succeeding Business Day). The STRYPES
are not subject to redemption.
The Trust is a recently created Delaware business trust established to
purchase and hold (i) a series of zero-coupon U.S. Government securities ("U.S.
Treasury Securities") maturing on a quarterly basis through the Exchange Date
and (ii) a forward purchase contract (the "Contract") relating to the Reference
Property with Australian Mutual Provident Society ARBN 008 387 371 ("AMP") and
an Australian trustee acting as trustee of an Australian trust (the "Contracting
Stockholder") pursuant to which the Contracting Stockholder initially will hold
Bank Ordinary Shares for the benefit of AMP. The Trust's investment objective is
to distribute to holders of STRYPES on a quarterly basis $.78375 per STRYPES
and, on the Exchange Date, to cause to be delivered to holders of STRYPES a
percentage of each type of Reference Property (or, under certain circumstances,
cash, or a combination of cash and Reference Property, with an equal value) per
STRYPES equal to the Exchange Amount. The Exchange Amount is equal to: (a) if
the Reference Property Value (as defined herein) is greater than or equal to the
Threshold Appreciation Price, 89.68% of the number or amount of each type of
Reference Property, (b) if the Reference Property Value is less than the
Threshold Appreciation Price but is greater than the Initial Price, a percentage
of the number or amount of each type of Reference Property, allocated as
proportionately as practicable, so that the aggregate value thereof equals the
Initial Price and (c) if the Reference Property Value is less than or equal to
the Initial Price, 100% of the number or amount of each type of Reference
Property. As described herein under "Investment Objective and Policies--The
Contract--General," the "Threshold Appreciation Price" initially will be $34.96
and the "Initial Price" initially will be $31.35 (the last reported per share
sale price of Bank Ordinary Shares on the Australian Stock Exchange Limited
("ASX") on September 30, 1997 multiplied by five, translated into U.S. dollars
at US$.7208=A$1.00, the mid-point of the bid and ask prices of exchanging U.S.
dollars for Australian dollars as reported on the Reuters page "WRLD" at the
time of pricing), provided that such amounts will be adjusted as described
herein upon any distribution to holders resulting from any Partial Cash
Distribution Event (as defined herein) of cash constituting Reference Property.
Each Bank ADS currently represents five Bank Ordinary Shares. On September 29,
1997, the last reported sale price per Bank ADS on the New York Stock Exchange
(the "NYSE") was $31.0625. Holders otherwise entitled to receive fractional
units or interests of Reference Property in respect of their aggregate holdings
of STRYPES will receive cash in lieu thereof.
SEE "RISK FACTORS," BEGINNING ON PAGE 31 OF THIS PROSPECTUS, FOR CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE STRYPES.
(CONTINUED ON FOLLOWING PAGE)
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PROCEEDS TO
PRICE TO PUBLIC SALES LOAD(1) TRUST(2)
<S> <C> <C> <C>
Per STRYPES.............................................. $31.35 $.941 $30.409
Total(3)................................................. $909,150,000 $27,289,000 $881,861,000
</TABLE>
(1) AMP has agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(2) Expenses of the Offering, which are payable by the Trust, are estimated to
be approximately $580,000.
(3) The Trust has granted the Underwriter an option, exercisable for 30 days
from the date hereof, to purchase up to an additional 3,839,997 STRYPES to
cover over-allotments, if any. If all such STRYPES are purchased, the total
Price to Public, Sales Load and Proceeds to Trust will be $1,029,533,906,
$30,902,437 and $998,631,469, respectively. See "Underwriting."
The STRYPES are offered by the Underwriter, subject to prior sale, when, as
and if issued to and accepted by it, and subject to approval of certain legal
matters by counsel for the Underwriter and certain other conditions. The
Underwriter reserves the right to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is expected that delivery of the STRYPES
will be made through the facilities of The Depository Trust Company on or about
October 6, 1997.
- ------------------------------
- -SM-Service mark of Merrill Lynch & Co., Inc.
------------------------------
MERRILL LYNCH & CO.
---------------
The date of this Prospectus is September 30, 1997.
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
Pursuant to the terms of the Contract, the Contracting Stockholder is
obligated to deliver to the Trust (for the benefit of the holders of the STRYPES
absolutely) on the Business Day immediately preceding the Exchange Date the
Reference Property required in order to exchange all of the STRYPES (including
any STRYPES issued pursuant to the over-allotment option granted by the Trust to
the Underwriter and the STRYPES issued in connection with the formation of the
Trust) on the Exchange Date in accordance with the Trust's investment objective.
The obligation of the Contracting Stockholder to deliver the Reference Property
under the Contract may be cash settled, at the option of AMP (the "Cash
Settlement Option"), in whole or in part, if AMP delivers to the Trust on the
Business Day immediately preceding the Exchange Date, in lieu of the portion of
the Reference Property otherwise deliverable by the Contracting Stockholder in
respect of which the Cash Settlement Option is exercised, U.S. dollars in an
amount equal to the U.S. Dollar Equivalent (as defined herein) of the value of
such Reference Property immediately prior to the Exchange Date. In the event
that AMP exercises the Cash Settlement Option, holders of the STRYPES will
receive cash, or a combination of cash and Reference Property, on the Exchange
Date.
AS DESCRIBED HEREIN, THE REFERENCE PROPERTY VALUE WILL REPRESENT A
DETERMINATION OF THE U.S. DOLLAR VALUE OF THE REFERENCE PROPERTY ON THE SECOND
BUSINESS DAY PRIOR TO ANY PARTIAL CASH DISTRIBUTION DATE (AS DEFINED HEREIN) AND
THE EXCHANGE DATE. FURTHERMORE, THE AMOUNT OF CASH PER STRYPES DISTRIBUTED AS A
RESULT OF ANY PARTIAL CASH DISTRIBUTION EVENT OR CASH DISSOLUTION EVENT (AS
DEFINED HEREIN) WILL BE THE CASH REORGANIZATION AMOUNT (AS DEFINED HEREIN)
ADJUSTED BY A PRESENT VALUE CALCULATION THAT DISCOUNTS SUCH CASH REORGANIZATION
AMOUNT TO THE DATE OF PAYMENT TO THE TRUST FROM THE EXCHANGE DATE AS DESCRIBED
HEREIN. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE AMOUNT RECEIVABLE BY THE
HOLDER OF A STRYPES ON THE EXCHANGE DATE OR AS A RESULT OF ANY DISSOLUTION EVENT
(AS DEFINED HEREIN) PLUS ANY CASH DISTRIBUTION TO THE HOLDER RESULTING FROM ANY
PARTIAL CASH DISTRIBUTION EVENT WILL BE EQUAL TO OR GREATER THAN THE ISSUE PRICE
OF THE STRYPES. IF THE REFERENCE PROPERTY VALUE ON THE EXCHANGE DATE IS LESS
THAN THE INITIAL PRICE (WHETHER OR NOT A PARTIAL CASH DISTRIBUTION EVENT
OCCURS), THE AMOUNT DISTRIBUTED TO THE HOLDER OF A STRYPES ON THE EXCHANGE DATE
MAY BE LESS THAN THE ISSUE PRICE OF THE STRYPES, IN WHICH CASE AN INVESTMENT IN
THE STRYPES WILL RESULT IN A LOSS. SEE "INVESTMENT OBJECTIVES AND
POLICIES--GENERAL" AND "--THE CONTRACT."
The Trust will be dissolved prior to the Exchange Date upon the occurrence
of (i) certain defaults of the Contracting Stockholder or AMP under the
Contract, (ii) the liquidation, dissolution, winding up or bankruptcy of an
issuer of a Reference Security, including the Bank as such, other than in
connection with a consolidation, merger or acquisition of such issuer with, into
or by another entity, or (iii) any consolidation, merger or acquisition of an
issuer of a Reference Security with, into or by another entity in connection
with which all the Reference Securities constituting the Reference Property
immediately prior to the consolidation, merger or acquisition are exchanged for
consideration consisting solely of cash and no other property (each, a
"Dissolution Event"). Upon the occurrence of a Dissolution Event, holders of the
STRYPES become absolutely entitled to the assets received pursuant to the
Contract, the Trust's other assets will be liquidated and the net assets of the
Trust will be distributed PRO RATA to such holders of the STRYPES as soon as
practicable.
Upon the occurrence of (a) an event described in clause (iii) of the
definition of Dissolution Event (a "Cash Dissolution Event") or (b) any
consolidation, merger or acquisition of an issuer of a Reference Security with,
into or by another entity in which some but less than all of the consideration
for the Reference Securities constituting the Reference Property immediately
prior to such consolidation, merger or acquisition is cash (a "Partial Cash
Distribution Event"), the Contracting Stockholder will pay to the Trust pursuant
to the Contract with respect to the cash paid to holders of such Reference
Securities in connection with such event (the amount of cash paid per unit of
such Reference Security is called the "Cash Reorganization Price") an amount of
cash equal to the product of (i) the number of STRYPES, (ii) the number of units
of such Reference Securities constituting Reference Property immediately prior
to such Cash Dissolution Event or Partial Cash Distribution Event, and (iii) the
Adjusted Present Value of the Cash Reorganization Amount. The term "Cash
Reorganization Amount" with respect to any Cash Reorganization Price means an
amount equal to (i) if the Reference Property Value is greater than or equal to
the Threshold Appreciation Price, 89.68% of the Cash Reorganization Price, (ii)
if the Reference Property Value is less than the Threshold Appreciation Price
but greater than the Initial Price, the product of the Initial Price and the
percentage of the Reference Property Value that represents the Cash
Reorganization Price, and (iii) if the Reference Property Value is less than or
equal to the Initial Price, the Cash Reorganization Price. The "Adjusted Present
Value" of any Cash Reorganization Amount is the U.S.
2
<PAGE>
Dollar Equivalent of the Cash Reorganization Amount, discounted on a semi-annual
basis (assuming a 360-day year of twelve 30-day months) at the Adjusted Treasury
Rate (as defined herein) from the Exchange Date to the date on which the Cash
Reorganization Price is paid to holders of the applicable Reference Securities
in connection with such Cash Dissolution Event or Partial Cash Distribution
Event.
The Trust will not dissolve upon the occurrence of a Partial Cash
Distribution Event. However, on the third Business Day following payment of any
Cash Reorganization Price to holders of a Reference Security in connection with
a Partial Cash Distribution Event (a "Partial Cash Distribution Date"), the
Contracting Stockholder will pay the Trust an amount equal to the product of (i)
the number of STRYPES, (ii) the number of units of such Reference Securities
constituting Reference Property immediately prior to such Partial Cash
Distribution Event and (iii) the Adjusted Present Value of the Cash
Reorganization Amount. The Bank of New York, as Paying Agent, will distribute
such amount PRO RATA to the holders of STRYPES as soon as practicable
thereafter. The Contracting Stockholder will pay any remaining Cash
Reorganization Price to AMP. Following such distributions, the Reference
Property will include, in lieu of the Reference Securities involved in such
Partial Cash Distribution Event, the securities or other non-cash property
retained by or distributed to holders of such Reference Securities as a result
of such Partial Cash Distribution Event, as well as any other cash, securities
and other property constituting Reference Property prior to such event. See
"Investment Objective and Policies--The Contract--Cash Distribution Events" and
"--Nominee Trust Agreement; Acceleration."
The Bank is not affiliated with the Trust, will not receive any of the
proceeds from the sale of the STRYPES and will have no obligations with respect
to the STRYPES.
The STRYPES have been approved for listing on the NYSE, subject to official
notice of issuance. Prior to the offering there has been no public market for
the STRYPES. Shares of closed-end investment companies have in the past
frequently traded at a discount from their net asset values and initial public
offering prices. The risks associated with this characteristic of closed-end
investment companies may be greater for investors expecting to sell shares of a
closed-end investment company soon after the completion of an initial public
offering.
The STRYPES are designed to provide investors with a current distribution
yield, while also providing the opportunity for investors to share in the
appreciation, if any, of the value of the Reference Property above the Threshold
Appreciation Price. However, the opportunity for equity appreciation afforded by
an investment in the STRYPES is less than that afforded by a direct investment
in the Reference Property. The value of the Reference Property receivable by a
holder of a STRYPES upon exchange on the Exchange Date (plus any cash received
in connection with the occurrence of a Partial Cash Distribution Event) will
exceed the issue price of such STRYPES only if the Reference Property Value
exceeds the Threshold Appreciation Price, which would represent an appreciation
of 11.5% over the Initial Price. In addition, assuming no Partial Cash
Distribution Event occurs, because each STRYPES will entitle the holder to
receive only 89.68% of the Reference Property if the Reference Property Value
exceeds the Threshold Appreciation Price on the Exchange Date, holders of the
STRYPES will be entitled to receive upon exchange on the Exchange Date only
89.68% of any appreciation of the value of the Reference Property above the
Threshold Appreciation Price. Holders of STRYPES will realize the entire decline
in value if the Reference Property Value is less than the Initial Price. There
can be no assurance that the distribution yield on the STRYPES will be higher
than the dividend yield on the Bank Ordinary Shares or other Reference
Securities over the term of the Trust. As described herein under "Investment
Objective and Policies--The Contract--General," the "Threshold Appreciation
Price" initially will be $34.96 and the "Initial Price" initially will be $31.35
(the last reported per share sale price of Bank Ordinary Shares on the
Australian Stock Exchange Limited ("ASX") on September 30, 1997 multiplied by
five, translated into U.S. dollars at US$.7208=A$1.00, the mid-point of the bid
and ask prices of exchanging U.S. dollars for Australian dollars as reported on
the Reuters page "WRLD" at the time of pricing), provided that such amounts will
be adjusted as described herein upon any distribution to holders resulting from
any Partial Cash Distribution Event of cash constituting Reference Property.
The STRYPES may not be a suitable investment for investors who are not able
to understand the unique nature of the Trust and the economic characteristics of
the Contract and the U.S. Treasury Securities held by the Trust.
The Trust has adopted a fundamental policy that the Contract may not be
disposed of during the term of the Trust and that, except under limited
circumstances, the U.S. Treasury Securities may not be disposed of prior
3
<PAGE>
to their respective maturities. As a result, the Trust will continue to hold the
Contract despite any significant decline in the value of the Reference Property
or adverse changes in the financial condition of the Bank. The Trust will not be
managed like a typical closed-end investment company. The Trust will be treated
as a grantor trust for United States Federal income tax purposes and each holder
of STRYPES will be treated as the owner of its PRO RATA portion of the Contract
and the U.S. Treasury Securities. The U.S. Treasury Securities held by the Trust
will be treated for United States Federal income tax purposes as having original
issue discount and holders of STRYPES will be required to recognize currently as
income their PRO RATA portion of such original issue discount as it accrues over
the term of the Trust. The quarterly cash distributions paid to the holders of
STRYPES, which distributions are anticipated to exceed the currently includable
original issue discount, will be treated as a tax-free return of the holders'
costs of the U.S. Treasury Securities and any previously included original issue
discount, and therefore will not be considered current income to holders upon
receipt thereof for United States Federal income tax purposes. Although under
current law holders of STRYPES should not recognize income, gain or loss with
respect to the Contract over its term, holders will recognize taxable gain or
loss upon receipt of cash, if any, upon dissolution of the Trust. The proper
United States Federal income tax treatment of the receipt by a holder of its PRO
RATA portion of cash distributed as a result of a Partial Cash Distribution
Event prior to dissolution of the Trust is uncertain and will depend upon
various factors. For a discussion of certain United States Federal and
Australian income tax considerations for holders of the STRYPES, see "Certain
Tax Considerations."
This Prospectus sets forth concisely information about the Trust that a
prospective investor ought to know before investing and should be read and
retained for future reference. Additional information about the Trust has been
filed with the Commission and is available upon written or oral request and
without charge. See "Additional Information."
------------------------
Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the STRYPES, the Bank
ADSs or the Bank Ordinary Shares. Such transactions may include stabilizing and
the imposition of penalty bids. For a description of these activities, see
"Underwriting."
The STRYPES may not be sold or offered for sale in the Commonwealth of
Australia, its Territories or its possessions ("Australia"), nor may an
invitation to make an offer to buy the STRYPES be made in Australia, except
under circumstances that result in the offer or invitation for sale or purchase
being an "excluded offer" or an "excluded invitation" for the purposes of the
Australian Corporations Law.
The Underwriter (i) has not offered or sold and will not offer or sell any
STRYPES to persons in the United Kingdom, except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which do not constitute an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities Regulations
1995; (ii) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation to
the STRYPES in, from or otherwise involving the United Kingdom; and (iii) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issuance of STRYPES to a
person who is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisement) (Exemptions) Order 1996 or is a person to whom
such document may otherwise lawfully be issued or passed on.
4
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY SHOULD BE READ IN CONJUNCTION WITH THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED,
THE INFORMATION CONTAINED IN THIS PROSPECTUS ASSUMES THAT THE UNDERWRITER'S
OVER-ALLOTMENT OPTION IS NOT EXERCISED. UNLESS OTHERWISE STATED OR THE CONTEXT
OTHERWISE REQUIRES, REFERENCES HEREIN TO $, US$ OR U.S. DOLLARS ARE TO UNITED
STATES DOLLARS AND REFERENCES HEREIN TO A$ ARE TO AUSTRALIAN DOLLARS.
THE TRUST
WBK STRYPES Trust (the "Trust") is a recently created Delaware business
trust that will be registered as a non-diversified closed-end management
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company Act"). The term of the Trust will expire on or shortly after
November 15, 2000 (the "Exchange Date"), except that the Trust may be dissolved
prior to such date under certain limited circumstances. The Trust will be
treated as a grantor trust for United States Federal income tax purposes.
THE OFFERING
The Trust is offering 29,000,000 STRYPES, each representing a proportionate
share of beneficial interest in the Trust, at an initial public offering price
of $31.35 per STRYPES (the last reported per share sale price of Bank Ordinary
Shares on the Australian Stock Exchange Limited ("ASX") on September 30, 1997
multiplied by five, translated into U.S. dollars at US$.7208 = A$1.00, the
mid-point of the bid and ask prices of exchanging U.S. dollars for Australian
dollars as reported on the Reuters page "WRLD" at the time of pricing this
offering (the "Offering")). The Underwriter has been granted an option,
exercisable for 30 days from the date of this Prospectus, to purchase up to an
aggregate of 3,839,997 additional STRYPES to cover over-allotments, if any. See
"Underwriting."
THE BANK
According to publicly available information, Westpac Banking Corporation
(the "Bank"), together with its subsidiaries ("Westpac"), is one of the four
major banking organizations in Australia. Westpac is engaged in a broad range of
banking and financial services, including general banking (retail, commercial
and institutional banking), finance company activities, investment management
and insurance. On September 26, 1997, the market capitalization of the Bank was
in excess of A$15 billion, which ranked it in the top ten Australian companies
listed on the ASX.
Westpac was the first bank established in Australia. It was founded in 1817
and was incorporated in 1850 as Bank of New South Wales by an Act of the New
South Wales Parliament. In 1982, the Bank acquired The Commercial Bank of
Australia Limited and changed its name to Westpac Banking Corporation. The
Bank's principal office is located at 60 Martin Place, Sydney, New South Wales,
2000, Australia and its telephone number is (61)(2)9266-3311.
The Bank ADSs are listed on the NYSE and, accordingly, the Bank is subject
to the informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), applicable to foreign private issuers. Any
information included herein regarding the Bank has been derived from information
filed by the Bank with the Securities and Exchange Commission and other publicly
available information. The Bank has not participated in the preparation of this
Prospectus and no due diligence inquiry of the Bank has been made by the Trust,
the Underwriter, the Contracting Stockholder, AMP or any other party in
connection with the Offering. There can be no assurance that all events
occurring prior to the date hereof (including events that would affect the
accuracy or completeness of such publicly available information about the Bank)
that would affect the trading price of the Bank ADSs or the Bank Ordinary Shares
have been publicly disclosed. Because the Reference Property is initially Bank
Ordinary Shares, such events, if any, would also affect the trading price of the
STRYPES.
5
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Trust will purchase and hold a series of zero-coupon U.S. Government
securities ("U.S. Treasury Securities") maturing on a quarterly basis through
the Exchange Date and a forward purchase contract (the "Contract") relating to
the Reference Property with Australian Mutual Provident Society, an Australian
mutual insurance company ("AMP"), and an Australian trustee as trustee of an
Australian trust (the "Contracting Stockholder") pursuant to which the
Contracting Stockholder initially will hold Bank Ordinary Shares for the benefit
of AMP. The Trust's investment objective is to distribute to holders of the
STRYPES ("holders") on a quarterly basis $.78375 per STRYPES (which amount
equals the PRO RATA portion of the fixed quarterly distributions from the
proceeds of the maturing U.S. Treasury Securities held by the Trust) and, on the
Exchange Date, to cause to be delivered to the holders of the STRYPES a
percentage of each type of Reference Property (or, under certain circumstances,
cash, or a combination of cash and Reference Property, with an equal value) per
STRYPES equal to the Exchange Amount. The Exchange Amount shall be equal to (a)
if the Reference Property Value (as defined herein) is greater than or equal to
the Threshold Appreciation Price, 89.68% of the number or amount of each type of
Reference Property, (b) if the Reference Property Value is less than the
Threshold Appreciation Price but is greater than the Initial Price, a percentage
of the number or amount of each type of Reference Property, allocated as
proportionately as practicable, so that the aggregate value thereof is equal to
the Initial Price, and (c) if the Reference Property Value is less than or equal
to the Initial Price, 100% of the number or amount of each type of Reference
Property. As described herein under "Investment Objective and Policies--The
Contract--General," the "Threshold Appreciation Price" initially will be $34.96
and the "Initial Price" initially will be $31.35 (the last reported per share
sale price of Bank Ordinary Shares on the ASX on September 30, 1997 multiplied
by five, translated into U.S. dollars at US$.7208 = A$1.00, the mid-point of the
bid and ask prices of exchanging U.S. dollars for Australian dollars as reported
on the Reuters page "WRLD" at the time of pricing), provided that such amounts
will be adjusted as described herein upon any distribution to holders resulting
from any Partial Cash Distribution Event (as defined herein) of cash
constituting Reference Property. The term "Reference Property" means initially
five Ordinary Shares, par value A$1.00 per share (the "Bank Ordinary Shares"),
of the Bank and shall be subject to adjustment or replacement from time to time
prior to the Business Day (as defined herein) immediately preceding the Exchange
Date to reflect the adjustment, replacement and distribution provisions
described herein. At the request of a STRYPES holder, Bank Ordinary Shares
constituting Reference Property which such holder may be entitled to receive on
the Exchange Date or otherwise will be delivered in the form of American
Depositary Shares ("Bank ADSs") representing such shares and evidenced by
American Depositary Receipts ("Bank ADRs"), but only if at the time of delivery
Bank ADSs are listed on the NYSE or another national or regional U.S. stock
exchange or quoted on a U.S. automated quotation system and if and to the extent
such Bank Ordinary Shares are accepted for deposit by the depositary for the
Bank ADSs. On the date hereof, Bank ADSs are listed on the NYSE and each such
Bank ADS represents five Bank Ordinary Shares. The continued listing of the Bank
ADSs on a national or regional U.S. stock exchange or the quotation of the Bank
ADSs on a U.S. automated quotation system are not matters under the control or
influence of the Trust, the Contracting Shareholder or AMP, and, therefore, no
assurance is hereby given that the Bank ADSs will continue to be listed on the
NYSE or, alternatively, listed on another national or regional U.S. stock
exchange or quoted on a U.S. automated quotation system in the future. Holders
otherwise entitled to receive fractional units of or interests in any Reference
Security (as defined herein) or other property constituting part of the
Reference Property in respect of their aggregate holdings of STRYPES will
receive cash in lieu thereof. See "Investment Objective and Policies--General"
and "--Fractional Interests."
The Contracting Stockholder, subject to receipt of the Escrow Amount (as
defined herein), is obligated to deliver to the Trust on behalf of the holders
of STRYPES on the Business Day immediately preceding the Exchange Date the
Reference Property required to exchange all of the STRYPES (including any
STRYPES issued pursuant to the over-allotment option granted by the Trust to the
Underwriter and STRYPES issued in connection with the formation of the Trust) on
the Exchange Date in accordance with
6
<PAGE>
the Trust's investment objective. The obligation of the Contracting Stockholder
to deliver the Reference Property under the Contract may be cash settled, at the
option of AMP (the "Cash Settlement Option"), in whole or in part, if AMP
delivers to the Trust on the Business Day immediately preceding the Exchange
Date, in lieu of the portion of the Reference Property otherwise deliverable by
the Contracting Stockholder in respect of which the Cash Settlement Option is
exercised, U.S. dollars in an amount equal to the U.S. Dollar Equivalent (as
defined herein) of the value of such Reference Property immediately prior to the
Exchange Date. In the event that AMP exercises the Cash Settlement Option or is
otherwise obligated to deliver cash under the terms of the Contract, holders of
the STRYPES will receive cash, or a combination of cash and Reference Property,
on the Exchange Date. See "Investment Objective and Policies--The Contract."
Holders of the STRYPES will receive distributions at the rate per STRYPES of
$3.135 per annum, or $.78375 per quarter, payable quarterly on each February 15,
May 15, August 15 and November 15 (or, if any such date is not a Business Day
(as defined herein), on the next succeeding Business Day), to holders of record
as of each February 1, May 1, August 1 and November 1, respectively. The first
distribution (in respect of the period from October 6, 1997 until November 14,
1997) will be payable on November 17, 1997 to holders of record as of November
1, 1997, and will equal $.33963 per STRYPES. See "Investment Objective and
Policies--Trust Assets."
On the Exchange Date, each outstanding STRYPES will be exchanged for between
89.68% and 100% of each type of Reference Property (or, in the event AMP
exercises the Cash Settlement Option, cash, or a combination of cash and
Reference Property, with an equal value), depending on the Reference Property
Value. AS DESCRIBED HEREIN, THE REFERENCE PROPERTY VALUE WILL REPRESENT A
DETERMINATION OF THE U.S. DOLLAR VALUE OF THE REFERENCE PROPERTY ON THE SECOND
BUSINESS DAY PRIOR TO ANY PARTIAL CASH DISTRIBUTION DATE (AS DEFINED HEREIN) AND
THE EXCHANGE DATE. FURTHERMORE, THE AMOUNT OF CASH PER STRYPES DISTRIBUTED AS A
RESULT OF ANY PARTIAL CASH DISTRIBUTION EVENT OR A CASH DISSOLUTION EVENT (AS
DEFINED HEREIN) WILL BE THE CASH REORGANIZATION AMOUNT (AS DEFINED HEREIN)
ADJUSTED BY A PRESENT VALUE CALCULATION THAT DISCOUNTS SUCH CASH REORGANIZATION
AMOUNT TO THE DATE OF PAYMENT TO THE TRUST FROM THE EXCHANGE DATE AS DESCRIBED
HEREIN. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE AMOUNT RECEIVABLE BY THE
HOLDER OF A STRYPES ON THE EXCHANGE DATE OR AS A RESULT OF ANY DISSOLUTION EVENT
PLUS ANY CASH DISTRIBUTION TO THE HOLDER RESULTING FROM ANY PARTIAL CASH
DISTRIBUTION EVENT WILL BE EQUAL TO OR GREATER THAN THE ISSUE PRICE OF THE
STRYPES. IF THE REFERENCE PROPERTY VALUE ON THE EXCHANGE DATE IS LESS THAN THE
INITIAL PRICE (WHETHER OR NOT A PARTIAL CASH DISTRIBUTION EVENT OCCURS), THE
AMOUNT DISTRIBUTED TO THE HOLDER OF A STRYPES ON THE EXCHANGE DATE MAY BE LESS
THAN THE ISSUE PRICE OF THE STRYPES, IN WHICH CASE AN INVESTMENT IN THE STRYPES
WILL RESULT IN A LOSS. SEE "INVESTMENT OBJECTIVES AND POLICIES--GENERAL" AND
"--THE CONTRACT."
The Trust will be dissolved prior to the Exchange Date upon the occurrence
of (i) certain defaults of the Contracting Stockholder or AMP under the
Contract, (ii)the liquidation, dissolution, winding up or bankruptcy of an
issuer of a Reference Security, including the Bank as such, other than in
connection with a consolidation, merger or acquisition of such issuer with, into
or by another entity, or (iii) any consolidation, merger or acquisition of an
issuer of a Reference Security with, into or by another entity in connection
with which all the Reference Securities constituting the Reference Property
immediately prior to the consolidation, merger or acquisition are exchanged for
consideration consisting solely of cash and no other property (each, a
"Dissolution Event"). Upon the occurrence of a Dissolution Event, the holders of
the STRYPES become absolutely entitled to the assets received pursuant to the
Contract, the Trust's other assets will be liquidated and the net assets of the
Trust will be distributed PRO RATA to the holders of the STRYPES as soon as
practicable thereafter.
Upon the occurrence of (a) an event described in clause (iii) of the
definition of Dissolution Event (a "Cash Dissolution Event") or (b) any
consolidation, merger or acquisition of an issuer of a Reference Security with,
into or by another entity in which some but less than all of the consideration
for the Reference Securities constituting the Reference Property immediately
prior to such consolidation, merger or acquisition is cash (a "Partial Cash
Distribution Event"), the Contracting Stockholder will pay to the Trust pursuant
to the Contract out of the cash paid to holders of such Reference Securities in
connection
7
<PAGE>
with such event (the amount of cash paid per unit of such Reference Security is
called the "Cash Reorganization Price") an amount of cash equal to the product
of (i) the number of STRYPES, (ii) the number of units of such Reference
Securities constituting Reference Property immediately prior to such Cash
Dissolution Event or Partial Cash Distribution Event and (iii) the Adjusted
Present Value of the Cash Reorganization Amount. The term "Cash Reorganization
Amount" with respect to any Cash Reorganization Price means an amount equal to
(i) if the Reference Property Value is greater than or equal to the Threshold
Appreciation Price, 89.68% of the Cash Reorganization Price, (ii) if the
Reference Property Value is less than the Threshold Appreciation Price but
greater than the Initial Price, the product of the Initial Price and the
percentage of the Reference Property Value that represents the Cash
Reorganization Price, and (iii) if the Reference Property Value is less than or
equal to the Initial Price, the Cash Reorganization Price. The "Adjusted Present
Value" of any Cash Reorganization Amount is the U.S. Dollar Equivalent (as
defined herein) of the Cash Reorganization Amount, discounted on a semi-annual
basis (assuming a 360-day year of twelve 30-day months) at the Adjusted Treasury
Rate (as defined herein) from the Exchange Date to the date on which the Cash
Reorganization Price is paid to holders of the applicable Reference Securities
in connection with the Cash Distribution Event or Partial Cash Distribution
Event.
The Trust will not dissolve upon the occurrence of a Partial Cash
Distribution Event. However, on the third Business Day following payment of any
Cash Reorganization Price to holders of a Reference Security in connection with
a Partial Cash Distribution Event (a "Partial Cash Distribution Date"), the
Contracting Stockholder will pay the Trust an amount equal to the product of (i)
the number of STRYPES, (ii) the number of units of such Reference Securities
constituting Reference Property immediately prior to such Partial Cash
Distribution Event and (iii) the Adjusted Present Value of the Cash
Reorganization Amount. The Bank of New York will distribute such amount PRO RATA
to the holders of STRYPES as soon as practicable thereafter. The Contracting
Stockholder will pay any remaining Cash Reorganization Price to AMP. Following
such distributions, the Reference Property will include, in lieu of the
Reference Securities involved in such Partial Cash Distribution Event, the
securities or other non-cash property retained by or distributed to holders of
such Reference Securities as a result of such Partial Cash Distribution Event,
as well as any other cash, securities and other property constituting Reference
Property prior to such event.
See "Investment Objective and Policies--The Contract--Cash Distribution
Events" and "--Nominee Trust Agreement; Acceleration."
TRUST ASSETS
The Trust's assets will consist of: (i) a series of zero-coupon U.S.
Treasury Securities with face amounts and maturities corresponding to the
amounts and payment dates of the distributions payable with respect to the
STRYPES, comprising approximately 29.2% of the initial assets of the Trust and
(ii) the Contract with the Contracting Stockholder relating to the Reference
Property, comprising approximately 70.8% of the initial assets of the Trust.
Pursuant to the terms of the Contract, upon receipt of the Escrow Amount (as
defined herein) from the Escrow Agent (as defined herein), the Contracting
Stockholder is obligated to deliver to the Trust for the benefit of the holders
of the STRYPES absolutely on the Business Day immediately preceding the Exchange
Date an aggregate number or amount of Reference Property equal to the product of
the Exchange Amount and the aggregate number of STRYPES then outstanding,
subject to AMP's Cash Settlement Option.
The purchase price under the Contract is equal to $623,779,528 (assuming the
Underwriter's over-allotment option is not exercised) and is payable to the
Contracting Stockholder by the Trust on or about October 6, 1997. Of such
amount, $1,000,000 (the "Escrow Amount") will be deposited with National
Australia Bank Limited as escrow agent (the "Escrow Agent") on or about October
6, 1997 and, in accordance with the Escrow Agreement among the Escrow Agent, the
Trust, the Contracting Stockholder and AMP (the "Escrow Agreement"), will be
held by the Escrow Agent in escrow and paid to the Contracting Stockholder on
the second Business Day prior to the Exchange Date upon notice from the
8
<PAGE>
Trust, or earlier upon the occurrence of a Dissolution Event. No other
consideration is payable by the Trust to the Contracting Stockholder in
connection with its acquisition of the Contract or the performance of the
Contract by the Contracting Stockholder. See "Investment Objective and
Policies--The Contract."
The Contracting Stockholder is National Australia Trustees Limited, ACN 007
350 405 ("National Australia Trustees"), in its capacity as trustee for a trust
arrangement (the "Australian Trust") established under the laws of Victoria,
Australia pursuant to a Nominee Trust Agreement, dated September 26, 1997,
between National Australia Trustees as trustee and AMP as beneficiary (as
amended and supplemented by the Contract, the "Nominee Trust Agreement"). The
assets of the Contracting Stockholder under the Contract initially will be the
maximum number of Bank Ordinary Shares or, upon the occurrence of a
Reorganization Event (as defined herein) other than a Dissolution Event (as
defined herein) or the substitution of assets by AMP as described herein, other
securities, cash or property deliverable by the Contracting Stockholder pursuant
to the Contract (the "Exchange Property"). So long as no Dissolution Event has
occurred, at the direction of AMP, the Contracting Stockholder may exchange the
foregoing assets for U.S. or Australian Government obligations as described
herein under "Investment Objective and Policies -- The Contract." Upon the
occurrence of a Dissolution Event, the Contracting Stockholder shall hold the
Exchange Property in trust absolutely for the Trust and AMP shall have only a
contingent interest in the Exchange Property not required to be delivered to
holders of STRYPES. Thereafter, the Contracting Stockholder shall act solely in
accordance with the directions of the Custodian and, pursuant to the Contract,
shall distribute to the Trust (for the benefit of the holders of STRYPES
absolutely) for distribution PRO RATA to holders of STRYPES, the cash,
securities and other property payable for the benefit of the holders of STRYPES
under the Contract. Upon the occurrence of a Partial Cash Distribution Event,
the Contracting Stockholder shall act only in accordance with the instructions
of the Custodian with respect to the portion of the aggregate Cash
Reorganization Price required to be distributed to the Trust in accordance with
the Contract, with any remaining Cash Reorganization Price thereafter being
distributed to AMP or at AMP's direction. See "Investment Objective and
Policies--The Contract--Nominee Trust Agreement; Acceleration."
RELATIONSHIP TO BANK ORDINARY SHARES
Holders of the STRYPES will receive distributions at the rate of US$3.135 or
10% of the issue price per annum. For the years ended September 30, 1991, 1992,
1993, 1994, 1995 and 1996, the total dividends per Bank ADS in U.S. dollar terms
was US$1.041, US$0.648, US$0.416, US$0.667, US$1.023 and US$1.290, respectively.
Any future determination as to the payment of dividends on the Bank Ordinary
Shares will be at the discretion of the Bank's Board of Directors and will
depend upon the Bank's operating results, financial condition and capital
requirements, contractual restrictions, general business conditions and such
other factors as the Bank's Board of Directors deems relevant. Also, dividends
on the Bank Ordinary Shares are payable in Australian dollars, while the
distributions on the STRYPES will be made in U.S. dollars. For a description of
certain dividends paid on Bank Ordinary Shares and certain information regarding
the exchange rate of U.S. dollars for Australian dollars, see "Investment
Objectives and Policies--The Bank." There can be no assurance that the
distribution yield on the STRYPES will be higher than the dividend yield on the
Bank Ordinary Shares over the term of the Trust. Holders of STRYPES will not be
entitled to receive any future dividends on the Bank Ordinary Shares unless and
until such time, if any, as the Trust shall have delivered Bank Ordinary Shares
or Bank ADSs in exchange for STRYPES on the Exchange Date or upon earlier
dissolution of the Trust, and unless the applicable record date for determining
stockholders entitled to receive such dividends occurs after such delivery. See
"Risk Factors--No Stockholder Rights."
The opportunity for equity appreciation afforded by an investment in the
STRYPES is less than that afforded by a direct investment in the Reference
Property because, whether or not a Partial Cash Distribution Event occurs, the
value of the Reference Property receivable by a holder of a STRYPES upon
exchange on the Exchange Date will not exceed the issue price of such STRYPES
unless the Reference
9
<PAGE>
Property Value exceeds the Threshold Appreciation Price, which represents an
appreciation of 11.5% over the Initial Price. Moreover, whether or not a Partial
Cash Distribution Event occurs, each STRYPES will entitle the holder to receive
on the Exchange Date only 89.68% (the percentage equal to the Initial Price
divided by the Threshold Appreciation Price) of any appreciation of the value of
the Reference Property Value above the Threshold Appreciation Price. Holders of
STRYPES will realize the entire decline in value if the Reference Property Value
is less than the Initial Price. As described herein under "Investment Objective
and Policies--The Contract--General," the "Threshold Appreciation Price"
initially will be $34.96 and the "Initial Price" initially will be $31.35 (the
last reported per share sale price of Bank Ordinary Shares on the ASX on
September 30, 1997 multiplied by five, translated into U.S. dollars at US$.7208
= A$1.00, the mid-point of the bid and ask prices of exchanging U.S. dollars for
Australian dollars as reported on the Reuters page "WRLD" at the time of
pricing), provided that such amounts will be adjusted as described herein upon
any distribution to holders on any Partial Cash Distribution Date of cash
constituting Reference Property. See "Risk Factors--Limitations on Opportunity
for Equity Appreciation; Potential Losses."
DILUTION
The percentage of each type of Reference Property (or the amount of cash or
combination of cash and Reference Property) that holders of STRYPES are entitled
to receive upon exchange on the Exchange Date will not be adjusted for certain
events, such as offerings of Bank Ordinary Shares by the Bank for cash (except
certain rights and warrants offerings) or in connection with acquisitions. The
Bank is not restricted in connection with the STRYPES from issuing additional
Bank Ordinary Shares during the term of the Trust. In addition, principal
stockholders of the Bank, including the Contracting Stockholder and AMP, are not
precluded from selling Bank Ordinary Shares or from participating in or voting
for a reorganization, merger or acquisition of the Bank. The Contracting
Stockholder is precluded from selling Bank Ordinary Shares held by it pursuant
to the Contract except for tendering the Bank Ordinary Shares or other Reference
Securities it holds in connection with any consolidation, merger or acquisition
of the Bank or successor issuer of Reference Securities as a whole if required
by applicable law or in connection with permitted substitution of Exchange
Property. Neither the Bank nor any stockholder of the Bank, including the
Contracting Stockholder and AMP, has any obligation to consider the interests of
holders of STRYPES for any reason. Additional issuances of Bank Ordinary Shares
or other Reference Securities may materially and adversely affect the price of
Bank Ordinary Shares or other Reference Securities and, because of the
relationship of the percentage of each type of Reference Property (or the amount
of cash or combination of cash and Reference Property) to be received on the
Exchange Date or the cash to be received resulting from any Partial Cash
Distribution Event to the price of such other Reference Property, such other
events may materially and adversely affect the trading price of the STRYPES.
There can be no assurance that the Bank or any successor will not take any of
the foregoing actions, or that it will not make offerings of, or that principal
stockholders will not sell any, Bank Ordinary Shares or other Reference
Securities in the future, or as to the amount of any such offerings or sales.
See "Risk Factors--Reference Property Adjustments."
TERM OF THE TRUST
The Trust will dissolve on or shortly after the Exchange Date unless
dissolved earlier upon the occurrence of a Dissolution Event. On or shortly
after the Exchange Date, the Reference Property or cash to be exchanged for the
STRYPES and any other remaining Trust assets, net of any remaining Trust
expenses, if any, will be distributed PRO RATA to holders. Upon the occurrence
of any Dissolution Event, the Contract will accelerate, the Escrow Amount will
be held for the benefit of and paid to the Contracting Stockholder, the holders
of the STRYPES will become absolutely entitled to the assets received pursuant
to the Contract, the Trust's other assets will be liquidated, the net assets of
the Trust will be distributed PRO RATA to the holders as soon as practicable
thereafter, and the Trust will dissolve. See "Investment Objective and
Policies--The Contract" and "--Trust Dissolution" and "Risk Factors--Limited
Term."
10
<PAGE>
CERTAIN TAX CONSIDERATIONS
The Trust will be taxable as a grantor trust for United States Federal
income tax purposes. Accordingly, each holder will be treated for United States
Federal income tax purposes as the owner of its PRO RATA portion of the U.S.
Treasury Securities and the Contract, and income received (including original
issue discount treated as received) by the Trust will generally be treated as
income of the holders. See "Certain Tax Considerations--United States Federal
Income Tax."
The U.S. Treasury Securities held by the Trust will be treated for United
States Federal income tax purposes as having "original issue discount" which
will accrue over the term of the U.S. Treasury Securities. It is currently
anticipated that each quarterly cash distribution to the holders will be treated
as a tax-free return of the holders' costs of the U.S. Treasury Securities and
any previously included original issue discount, and therefore will not be
considered current income to holders upon receipt thereof for United States
Federal income tax purposes. However, a holder (whether on the cash or accrual
method of tax accounting) must recognize currently as income original issue
discount on the U.S. Treasury Securities as it accrues. See "Certain Tax
Considerations--United States Federal Income Tax."
Under existing law, a holder should not recognize income, gain or loss upon
the Trust's entry into the Contract or over the term of the Contract. In
general, the delivery of Reference Property pursuant to the Contract will not be
taxable to the holders. A holder will recognize taxable gain or loss upon
receipt of cash, if any, upon dissolution of the Trust or to the extent AMP
exercises the Cash Settlement Option, and may do so in certain other
circumstances. In general, each holder's initial tax basis in any Reference
Property received from the Contracting Stockholder and the Trust on the Exchange
Date or upon earlier dissolution of the Trust will be equal to its basis in its
PRO RATA portion of the Contract less the portion of such basis allocable to any
cash that is received. The proper United States Federal income tax treatment of
the receipt by a holder of its PRO RATA portion of cash distributed as a result
of a Partial Cash Distribution Event prior to dissolution of the Trust is
uncertain and will depend upon various factors. See "Certain Tax
Considerations--United States Federal Income Tax."
For Australian income tax purposes the Trust will not be treated as a
resident of Australia. As it is not in receipt of Australian source income, the
Trust will not be subject to Australian tax on income earned. Quarterly
distributions of the Trust will not, therefore, be subject to Australian tax
whether by withholding or otherwise.
There will not be any Australian tax consequences to the Trust arising from
the delivery of Reference Property pursuant to the Contract and the distribution
of the Reference Property to the U.S. holders. The sale of STRYPES or shares in
an Australian listed company will not generate assessable income to U.S. holders
or otherwise be subject to Australian capital gains tax except in certain
circumstances described below and under "Certain Tax Considerations--Australian
Taxation." Capital gains tax upon the sale of STRYPES or shares in an Australian
listed company may apply where the U.S. holder and the U.S. holder's associates
together beneficially hold, prior to the sale, 10% or more of the issued capital
of the Australian listed company, such as the Bank, in which the shares are
held. See "Certain Tax Considerations--Australian Taxation."
In the event AMP exercises its Cash Settlement Option, any Australian
withholding tax payable thereon will be payable by AMP. It is not contemplated
that any withholding tax will be payable on such payment by AMP nor on any
payment of those funds by the Trust to U.S. holders.
Where U.S. holders acquire, on the Exchange Date, Reference Property
comprising shares in an Australian corporation, such as the Bank, there may be
Australian tax consequences in relation to dividends paid by that Australian
corporation. In general terms, fully franked dividends are not subject to
withholding tax while unfranked dividends paid to a U.S. holder will be subject
to 15% Australian dividend withholding tax. See "Certain Tax
Considerations--Australian Taxation."
11
<PAGE>
MANAGEMENT ARRANGEMENTS
The Trust will be internally managed and will not have an investment
adviser. The Trust's portfolio will not be actively managed. The administration
of the Trust will be overseen by the Trustees. The day-to-day administration of
the Trust will be carried out by The Bank of New York (or its successor) as
trust administrator (the "Administrator"). The Bank of New York (or its
successor) will also act as custodian for the Trust's assets (the "Custodian"),
as paying agent, transfer agent and registrar (the "Paying Agent") with respect
to the STRYPES, and as exchange agent (the "Exchange Agent") with respect to
exchanges of foreign currency amounts received under the Contract into U.S.
dollars, and calculation of any U.S. Dollar Equivalent. Except as aforesaid, The
Bank of New York has no other affiliation with, and is not engaged in any other
transaction with, the Trust. For their services, the Trust will pay The Bank of
New York in its capacities as the Administrator, the Custodian, the Paying Agent
and the Exchange Agent at the closing of the Offering a one-time, up-front
amount in respect of its fee. See "Management Arrangements."
RISK FACTORS
The Trust has adopted a fundamental policy that the Contract may not be
disposed of during the term of the Trust and that, unless the Trust dissolves
prior to the Exchange Date due to the occurrence of a Dissolution Event, the
U.S. Treasury Securities may not be disposed of prior to their respective
maturities. The Trust will continue to hold the Contract despite any significant
decline in the value of the Reference Property or adverse changes in the
financial condition of the Bank or other issuer of Reference Property.
Although the STRYPES will provide investors with a current distribution
yield, there is no assurance that the distribution yield on the STRYPES will be
higher than the yield on the Reference Property over the term of the Trust. In
addition, the opportunity for equity appreciation afforded by an investment in
the STRYPES is less than that afforded by a direct investment in the Bank
Ordinary Shares. The value of the Reference Property receivable by a holder of a
STRYPES upon exchange on the Exchange Date will exceed the issue price of such
STRYPES only if the Reference Property Value exceeds the Threshold Appreciation
Price, which, assuming a Partial Cash Distribution Event does not occur,
represents an appreciation of 11.5% over the Initial Price. Moreover, assuming a
Partial Cash Distribution Event does not occur, because each STRYPES will
entitle the holder to receive only 89.68% of each type of Reference Security if
the Reference Property Value exceeds the Threshold Appreciation Price, holders
of the STRYPES will be entitled to receive upon exchange only 89.68% of any
appreciation of the value of the Reference Property above the Threshold
Appreciation Price. As described herein, the Reference Property Value will
represent a determination of the value of the Reference Property immediately
prior to any Partial Cash Distribution Date and the Exchange Date. Furthermore,
the amount of cash per STRYPES distributed on any Partial Cash Distribution Date
or as a result of a Cash Dissolution Event will be the Cash Reorganization
Amount adjusted by a present value calculation that discounts such Cash
Reorganization Amount to the payment date from the Exchange Date as described
herein. Accordingly, there can be no assurance that the amount receivable by the
holder of a STRYPES on the Exchange Date or as a result of any Dissolution Event
plus any cash distribution to the holder resulting from any Partial Cash
Distribution Event will be equal to or greater than the issue price of the
STRYPES. If the Reference Property Value is less than the Initial Price on the
Exchange Date (whether or not a Partial Cash Distribution Event occurs), the
amount distributed to the holder of a STRYPES may be less than the issue price
paid for the STRYPES, in which case an investment in STRYPES will result in a
loss. See "Investment Objectives and Policies--General" and "--The Contract."
The Trust is classified as a "non-diversified" investment company under the
Investment Company Act. Consequently, the Trust is not limited by the Investment
Company Act in the proportion of its assets that may be invested in the
securities of a single issuer. Since the only securities held by the Trust will
be the U.S. Treasury Securities and the Contract, the Trust may be subject to
greater risk than would be the case for an investment company with more
diversified investments.
12
<PAGE>
The trading prices of the STRYPES in the secondary market will be directly
affected by the trading prices of Banks ADSs or Bank Ordinary Shares or other
Reference Property in the secondary market. It is impossible to predict whether
the price of Bank ADSs or Bank Ordinary Shares or other Reference Property will
rise or fall. Trading prices of Bank ADSs or Bank Ordinary Shares or other
Reference Property will be influenced by the Bank's or successor issuer's
operating results and prospects and by economic, financial and other factors and
market conditions.
Holders of STRYPES will not be entitled to any rights with respect to the
Bank Ordinary Shares or other Reference Securities (including, without
limitation, voting rights and rights to receive any dividends or other
distributions in respect thereof) unless and until such time, if any, as the
holders shall have received Bank Ordinary Shares or other Reference Securities
in exchange for STRYPES on the Exchange Date or upon the distribution of the
Bank Ordinary Shares or other Reference Securities following the occurrence of a
Dissolution Event.
The bankruptcy or winding up of, or similar events affecting, the
Contracting Stockholder or AMP could adversely affect the time of exchange or,
as a result, the amount received by the holders of the STRYPES. See "Risk
Factors--Risk Relating to Insolvency of Contracting Stockholder or AMP."
Holders will experience a taxable event upon receipt of cash, if any, upon
dissolution of the Trust. Because of an absence of authority as to the proper
character of any gain or loss resulting from such a taxable event, the ultimate
tax consequences to holders as a result of the Contracting Stockholder
satisfying its obligation under the Contract, in whole or in part, with cash is
uncertain. See "Risk Factors."
LISTING
The STRYPES have been approved for listing on the NYSE, subject to official
notice of issuance.
13
<PAGE>
FEE TABLE
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load (as a percentage of offering price).... 3%(a)
Automatic Dividend Reinvestment Plan Fees................. Not Applicable
ANNUAL EXPENSES (as a percentage of net assets)
Management Fees(b)........................................ 0%
Other Expenses(c)......................................... 0%
--
TOTAL ANNUAL EXPENSES(c).................................... 0%
--
--
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
----------- -----------
<S> <C> <C>
An investor would pay the following expenses on a $1,000
investment, including the maximum sales load of $30 and
assuming (1) no annual expenses and (2) a 5% annual return
throughout the periods: $ 30 $ 30
</TABLE>
- ------------------------
(a) See the cover page of this Prospectus and "Underwriting."
(b) See "Management Arrangements." The Trust will be internally managed;
consequently there is no separate investment advisory fee paid by the Trust.
The Bank of New York will act as the administrator of the Trust.
(c) The organization costs of the Trust in the amount of $10,000, the costs
associated with the initial registration and offering of the STRYPES
estimated to be approximately $580,000, and approximately $450,000 in
respect of anticipated ongoing expenses over the term of the Trust will be
paid by the Trust. Any unanticipated operating expenses of the Trust will be
paid by Merrill Lynch & Co., Inc., which will be reimbursed by AMP. See
"Management Arrangements--Estimated Expenses." Absent such arrangements, the
Trust's "Other Expenses" and "Total Annual Expenses" would be approximately
.017% of the Trust's net assets.
The foregoing Fee Table is intended to assist investors in understanding the
costs and expenses that a shareholder in the Trust will bear directly or
indirectly. The Example set forth above assumes reinvestment of all dividends
and distributions and utilizes a 5% annual rate of return as mandated by
Securities and Exchange Commission regulations. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE EXPENSES OR ANNUAL RATES OF RETURN, AND
ACTUAL EXPENSES OR ANNUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE ASSUMED
FOR PURPOSES OF THE EXAMPLE.
14
<PAGE>
THE TRUST
WBK STRYPES Trust is a Delaware business trust and will be registered as a
closed-end management investment company under the Investment Company Act. The
Trust was formed on March 14, 1996 pursuant to a Trust Agreement dated as of
such date (as amended and restated as of September 17, 1997 the "Declaration of
Trust"). The term of the Trust will expire on or shortly after November 15,
2000, except that the Trust may be dissolved prior to such date under certain
limited circumstances. The Trust will be treated as a grantor trust for United
States Federal income tax purposes. The Trust's principal office is located at
850 Library Avenue, Suite 204, Newark, Delaware 19715, and its telephone number
is (302) 738-6680.
USE OF PROCEEDS
The net proceeds of the Offering will be approximately $881,861,000 (or
approximately $998,631,469, if the Underwriter's over-allotment option is
exercised in full), after payment of the sales load, the expenses of the
Offering and the other expenses payable by the Trust as described herein. At the
time of the closing of the Offering, or shortly thereafter, the net proceeds of
the Offering will be used to purchase a fixed portfolio comprised of a series of
zero-coupon U.S. Treasury Securities with face amounts and maturities
corresponding to the amounts and payment dates of the distributions payable with
respect to the STRYPES, to pay the purchase price under the Contract to the
Contracting Stockholder and to pay the Escrow Amount under the Escrow Agreement
to the Escrow Agent.
INVESTMENT OBJECTIVE AND POLICIES
UNLESS THE CONTEXT OTHERWISE REQUIRES, THE FOLLOWING DISCUSSION ASSUMES THAT
ON THE EXCHANGE DATE, THE REFERENCE PROPERTY CONSISTS ONLY OF BANK ORDINARY
SHARES.
GENERAL
The Trust will purchase and hold (i) a series of zero-coupon U.S. Treasury
Securities maturing on a quarterly basis through the Exchange Date and (ii) the
Contract with the Contracting Stockholder and AMP relating to the Reference
Property. The Trust's investment objective is to distribute to holders of
STRYPES on a quarterly basis $.78375 per STRYPES (which amount equals the PRO
RATA portion of the fixed quarterly distributions from the proceeds of the
maturing U.S. Treasury Securities held by the Trust) and, on the Exchange Date,
a percentage of the number or amount of each type of Reference Security and
other property constituting part of the Reference Property (or, in certain
circumstances, cash, or a combination of cash, Reference Securities and other
property, with an equal value) per STRYPES equal to the Exchange Amount. The
Exchange Amount is equal to: (a) if the Reference Property Value is greater than
or equal to the Threshold Appreciation Price, 89.68% of the number or amount of
each type of Reference Property, (b) if the Reference Property Value is less
than the Threshold Appreciation Price but is greater than the Initial Price, a
percentage of the number or amount of each type of Reference Property, allocated
as proportionately as practicable, so that the aggregate value thereof is equal
to the Initial Price, and (c) if the Reference Property Value is less than or
equal to the Initial Price, 100% of the number or amount of each type of
Reference Property. The "Initial Price" initially will be $31.35, provided that,
following the distribution of cash constituting Reference Property as a result
of a Partial Cash Distribution Event, the Initial Price will be the product of
the Initial Price in effect immediately prior to such distribution and the
fraction obtained by dividing (i) the result of subtracting the aggregate Cash
Reorganization Price for the Reference Securities included in the Reference
Property that were disposed of in connection with such Partial Cash Distribution
Event from the Reference Property Value (computed as of the related Partial Cash
Distribution Date assuming such disposition had occurred) by (ii) the Reference
Property Value (computed as aforesaid), with such product being rounded to the
nearest cent. The "Threshold Appreciation Price" initially will be $34.96,
provided that, following the distribution of cash constituting Reference
Property as a result of a Partial Cash Distribution Event, the Threshold
15
<PAGE>
Appreciation Price will be the product of the Threshold Appreciation Price in
effect immediately prior to such distribution and the fraction obtained by
dividing (i) the result of subtracting the aggregate Cash Reorganization Price
for the Reference Securities included in the Reference Property that were
disposed of in connection with such Partial Cash Distribution Event from the
Reference Property Value (computed as of the related Partial Cash Payment Date
assuming such disposition had occurred) by (ii) the Reference Property Value
(computed as aforesaid), with such product being rounded to the nearest cent.
THERE CAN BE NO ASSURANCE THAT THE AMOUNT RECEIVABLE BY THE HOLDER OF A
STRYPES ON THE EXCHANGE DATE OR AS A RESULT OF ANY DISSOLUTION EVENT PLUS ANY
CASH DISTRIBUTION TO THE HOLDER RESULTING FROM ANY PARTIAL CASH DISTRIBUTION
EVENT WILL BE EQUAL TO OR GREATER THAN THE ISSUE PRICE OF THE STRYPES. IF THE
REFERENCE PROPERTY VALUE ON THE EXCHANGE DATE IS LESS THAN THE INITIAL PRICE
(WHETHER OR NOT A PARTIAL CASH DISTRIBUTION EVENT OCCURS), THE AMOUNT
DISTRIBUTED TO THE HOLDER OF A STRYPES MAY BE LESS THAN THE ISSUE PRICE OF THE
STRYPES, IN WHICH CASE AN INVESTMENT IN STRYPES WILL RESULT IN A LOSS. Holders
otherwise entitled to receive fractional units or interests of any Reference
Security or other property constituting part of the Reference Property in
respect of their aggregate holdings of STRYPES will receive cash in lieu
thereof. See "Fractional Interests."
The term "Reference Property" initially means five Bank Ordinary Shares and
shall be subject to adjustment from time to time prior to the Business Day
immediately preceding the Exchange Date to reflect the addition, substitution or
distribution of any cash, securities and/or other property resulting from the
application of the adjustment provisions described below under "--The
Contract--Reference Property Adjustments." As more fully described below, upon
application of such adjustment provisions, in the future the Reference Property
may include, in addition to or in lieu of Bank Ordinary Shares, other securities
of the Bank, securities of another issuer, cash or other property. The term
"Reference Security" means, at any time, any security (as defined in Section
2(1) of the Securities Act) then constituting part of the Reference Property.
The term "Reference Property Value" means, subject to the adjustment provisions
described below, the sum, determined as of 10:00 A.M. (New York City time) on
the second Business Day preceding the Exchange Date, any Partial Cash
Distribution Date or the date of any distribution following a Dissolution Event,
as the case may be (each such date being a "Reference Date"), of the U.S. Dollar
Equivalent of (a) for any portion of the Reference Property consisting of cash,
the amount of such cash, (b) for any portion of the Reference Property
consisting of property other than cash or Reference Securities, the fair market
value of such property (as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Administrator) as of
10:00 A.M. (New York City time) on the third Business Day preceding the
Reference Date, and (c) for any portion of the Reference Property consisting of
a Reference Security, an amount equal to the average Closing Price (as defined
herein) per unit of such Reference Security for the 20 Trading Days immediately
prior to, but not including, the second Trading Day preceding the Reference Date
multiplied by the number of units of such Reference Security constituting part
of the Reference Property. The term "U.S. Dollar Equivalent" with respect to the
value of any asset or liability means (i) if such asset or liability is
denominated or valued in U.S. dollars, such U.S. dollar amount; (ii) if such
asset or liability (other than cash) is denominated or valued in other than in
U.S. dollars, the product of the value of such asset or liability and (x) the
U.S. dollar noon buying rate in New York City for cable transfers (the "Noon
Buying Rate") of the currency in which the asset or liability is denominated or
valued as certified by the Federal Reserve Bank of New York on the date on or as
of which the value of the asset or liability is being determined or (y) if the
Noon Buying Rate for such currency is not available on such date, a rate of
exchange determined by the Exchange Agent and (iii) if such asset or liability
is cash, the U.S. dollar amount that the Exchange Agent would deliver in
exchange for such cash pursuant to the Administration Agreement (as defined
herein) assuming such exchange occurs on the payment or distribution date in
respect of which the value of such asset or liability is being determined and
the rate of exchange is comparable to that afforded to the Exchange Agent's best
customers for comparable volume.
At the request of a STRYPES holder, Bank Ordinary Shares constituting
Reference Property which such holder may be entitled to receive on the Exchange
Date or otherwise will be delivered in the form of
16
<PAGE>
Bank ADSs representing such shares and evidenced by Bank ADRs, but only if at
the time of delivery Bank ADSs are listed on the NYSE or another national or
regional U.S. stock exchange or quoted on a U.S. automated quotation system and
if and to the extent such Bank Ordinary Shares are accepted for deposit by the
depositary for the Bank ADSs. Any such request shall have been received by the
Administrator at least 30 days prior to the Exchange Date or other applicable
distribution date. Any such request may be revoked provided such revocation is
received by the Administrator at least 30 days prior to the Exchange Date or
other applicable distribution date. A Bank ADS request/revocation form is
attached hereto as Annex A. In the event that a holder elects to receive Bank
ADSs, on the Exchange Date or other distribution date, as the case may be, the
Trust will deposit the Bank Ordinary Shares with the Bank ADR depositary with
instructions to register ADRs in such holder's name and to deliver such ADRs as
requested by such holder and the Trust will be responsible for the payment of
any fees of the Bank ADR depositary in connection therewith. Any such payment
will be reimbursed by Merrill Lynch & Co., Inc., which in turn will be
reimbursed by AMP.
The "Closing Price" of (i) a Bank Ordinary Share constituting a Reference
Security on any date of determination means (a) (w) the closing sale price per
ADS (or, if no closing sale price per ADS is reported, the last reported per ADS
sale price) of Bank ADSs on the NYSE on such date or, if Bank ADSs are not
listed for trading on the NYSE on such date, as reported in the composite
transactions for the principal United States securities exchange on which Bank
ADSs are so listed, or, if Bank ADSs are not so listed, as reported by National
Association of Securities Dealers, Inc. Automated Quotation System, or if Bank
ADSs are not so reported, the last quoted per ADS bid price for Bank ADSs in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or (b) if Bank ADSs are not outstanding or traded, (y) the closing
price per share (or, if no closing price per share is reported, the last
reported per share sale price) of Bank Ordinary Shares on the ASX on such date
or, if Bank Ordinary Shares are not listed for trading on the ASX on such date,
the per share market value of Bank Ordinary Shares on such date as determined by
a nationally recognized independent investment banking firm in Australia
retained for this purpose by the Administrator, multiplied by (z) the U.S.
dollar noon buying rate in New York City for cable transfers of Australian
dollars as certified by the Federal Reserve Bank of New York on such date; and
(ii) a Reference Security other than a Bank Ordinary Share on any date of
determination means the closing sale price (or, if no closing price is reported,
the last reported sale price) of such security on the NYSE on such date or, if
such security is not listed for trading on the NYSE on such date, as reported in
the composite transactions for the principal United States securities exchange
on which such security is so listed, or, if such security is not so listed on a
United States exchange, as reported by National Association of Securities
Dealers, Inc. Automated Quotation System, or, if such security is not so
reported, the last quoted bid price for such security in the over-the-counter
market as reported by the National Quotation Bureau or similar organization, or,
if such bid price is not available, the U.S. Dollar Equivalent of the market
value of such security on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Administrator. A "Trading Day" is defined as a day on which the security the
Closing Price of which is being determined (A) is not suspended from trading on
any securities exchange or association or over-the-counter market at the close
of business and (B) has traded at least once on the securities exchange or
association or over-the-counter market that is the primary market for the
trading of such security or, in connection with calculating the Reference
Property Value for Bank Ordinary Shares using clause (i)(a) of the definition of
Closing Price, the primary trading market for the trading of Bank ADSs. The term
"Business Day" means any day that is not a Saturday, a Sunday or a day on which
the NYSE, The NASDAQ National Market, or banking institutions or trust companies
in The City of New York and any other place where payment under the Contract or
the Escrow Agreement is required to be made are authorized or obligated by law
or executive order to close.
Pursuant to the terms of the Contract, the Contracting Stockholder is
obligated to deliver to the Trust on the Business Day immediately preceding the
Exchange Date the aggregate number or amount of each type of Reference Security
and other property constituting part of the Reference Property required by the
Trust in order to exchange all of the STRYPES (including STRYPES issued pursuant
to the over-allotment
17
<PAGE>
option granted by the Trust to the Underwriter and STRYPES issued in connection
with the formation of the Trust) on the Exchange Date in accordance with the
Trust's investment objective. The obligation of the Contracting Stockholder to
deliver Reference Property under the Contract may be cash settled, at the option
of AMP (the "Cash Settlement Option"), in whole or in part, if AMP delivers to
the Trust on the Business Day immediately preceding the Exchange Date, in lieu
of the portion of the number or amount of each type of Reference Property
otherwise deliverable in respect of which the Cash Settlement Option is
exercised, cash in an amount equal to the value of such Reference Property
immediately prior to the Exchange Date. To the extent that AMP elects to satisfy
its obligation under the Contract by delivering cash or the Reference Property
includes cash, holders will receive cash on the Exchange Date. On or prior to
the twenty-sixth Business Day preceding the Exchange Date, the Administrator
will notify The Depository Trust Company (the "Depository") and publish a notice
in THE WALL STREET JOURNAL or another daily newspaper of national circulation
stating whether the applicable percentage of the number or amount of the
Reference Property or cash will be delivered in exchange for the STRYPES on the
Exchange Date. At the time such notice is published, the Reference Property
Value will not have been determined. If the Contracting Stockholder delivers
Reference Property, holders will be responsible for the payment of any and all
brokerage costs upon the subsequent sale thereof.
The Contract will comprise approximately 70.8% of the Trust's initial
assets. The Trust has adopted a fundamental policy that the Contract may not be
disposed of during the term of the Trust and that, unless the Trust dissolves
prior to the Exchange Date upon the occurrence of a Dissolution Event, the U.S.
Treasury Securities may not be disposed of prior to their respective maturities.
The foregoing fundamental policies of the Trust may not be changed without the
vote of 100% in interest of the holders of STRYPES. The Trust has also adopted a
policy to invest at least 65% of its portfolio initially in the Contract. While
the Trust would ordinarily expect to maintain its investment in the Contract at
or above 65% of its assets, its proportionate investment in the Contract could
fall below 65% of its assets as result of a Partial Cash Distribution Event or
fluctuations in the relative value of its investment in the Contract and its
investment in U.S. Treasury Securities.
TRUST ASSETS
The Trust's assets primarily will consist of (i) U.S. Treasury Securities
and (ii) the Contract. The Trust may also make certain temporary investments.
See "--Temporary Investments." For illustrative purposes only, the following
table shows the number of Bank Ordinary Shares or amount of cash (in U.S.
dollars) that a holder would receive for each STRYPES at various Reference
Property Values. The table assumes that there will be no Reference Property
adjustments as described below under "--The Contract-- Reference Property
Adjustments" and "--Cash Distribution Events" and, accordingly, that on the
Exchange Date, the Reference Property will consist of five Bank Ordinary Shares.
There can be no assurance that the Reference Property Value will be within the
range set forth below. Given an Initial Price of $31.35 and a Threshold
Appreciation Price of $34.96, a holder would receive on the Exchange Date the
following number of Bank Ordinary Shares or amount of cash (if the Contracting
Stockholder elects to satisfy its obligation under the Contract in whole with
cash) per STRYPES:
<TABLE>
<CAPTION>
NUMBER OF BANK ADS
NUMBER OF (ASSUMING 5 BANK
REFERENCE BANK ORDINARY ORDINARY SHARES PER AMOUNT
PROPERTY VALUE SHARES BANK ADS) OF CASH
- ----------------- ------------------ ------------------------ -------------
<S> <C> <C> <C>
$ 36.00 4.4840 0.8968 $ 32.28
34.96 4.4840 0.8968 31.35
33.00 4.7500 0.9500 31.35
31.35 5.0000 1.0000 31.35
30.00 5.0000 1.0000 30.00
</TABLE>
18
<PAGE>
The following table sets forth information regarding the distributions to be
received on the U.S. Treasury Securities, the portion of each year's
distributions that will constitute a return of capital for United States Federal
income tax purposes and the amount of original issue discount accruing, assuming
a yield-to-maturity accrual election, on the U.S. Treasury Securities with
respect to a holder who acquires its STRYPES at the issue price from the
Underwriter pursuant to the Offering. See "Certain Tax Considerations--United
States Federal Income Tax."
<TABLE>
<CAPTION>
ANNUAL GROSS ANNUAL INCLUSION
ANNUAL GROSS DISTRIBUTIONS FROM OF ORIGINAL
DISTRIBUTIONS FROM U.S. TREASURY ANNUAL RETURN ISSUE DISCOUNT
U.S. TREASURY SECURITIES PER OF CAPITAL PER IN INCOME PER
YEAR SECURITIES STRYPES STRYPES STRYPES
- ----------------- ------------------- ------------------- -------------- ----------------
<S> <C> <C> <C> <C>
1997............. $ 9,849,270 $ 0.33963 $ 0.3376 $ 0.0020
1998............. 90,915,000 3.13500 3.0105 0.1245
1999............. 90,915,000 3.13500 2.8393 0.2957
2000............. 90,915,000 3.13500 2.6761 0.4589
</TABLE>
The anticipated annual distribution of $3.135 per STRYPES is payable
quarterly on each February 15, May 15, August 15 and November 15, commencing
November 15, 1997 (or, if any such date is not a Business Day, the next
succeeding Business Day). Quarterly distributions on the STRYPES will consist
solely of the cash received from the proceeds of the maturing U.S. Treasury
Securities held by the Trust. The Trust will not be entitled to any future
dividends that may be declared on the Bank Ordinary Shares except Extraordinary
Cash Dividends (as defined herein). See "Dividends and Distributions."
ENHANCED YIELD; LESS POTENTIAL FOR EQUITY APPRECIATION THAN BANK ORDINARY
SHARES; NO DEPRECIATION PROTECTION
Although the STRYPES will provide investors with a current distribution
yield, there is no assurance that the distribution yield on the STRYPES will be
higher than the dividend yield on the Bank Ordinary Shares or other Reference
Securities over the term of the Trust. In addition, the opportunity for equity
appreciation afforded by an investment in the STRYPES is less than that afforded
by a direct investment in the Bank Ordinary Shares. The value of the Bank
Ordinary Shares receivable by a holder of a STRYPES on the Exchange Date (plus
any cash received in connection with any Partial Cash Distribution Event) will
exceed the issue price of such STRYPES only if the Reference Property Value
exceeds the Threshold Appreciation Price, which represents an appreciation of
11.5% of the Initial Price. Moreover, because each STRYPES will entitle the
holder to receive only 89.68% of the number or amount of each type of Reference
Security and other property constituting part of the Reference Property if the
Reference Property Value exceeds the Threshold Appreciation Price, holders of
the STRYPES will be entitled to receive upon exchange only 89.68% (the
percentage equal to the Initial Price divided by the Threshold Appreciation
Price) of any appreciation of the value of the Reference Property above the
Threshold
19
<PAGE>
Appreciation Price. Holders of STRYPES will bear the entire decline in value if
the Reference Property Value is less than the Initial Price.
THE BANK
Westpac Banking Corporation (the "Bank"), together with its subsidiaries
("Westpac"), is one of the four major banking organizations in Australia.
Westpac is engaged in a broad range of banking and financial services, including
general banking (retail, commercial and institutional banking), finance company
activities, investment management and insurance. On September 26, 1997, the
market capitalization of the Bank was in excess of A$15 billion, which ranked it
in the top ten Australian companies listed on the ASX.
Westpac was the first bank established in Australia. It was founded in 1817
and was incorporated in 1850 as Bank of New South Wales by an Act of the New
South Wales Parliament. In 1982, the Bank acquired The Commercial Bank of
Australia Limited and changed its name to Westpac Banking Corporation. The
Bank's principal office is located at 60 Martin Place, Sydney, New South Wales,
2000, Australia and its telephone number is (61)(2)9266-3311.
For each of the Bank's fiscal years indicated below, the high, low, average
and year-end Noon Buying Rates for Australian dollars were:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------
1997(1) 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
(US$PER A$1.00)
High.............................. 0.8120 0.8026 0.7778 0.7467 0.7224 0.8004
Low............................... 0.7163 0.7318 0.7100 0.6460 0.6450 0.7112
Average(2)........................ 0.7675 0.7718 0.7429 0.7109 0.6839 0.7528
Close............................. 0.7250 0.7912 0.7556 0.7400 0.6450 0.7139
</TABLE>
- ------------------------
(1) Through September 30, 1997.
(2) The average of the exchange rates on the last day of each month during the
period.
The principal exchange for the Bank Ordinary Shares is the ASX. Bank ADSs,
each representing five Bank Ordinary Shares, are listed on the NYSE. The Bank
Ordinary Shares are also listed on the Tokyo Stock Exchange and The Stock
Exchange, New Zealand.
20
<PAGE>
The table below shows, for the calendar periods indicated, the reported high
and low market quotations for the Bank Ordinary Shares on the ASX based on its
daily official list and for the Bank ADSs on the NYSE.
<TABLE>
<CAPTION>
PER BANK
ORDINARY SHARE PER BANK ADS
---------------- -----------------------
QUARTER ENDING HIGH LOW HIGH LOW
- -------------------------------------- ------- ------- ---------- ----------
<S> <C> <C> <C> <C>
1994:
March............................... A $5.55 A $4.45 US $20 1/8 US $15 1/4
June................................ 5.08 4.15 18 3/8 15 1/4
September........................... 4.86 4.12 17 7/8 15 1/4
December............................ 4.58 3.90 17 1/2 14 7/8
1995:
March............................... 5.07 4.30 21 3/8 16 3/8
June................................ 5.51 4.80 20 1/8 17 1/2
September........................... 5.50 4.82 20 5/8 17 7/8
December............................ 5.96 5.28 22 1/2 19 3/4
1996:
March............................... 6.49 5.53 24 3/8 21 1/2
June................................ 6.33 5.30 24 7/8 21 3/8
September........................... 6.59 5.20 26 20 1/2
December............................ 7.50 6.44 30 3/8 25 1/4
1997:
March............................... 7.90 6.93 30 1/8 27
June................................ 8.10 6.43 30 1/4 25 3/8
September........................... 9.04 7.66 32 15/16 28 1/16
</TABLE>
The table below sets forth the total dividends paid on each fully paid Bank
Ordinary Share in respect of each fiscal year of the Bank indicated. Amounts are
translated into U.S. dollars at the Noon Buying Rate on each of the respective
payment dates for interim and final dividends.
<TABLE>
<CAPTION>
TOTAL
TOTAL DIVIDENDS PER TOTAL DIVIDENDS PER DIVIDENDS PER
BANK ORDINARY SHARE BANK ORDINARY SHARE BANK ADS
-------------------- -------------------- --------------
<S> <C> <C> <C>
Fiscal Year Ended September 30
1991.............................. A$0.275 US$0.208 US$1.041
1992.............................. 0.180 0.130 0.648
1993.............................. 0.120 0.083 0.416
1994.............................. 0.180 0.135 0.677
1995.............................. 0.280 0.205 1.023
1996.............................. 0.330 0.258 1.290
</TABLE>
On July 4, 1997, the Bank paid an interim dividend of A$0.19 per Bank
Ordinary Share for the first six months of its fiscal year ended September 30,
1997.
Any future determination as to the payment of dividends on the Bank Ordinary
Shares will be at the discretion of the Bank's Board of Directors and will
depend upon the Bank's operating results, financial condition and capital
requirements, contractual restrictions, general business conditions and such
other factors as the Bank's Board of Directors deems relevant.
Morgan Guaranty Trust Company of New York acts as depositary for the Bank
ADSs.
21
<PAGE>
Holders of STRYPES will not be entitled to receive any future dividends on
the Reference Securities unless and until such time, if any, as the Contracting
Stockholder shall have delivered Reference Securities on the Business Day prior
to the Exchange Date or upon the occurrence of a Dissolution Event, and unless
the applicable record date for determining stockholders entitled to receive such
dividends occurs after such delivery. At any time that the Trust holds Reference
Securities as a result of the foregoing, such Reference Securities will be held
by the Trust for the benefit of the holders of STRYPES absolutely. See "Risk
Factors--No Stockholder Rights."
The Bank is subject to the information requirements of the Exchange Act
applicable to foreign private issuers. Accordingly, the Bank files reports and
other information with the Securities and Exchange Commission (the
"Commission"). Copies of such material can be inspected and copied at the public
reference facilities maintained by the Commission at the address specified under
"Additional Information." Reports and other information concerning the Bank may
also be inspected at the offices of the NYSE.
THE BANK IS NOT AFFILIATED WITH THE TRUST, THE UNDERWRITER, THE CONTRACTING
STOCKHOLDER OR AMP, WILL NOT RECEIVE ANY OF THE PROCEEDS FROM THE SALE OF THE
STRYPES AND WILL HAVE NO OBLIGATIONS WITH RESPECT TO THE STRYPES. THIS
PROSPECTUS RELATES ONLY TO THE STRYPES OFFERED HEREBY AND DOES NOT RELATE TO THE
BANK, BANK ADSs OR BANK ORDINARY SHARES.
THE CONTRACT
GENERAL. On the Business Day immediately preceding the Exchange Date,
pursuant to the terms of the Contract, the Contracting Stockholder is obligated
to deliver to the Trust an aggregate number or amount of each type of the
Reference Property equal to the product of the Exchange Amount and the aggregate
number of STRYPES then outstanding and, pursuant to the Escrow Agreement, the
Escrow Agent is obligated to deliver the Escrow Amount to the Contracting
Stockholder. The obligation of the Contracting Stockholder to deliver shares of
Reference Property under the Contract may be cash settled, at the option of AMP,
in whole or in part, if AMP delivers to the Trust on the Business Day
immediately preceding the Exchange Date, in lieu of the portion of the Reference
Property otherwise deliverable in respect of which the Cash Settlement Option is
exercised, U.S. dollars in an amount (calculated to the nearest 1/100th of a
dollar or, if there is not a nearest 1/100th of a dollar, then to the next
higher 1/100th of a dollar) equal to the Reference Property Value. In the event,
and to the extent, that AMP exercises the Cash Settlement Option or is otherwise
obligated to deliver cash under the terms of the Contact, holders of the STRYPES
will receive cash on the Exchange Date.
REFERENCE PROPERTY ADJUSTMENTS. The Reference Property is subject to
adjustment if an issuer of a Reference Security shall: (i) pay a stock dividend
or make a distribution with respect to such Reference Security in Reference
Securities; (ii) subdivide or split the outstanding units of such Reference
Security into a greater number of units; (iii) combine the outstanding units of
such Reference Security into a smaller number of units; (iv) issue by
reclassification of units of such Reference Security any units of another
security of such issuer; (v) issue rights or warrants to all holders of such
Reference Security entitling them to subscribe for or purchase any of its
securities or other property (other than rights to purchase units of such
Reference Security pursuant to a plan for the reinvestment of dividends or
interest); or (vi) pay a dividend or make a distribution to all holders of such
Reference Security of cash, securities or other property (excluding any cash
dividend on any Reference Security consisting of capital stock that does not
constitute an Extraordinary Cash Dividend (as defined below), excluding any
payment of interest on such Reference Security consisting of an evidence of
indebtedness and excluding any dividend or distribution referred to in clause
(i), (ii), (iii), (iv) or (v) above) or issue to all holders of such Reference
Security rights or warrants to subscribe for or purchase any of its securities
or other property (other than rights to purchase units of such Reference
Security pursuant to a plan for the reinvestment of dividends or interest and
rights and warrants referred to in clause (v) above) (any of the foregoing cash,
securities or
22
<PAGE>
other property or rights or warrants are referred to as the "Distributed
Assets") (any such event described in clause (i), (ii), (iii), (iv), (v) or
(vi), a "Dilution Event").
In the case of the Dilution Events referred to in clauses (i), (ii), (iii)
and (iv) above, the Reference Property shall be adjusted to include the number
of units of such Reference Security and/or security of such issuer which a
holder of units of such Reference Security would have owned or been entitled to
receive immediately following any such event had such holder held, immediately
prior to such event, the number of units of such Reference Security constituting
part of the Reference Property immediately prior to such event. Each such
adjustment shall become effective immediately after the effective date for such
subdivision, split, combination or reclassification, as the case may be. Each
such adjustment shall be made successively.
In the case of the Dilution Event referred to in clause (v) above, the
Reference Property shall be adjusted by multiplying the number of Reference
Securities constituting Reference Property immediately prior to the date of
issuance of the rights or warrants referred to in clause (v) above by a
fraction, the numerator of which shall be the number of Reference Securities
outstanding on the date of issuance of such rights or warrants, immediately
prior to such issuance, plus the number of additional Reference Securities
offered for subscription or purchase pursuant to such rights or warrants, and
the denominator of which shall be the number of Reference Securities outstanding
on the date of issuance of such rights or warrants, immediately prior to such
issuance, plus the number of additional Reference Securities which the aggregate
offering price of the total number of Reference Securities so offered for
subscription or purchase pursuant to such rights or warrants would purchase at
the current market price (determined as the average Closing Price per Reference
Security for the 20 Trading Days immediately prior to the date such rights or
warrants are issued, subject to certain adjustments), which shall be determined
by multiplying such total number of Reference Securities by the exercise price
of such rights or warrants and dividing the product so obtained by such current
market price. To the extent that Reference Securities are not delivered after
the expiration of such rights or warrants, or if such rights or warrants are not
issued, the Reference Property shall be readjusted to the Reference Property
which would then be in effect had such adjustments for the issuance of such
rights or warrants been made upon the basis of delivery of only the number of
Reference Securities actually delivered.
In the case of the Dilution Event referred to in clause (vi) above, the
Reference Property shall be adjusted to include, from and after such dividend,
distribution or issuance, (x) in respect of that portion, if any, of the
Distributed Assets consisting of cash, the amount of such Distributed Assets
consisting of cash received for each unit of such Reference Security multiplied
by the number of units of such Reference Security constituting part of the
Reference Property on the date of such dividend, distribution or issuance,
immediately prior to such dividend, distribution or issuance, without interest
thereon, plus (y) in respect of that portion, if any, of the Distributed Assets
which are other than cash, the number or amount of each type of Distributed
Assets other than cash received with respect to each unit of such Reference
Security multiplied by the number of units of such Reference Security
constituting part of the Reference Property on the date of such dividend,
distribution or issuance, immediately prior to such dividend, distribution or
issuance.
An "Extraordinary Cash Dividend" means, with respect to any consecutive
12-month period, the amount, if any, by which the aggregate amount of all cash
dividends or any other distribution made by the issuer of a Reference Security
or made pursuant to a scheme of arrangement effecting a distribution of
distributable profits or reserves (other than a bonus issue), whether in cash or
in specie, on any Reference Security consisting of capital stock occurring in
such 12-month period (or, if such Reference Security was not outstanding at the
commencement of such 12-month period or was not then a part of the Reference
Property, occurring in such shorter period during which such Reference Security
was outstanding and was part of the Reference Property) exceeds on a per share
basis 12% of the average of the Closing Prices per share of such Reference
Security over such 12-month period (or such shorter period during which such
Reference Security was outstanding and was part of the Reference Property);
provided that, for purposes
23
<PAGE>
of the foregoing definition, the amount of cash dividends paid on a per share
basis will be appropriately adjusted to reflect the occurrence during such
period of any stock dividend or distribution of shares of capital stock of the
issuer of such Reference Security or any subdivision, split, combination or
reclassification of shares of such Reference Security.
In the event of (A) any consolidation or merger of an issuer of a Reference
Security with or into another entity (other than a consolidation or merger in
which such issuer is the continuing corporation and in which the Reference
Security outstanding immediately prior to the consolidation or merger is not
exchanged for cash, securities or other property of such issuer or another
entity) or acquisition of an issuer of a Reference Security by another entity,
(B) any sale, transfer, lease or conveyance to another corporation of the
property of an issuer of a Reference Security as an entirety or substantially as
an entirety, (C) any statutory exchange of securities of an issuer of a
Reference Security with another entity, (D) any scheme of arrangement or (E) any
liquidation, dissolution, winding up or bankruptcy of an issuer of a Reference
Security including the Bank as such (excluding any distribution in such Dilution
Event referred to in clause (vi) above) (any such event described in clause (A),
(B), (C), (D) or (E), a "Reorganization Event"), the Reference Property shall be
adjusted to include, from and after the effective date for such Reorganization
Event, in lieu of the number of units of such Reference Security constituting
part of the Reference Property immediately prior to the effective date for such
Reorganization Event, the amount or number of any cash, securities and/or other
property owned or received in such Reorganization Event with respect to each
unit of such Reference Security multiplied by the number of units of such
Reference Security constituting part of the Reference Property immediately prior
to the effective date for such Reorganization Event.
The Administrator is required, within ten Business Days following the
occurrence of an event that requires an adjustment to the Reference Property (or
if the Administrator is not aware of such occurrence, as soon as practicable
after becoming so aware), to provide written notice to the holders of the
STRYPES of the occurrence of such event and a statement in reasonable detail
setting forth the amount or number of each type of Reference Security and other
property then constituting part of the Reference Property.
No adjustments to the Reference Property will be made for certain other
events, such as offerings of Bank Ordinary Shares by the Bank for cash (except
as described above) or in connection with acquisitions. Likewise, no adjustments
to the Reference Property will be made for any sales of Bank Ordinary Shares by
AMP or the Contracting Stockholder.
CASH DISTRIBUTION EVENTS. Upon the occurrence of (a) an event described in
clause (iii) of the definition of Dissolution Event (a "Cash Dissolution Event")
or (b) any consolidation, merger or acquisition of an issuer of a Reference
Security with, into or by another entity in which some but less than all of the
consideration for the Reference Securities constituting the Reference Property
immediately prior to such consolidation, merger or acquisition is cash (a
"Partial Cash Distribution Event"), the Contracting Stockholder will pay to the
Trust pursuant to the Contract out of the cash paid to holders of such Reference
Securities in connection with such event an amount of cash equal to the product
of (i) the number of STRYPES, (ii) the number of units of such Reference
Securities constituting Reference Property immediately prior to such Cash
Dissolution Event or Partial Cash Dissolution Event and (iii) the Adjusted
Present Value of the Cash Reorganization Amount. The term "Cash Reorganization
Amount" with respect to any Cash Reorganization Price means an amount equal to
(i) if the Reference Property Value is greater than or equal to the Threshold
Appreciation Price, 89.68% of the Cash Reorganization Price, (ii) if the
Reference Property Value is less than the Threshold Appreciation Price but
greater than the Initial Price, the product of the Initial Price and the
percentage of the Reference Property Value that represents the Cash
Reorganization Price, and (iii) if the Reference Property Value is less than or
equal to the Initial Price, the Cash Reorganization Price. The "Adjusted Present
Value" of any Cash Reorganization Amount is the U.S. Dollar Equivalent of the
Cash Reorganization Amount, discounted on a semi-annual basis (assuming a
360-day year of twelve 30-day months) at the Adjusted Treasury Rate from the
Exchange Date to the date on which the Cash Reorganization Price is paid to
holders of the applicable Reference Securities in connection with the Cash
Distribution Event or Partial Cash Distribution Event.
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The Trust will not dissolve upon the occurrence of a Partial Cash
Distribution Event. However, on the third Business Day following payment of any
Cash Reorganization Price to holders of a Reference Security in connection with
a Partial Cash Distribution Event (a "Partial Cash Distribution Date"), the
Contracting Stockholder will pay the Trust an amount equal to the product of (i)
the number of STRYPES, (ii) the number of units of such Reference Security
constituting Reference Property immediately prior to such Partial Cash
Distribution Event and (iii) the Adjusted Present Value of the Cash
Reorganization Amount. The Bank of New York, as Paying Agent, will distribute
such amount PRO RATA to the holders of STRYPES as soon as practicable
thereafter. The Contracting Stockholder will pay any remaining Cash
Reorganization Price to AMP. Following such distributions, the Reference
Property will include, in lieu of the Reference Securities involved in such
Partial Cash Distribution Event, only the securities or other non-cash property
retained by or distributed to holders of such Reference Securities as a result
of such Partial Cash Distribution Event, as well as any other cash securities
and other property constituting Reference Property prior to such event.
"Adjusted Treasury Rate" means, with respect to any Cash Dissolution Event
or Partial Cash Distribution Event, the rate per annum equal to (i) the yield,
under the heading which represents the average for the immediately prior week,
appearing in the most recently published statistical release designated "H.15
(519)" or any successor publication which is published weekly by the Federal
Reserve Board and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Remaining Life (as
defined herein) (if no maturity is within three months before or after the
maturity corresponding to the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life will be
interpolated, and the Adjusted Treasury Rate will be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for the date on which such event is consummated, in
each case calculated on the third Business Day preceding the date on which such
event is consummated.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the Remaining Life. If no United States Treasury
security has a maturity which is within a period from three months before to
three months after the occurrence of the Cash Dissolution Event or Partial Cash
Distribution Event, as the case may be, the two most closely corresponding
United States Treasury securities will be used as the Comparable Treasury Issue,
and the Adjusted Treasury Rate will be interpolated or extrapolated on a
straight-line basis, rounding to the nearest month, using such securities.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Administrator. "Reference Treasury Dealer" means a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer").
"Comparable Treasury Price" means, with respect to any Cash Dissolution
Event or Partial Cash Distribution Event, (i) the average of five Reference
Treasury Dealer Quotations for the date on which such event is consummated,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (ii) if the Paying Agent obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any prepayment date, the average, as determined by the
Administrator, of the bid and asked prices for the
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Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Administrator by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding the date on which the Cash Dissolution Event or Partial Cash
Distribution Event is consummated.
"Remaining Life" means, with respect to any Cash Dissolution Event or
Partial Cash Distribution Event, the period from the third Business Day
following the date of payment of the Cash Reorganization Price to the holders of
the applicable Reference Securities to and including the Exchange Date.
NOMINEE TRUST AGREEMENT; ACCELERATION. The Contracting Stockholder's assets
initially will be the maximum number of Bank Ordinary Shares deliverable under
the Contract. The Contracting Stockholder's activities are limited to holding
and administering these assets pursuant to the Nominee Trust Agreement and the
Contract. Pursuant to the Contract, the Contracting Stockholder must have the
legal ownership of the maximum number or amount of each type of Reference
Security and other property constituting part of the Reference Property
deliverable by the Contracting Stockholder under the Contract. The Contracting
Stockholder will at the direction of AMP pay over to AMP as beneficiary any
dividends, interest, principal or other payments received by the Contracting
Stockholder in respect of any Reference Property and any Cash Reorganization
Price not payable and paid to the Trust on any Partial Cash Distribution Date,
unless (a) a Dissolution Event has occurred, (b) such dividends, interest,
principal or other payments constitute part of the Reference Property or (c) the
payment of such amount to AMP would cause the assets of the Contracting
Stockholder to become insufficient under the Contract. AMP shall have the right
to direct the Contracting Stockholder to vote any Reference Securities for so
long as such securities are owned by the Contracting Stockholder and
beneficially owned by AMP, unless a Dissolution Event has occurred. Upon the
occurrence of a Dissolution Event, the Contracting Stockholder shall hold the
Exchange Property absolutely for the Trust, and AMP shall have a contingent
interest in the Exchange Property not required to be delivered to the Trust for
delivery to holders of STRYPES. Thereafter, the Contracting Stockholder shall
act solely in accordance with the instructions of the Custodian.
Unless the Contracting Stockholder or AMP is in default in its obligations
under the Nominee Trust Agreement and the Contract, AMP will be permitted to
substitute for the Reference Property held by the Contracting Stockholder assets
consisting of short-term, direct obligations of the U.S. Government or the
Australian Government (collectively, "Government Obligations"). Any Government
Obligations held by the Contracting Stockholder as substitute assets will be
required to have an aggregate market value (expressed in U.S. dollars) at the
time of substitution and at daily mark-to-market valuations thereafter of not
less than 150% (or, from and after any Insufficiency Determination that shall
not be cured by 4:00 P.M. (New York City time) on the third Business Day
following the day on which notice thereof is given, as described below, 200%) of
the aggregate value of the number or amount of each type of Reference Security
and other property constituting part of the Reference Property for which such
obligations are being substituted at the time of each valuation.
If the Administrator shall make a determination that Government Obligations
held by the Contracting Stockholder pursuant to the Nominee Trust Agreement as
substitute assets shall fail to meet the foregoing requirements at any valuation
(an "Insufficiency Determination"), and such failure shall not be cured by 4:00
P.M. (New York City time) on the third Business Day following the day on which
notice of such determination is given, then, unless a Exchange Property Event of
Default (as defined below) under the Contract shall have occurred and be
continuing, the Contracting Stockholder shall, if practicable, commence (i)
sales of the assets of the Contracting Stockholder consisting of Government
Obligations and (ii) purchases, using the proceeds of such sales, of each type
of Reference Security and other property then constituting part of the Reference
Property, in such numbers or amounts sufficient to cause the assets of the
Contracting Stockholder to meet the requirements of the Nominee Trust Agreement
and the Contract. The Contracting Stockholder shall discontinue such sales and
purchases if at any time an Exchange Property Event of Default under the
Contract shall have occurred and be continuing.
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An "Exchange Property Event of Default" under the Contract shall mean, with
respect to the Contracting Stockholder at any time, (A) if no Government
Obligations shall be held as assets in substitution for Reference Property at
such time, failure of the assets held by the Contracting Stockholder to consist
of at least the maximum number or amount of each type of Reference Security and
other property constituting part of the Reference Property deliverable by such
Contracting Stockholder under the Contract; and (B) if any Government
Obligations shall be owned by the Contracting Stockholder as substitute assets
for Reference Property at such time, failure of such Government Obligations to
have a market value (expressed in U.S. dollars) at such time of at least 105% of
the difference between (x) the aggregate value (expressed in U.S. dollars) of
the maximum number or amount of each type of Reference Security and other
property constituting part of the Reference Property deliverable by the
Contracting Stockholder under the Contract and (y) the aggregate value
(expressed in U.S. dollars) of the number or amount of each type of Reference
Security and other property constituting part of the Reference Property assets
held by the Contracting Stockholder at such time.
The occurrence of an Exchange Property Event of Default, certain bankruptcy,
insolvency events affecting the Contracting Stockholder or AMP and certain other
events (each such event, a "Default") will cause an automatic acceleration of
the Contracting Stockholder's obligations under the Contract. In any such event,
the Contracting Stockholder will hold a number or amount of each type of
Reference Security and other property constituting part of the Reference
Property having an aggregate value equal to the "Aggregate Acceleration Value"
of the Contract for the benefit of the holders of the STRYPES absolutely. The
Aggregate Acceleration Value will be based on an "Acceleration Value" determined
by the Administrator on the basis of quotations from independent dealers. Each
quotation will be for a U.S. dollar amount that would be paid to the relevant
dealer in consideration of an agreement between the Trust and such dealer that
would have the effect of preserving the rights of the holders of the STRYPES to
receive the number or amount of each type of Reference Security and other
property constituting part of the Reference Property under a portion of the
Contract that corresponds to 1,000 of the STRYPES offered hereby. The
Administrator will request quotations from four nationally recognized
independent dealers on or as soon as reasonably practicable following the date
of acceleration. If four quotations are provided, the Acceleration Value will be
the arithmetic mean of the two quotations remaining after disregarding the
highest and the lowest quotations. If two or three quotations are provided, the
Acceleration Value will be the arithmetic mean of such quotations. If one
quotation is provided, the Acceleration Value will be equal to such quotation.
The Aggregate Acceleration Value will be computed by dividing the Acceleration
Value by 1,000 and multiplying the quotient thereof by the aggregate number of
STRYPES then outstanding, except that, if no quotations are provided, the
Aggregate Acceleration Value will be the value of the aggregate number or amount
of each type of Reference Security and other property constituting part of the
Reference Property that would be required to be delivered on such date under the
Contract if the Exchange Date were redefined for all purposes to be the
acceleration date. Upon the occurrence of a Default, the number or amount of
each type of Reference Security and other property constituting part of the
Reference Property deliverable for each STRYPES will be based solely on the
Aggregate Acceleration Value described above for the Contract.
If a Cash Dissolution Event or certain events of bankruptcy or insolvency of
the issuer of a Reference Security shall occur, the Contracting Stockholder's
obligations under the Contract shall be automatically accelerated and the
Contracting Stockholder shall deliver to but only upon notice of such event from
the Trust, on the earliest practicable Business Day following (but in no event
later than the tenth Business Day following) (i) the date of payment to holders
of the applicable Reference Securities of the applicable Cash Reorganization
Price, in the case of a Cash Dissolution Event or (ii) in all other cases, the
effective date of such event (in each case, the "Early Settlement Date"), the
aggregate amount or number of each type of Reference Property it holds that
would be required to be delivered by the Contracting Stockholder under the
Contract if the Exchange Date were redefined for all purposes of the Contract to
be the Early Settlement Date.
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For purposes of the Contract, unless otherwise specifically provided, the
value of a number or amount of any type of Reference Property shall be the U.S.
Dollar Equivalent of (a) for any Reference Property consisting of cash, the
amount of such cash at the time of valuation, (b) for any Reference Property
consisting of property other than cash or Reference Securities, the fair market
value (as determined by a nationally recognized independent banking firm
retained for this purpose by the Contracting Stockholder) as of the time of
valuation of such property, and (c) for any Reference Property consisting of a
Reference Security, an amount equal to the market price of a unit of such
Reference Security at the time of valuation multiplied by the number of units of
such Reference Security then being valued.
Upon the occurrence of a Dissolution Event, the Contracting Stockholder will
hold the Reference Property on trust absolutely for the Trust and AMP will have
only a contingent interest in the Reference Property not required to be
delivered to the holders of the STRYPES. Thereafter the Contracting Stockholder
shall act solely in accordance with the directions of the Custodian and shall
pursuant to the Contract distribute to the Trust, for distribution PRO RATA to
the holders, the Aggregate Acceleration Value in the form of Reference Property.
See "--Trust Dissolution."
FRACTIONAL INTERESTS. No fractional units of any Reference Security will be
delivered to holders of STRYPES if the Contracting Stockholder satisfies its
obligations under the Contract by delivering Reference Property. In lieu of any
fractional unit otherwise deliverable to the Trust in respect of the Contracting
Stockholder's obligations under the Contract, the Trust shall be entitled to
receive an amount in cash equal to the value of such fractional unit based on
the average Closing Price per unit of such Reference Security on the 20 Trading
Days immediately prior to, but not including, the second Trading Day preceding
the Exchange Date.
To the extent practicable, the Contracting Stockholder will deliver to the
Trust fractional interests of any Reference Property other than cash or a
Reference Security if the Contracting Stockholder satisfies its obligations
under the Contract by delivering Reference Property. If such delivery is not
practicable, in lieu of delivering any such fractional interest otherwise
deliverable in respect of the Contracting Stockholder's obligations under the
Contract, the Trust shall be entitled to receive an amount in cash equal to the
value of such fractional interest based on the fair market value (as determined
by a nationally recognized independent investment banking firm retained for this
purpose by the Administrator) as of 10:00 A.M. (New York City time) on the third
Business Day preceding the Exchange Date of such Reference Property other than
cash or a Reference Security.
DESCRIPTION OF CONTRACTING STOCKHOLDER. The Contracting Stockholder is the
trustee of a trust established under the laws of Australia pursuant to a Nominee
Trust Agreement, dated September 26, 1997, between National Australia Trustees
Limited as trustee (the "Contracting Stockholder") and AMP as sole beneficiary
(as supplemented by the Contract, the "Nominee Trust Agreement"). References
herein to the Contracting Stockholder are to National Australia Trustees
Limited, as trustee of the trust established by the Nominee Trust Agreement. On
or prior to the Closing Date, the Contracting Stockholder will acquire from AMP
the Bank Ordinary Shares it is required to own on such date in accordance with
the Contract. Thereafter until the occurrence of a Dissolution Event, the
ownership of the beneficial interest in the assets of the Contracting
Stockholder shall be vested in AMP. Upon the occurrence of a Dissolution Event,
the Contracting Stockholder will act only in accordance with the instructions of
the Custodian until the assets held by the Contracting Stockholder have been
distributed to the Trust to the extent required by and in accordance with the
Contract, with any remaining assets thereafter continuing to be held for the
benefit of AMP until distributed to AMP at AMP's direction. Upon the occurrence
of a Partial Cash Distribution Event, the Contracting Stockholder shall act only
in accordance with the instructions of the Custodian with respect to the portion
of the aggregate Cash Reorganization Price required to be distributed to the
Trust pursuant to the Contract, with the beneficial interest in any remaining
aggregate Cash Reorganization Price thereafter being held for AMP until
distributed to AMP at AMP's direction.
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On September 8, 1997, AMP owned or managed approximately 212 million Bank
Ordinary Shares or 11.9% of the Bank Ordinary Shares then outstanding.
PURCHASE PRICE. The purchase price under the Contract is equal to
$623,779,528 in the aggregate, with $622,779,528 payable to the Contracting
Stockholder by the Trust on or about October 6, 1997 and $1,000,000 payable to
the Escrow Agent to be held for the purposes of the Contract under the Escrow
Agreement. No other consideration is payable by the Trust to the Contracting
Stockholder or AMP in connection with its acquisition of the Contract or the
performance of the Contract by the Contracting Stockholder and AMP.
The Contract will be valued by the Trust at fair value as determined in good
faith at the direction of the Trustees (if necessary, through consultation with
accountants, bankers and other specialists). See "Net Asset Value."
THE U.S. TREASURY SECURITIES
The Trust will purchase and hold a series of zero-coupon U.S. Treasury
Securities with face amounts and maturities corresponding to the amounts and
payment dates of the distributions payable with respect to the STRYPES. Up to
29.2% of the Trust's total assets initially may be invested in these U.S.
Treasury Securities. In the event that the Contract is accelerated as described
under "--Cash Distribution Events" or "--Nominee Trust Agreement; Acceleration,"
the Administrator will liquidate any such U.S. Treasury Securities then held in
the Trust and distribute the proceeds therefrom PRO RATA to the holders,
together with amounts distributed upon acceleration.
ESCROW AGENT
The Escrow Agent is National Australia Bank Limited. Pursuant to the Escrow
Agreement, the Escrow Amount will be held in a demand account of the Escrow
Agent, with any earnings on the Escrow Amount to be distributed to AMP. In the
event of any termination of the Escrow Agreement by the Trust or the resignation
of the Escrow Agent, the Trust must engage a new Escrow Agent to carry out the
duties of the Escrow Agent as set forth in the Escrow Agreement.
TEMPORARY INVESTMENTS
To the extent necessary to enable the Paying Agent to make the next
succeeding quarterly distribution, any moneys deposited with or received by the
Trust will be invested by the Paying Agent in short-term obligations of the U.S.
Government maturing no later than the Business Day preceding the next following
distribution date.
TRUST DISSOLUTION
The Trust will dissolve on or shortly after the Exchange Date, except if
dissolved earlier under certain limited circumstances. Although the Trust has
adopted a fundamental policy that it will not dispose of the Contract or the
Escrow Agreement prior to the Exchange Date, under certain circumstances the
Contract and the Escrow Agreement may terminate prior to the Exchange Date. The
Trust will be dissolved prior to the Exchange Date upon the occurrence of (i) an
Exchange Property Event of Default, (ii) certain events involving the
liquidation, dissolution, winding up or bankruptcy of the Contracting
Stockholder or AMP or certain defaults by either of them under the Contract,
(iii) the liquidation, dissolution, winding up or bankruptcy of an issuer of a
Reference Security, including the Bank as such, other than in connection with a
consolidation, merger or acquisition of such issuer with, into or by another
entity, or (iv) any consolidation, merger or acquisition of an issuer of a
Reference Security with, into or by another entity in connection with which all
the Reference Securities constituting the Reference Property immediately prior
to the consolidation, merger or acquisition are exchanged for consideration
consisting solely of cash and no other property (each, a "Dissolution Event").
Upon the occurrence of a Dissolution Event, the holders of
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the STRYPES will become absolutely entitled to the assets received pursuant to
the Contract, the Escrow Amount will be paid to the Contracting Stockholder, the
net assets of the Trust will be distributed PRO RATA to the holders as soon as
practical thereafter and the term of the Trust will expire. See "--The
Contract-- Cash Distribution Events" and "--Nominee Trust Agreement;
Acceleration."
Written notice of any dissolution shall be sent to holders specifying the
record date for the distribution to holders, the amount distributable
(including, if applicable, the number or amount of each type of Reference
Security and other property constituting part of the Reference Property to which
they are absolutely entitled) with respect to each STRYPES and the time of
dissolution as determined by the Trustees. Any such notice will be provided by
mail, sent to each holder at such holder's address as it appears on the register
for the STRYPES, first class, postage prepaid not less than nine days prior to
the date on which such distribution is to be made. At or prior to the mailing of
such notice, the Administrator shall publish a public announcement in THE WALL
STREET JOURNAL or another daily newspaper of national circulation in the United
States.
FRACTIONAL UNITS AND INTERESTS
No fractional units of any Reference Security or amount of each type of
Reference Security and other property constituting part of the Reference
Property, or fractional interests of any Reference Property other than cash or a
Reference Security, will be distributed by the Trust to holders of STRYPES on
the Exchange Date or upon earlier dissolution of the Trust. All fractional units
or interests to which holders of STRYPES would otherwise be entitled on the
Exchange Date or upon earlier dissolution of the Trust will be aggregated by the
Administrator and, in lieu of the fractional units or interests to which a
holder would otherwise have been entitled in respect of the total number of
STRYPES held by such holder, such holder will receive cash.
INVESTMENT RESTRICTIONS
The Trust has adopted a fundamental policy that the Trust may not purchase
any securities or instruments other than the U.S. Treasury Securities, the
Contract and any Reference Security received pursuant to the Contract and, for
cash management purposes, short-term obligations of the U.S. Government; issue
any securities or instruments except for the STRYPES; make short sales or
purchase securities on margin; write put or call options; borrow money;
underwrite securities; purchase or sell real estate, commodities or commodities
contracts; or make loans. The Trust has adopted a fundamental policy that the
Contract may not be disposed of during the term of the Trust and that, unless
the Trust dissolves prior to the Exchange Date due to the occurrence of a
Dissolution Event, the U.S. Treasury Securities may not be disposed of prior to
their respective maturities. The Trust has also adopted a policy to invest at
least 65% of its portfolio initially in the Contract. While the Trust would
ordinarily expect to maintain its investment in the Contract at or above 65% of
its assets, its proportionate investment in the Contract could fall below 65% of
its assets as a result of a Partial Cash Distribution Event or fluctuations in
the relative value of its investment in the Contract and its investment in U.S.
Treasury Securities.
Because of the foregoing limitations, the Trust's investments will be
concentrated initially in the banking and financial services industry, which is
the principal industry in which the Bank currently operates. However, to the
extent that in the future the Bank diversifies its operations into one or more
other industries or is acquired by an entity that operates in one or more other
industries, the Trust's investments will be less concentrated in the banking and
financial services industry.
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RISK FACTORS
NO ACTIVE PORTFOLIO MANAGEMENT
It is a fundamental policy of the Trust that the Contract may not be
disposed of during the term of the Trust and that, unless the Trust dissolves
prior to the Exchange Date upon the occurrence of a Dissolution Event, the U.S.
Treasury Securities may not be disposed of prior to their respective maturities
and the Escrow Agreement may not be disposed of prior to the second Business Day
prior to the Exchange Date. As a result, the Trust will continue to hold the
Contract despite any significant decline in the value of the Reference Property,
including the Bank Ordinary Shares, or adverse changes in the financial
condition of the issuer of the Reference Security, including the Bank. The Trust
will not be managed like a typical closed-end investment company.
ABSENCE OF TRADING HISTORY; MARKETABILITY; POSSIBILITY OF THE STRYPES TRADING AT
A DISCOUNT FROM NET ASSET VALUE
The STRYPES have no trading history and it is not possible to predict how
they will trade in the secondary market. The trading price of the STRYPES may
vary considerably prior to the Exchange Date due to, among other things,
fluctuations in trading prices of the Bank Ordinary Shares, Bank ADSs or other
Reference Securities (which may occur due to changes in the financial condition,
results of operations or prospects of the Bank or other issuer of Reference
Securities, or because of complex and interrelated political, economic,
financial and other factors that can affect the capital markets generally, the
stock exchanges or quotation systems on which the Bank Ordinary Shares, Bank
ADSs or other Reference Securities are traded and the market segment of which
the Bank or other issuer of Reference Securities is a part), fluctuations in
interest rates and rates of exchange between the Australian dollar and the U.S.
dollar, and other factors that are difficult to predict and beyond the Trust's
control.
The Underwriter currently intends, but is not obligated, to make a market in
the STRYPES. There can be no assurance that a secondary market will develop or,
if a secondary market does develop, that it will provide the holders of the
STRYPES with liquidity of investment or that it will continue for the life of
the STRYPES. The STRYPES have been approved for listing on the NYSE, subject to
official notice of issuance. There can be no assurance, however, that the
STRYPES will not later be delisted or that trading in the STRYPES on the NYSE
will not be suspended. In the event of a delisting or suspension of trading on
such exchange, the Trust will apply for listing of the STRYPES on another
national securities exchange or for quotation on another trading market. If the
STRYPES are not listed or traded on any securities exchange or trading market,
or if trading of the STRYPES is suspended, pricing information for the STRYPES
may be more difficult to obtain, and the price and liquidity of the STRYPES may
be adversely affected.
The Trust is a recently organized closed-end investment company with no
previous operating history. Shares of closed-end investment companies frequently
trade at a discount from their net asset value, which is a risk separate and
distinct from the risk that the Trust's net asset value will decrease. The Trust
cannot predict whether the STRYPES will trade at, below or above their net asset
value. The risk of purchasing investments that might trade at a discount is more
pronounced for investors who wish to sell their investments in a relatively
short period of time after completion of the Trust's initial public offering
because for those investors realization of a gain or loss on their investments
is likely to be more dependent upon the existence of a premium or discount than
upon portfolio performance. STRYPES are not subject to redemption.
REFERENCE PROPERTY ADJUSTMENTS
The Reference Property (or, in the event AMP elects to exercise the Cash
Settlement Option or is otherwise obligated to deliver cash under the Contract,
the amount of cash or combination of cash and Reference Property) that the Trust
is entitled to receive (for the benefit of the holders of the STRYPES
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absolutely) pursuant to the Contract on the Business Day immediately preceding
the Exchange Date or upon acceleration of the Contract is subject to adjustment
for certain events arising from, among other things, a merger, consolidation or
acquisition in which the Bank is not the surviving entity and the liquidation,
dissolution, winding up or bankruptcy of the Bank or other issuer of a Reference
Security, as well as stock splits and combinations, stock dividends and certain
other actions of the Bank or other issuer of a Reference Security that modify
its capital structure. See "Investment Objective and Policies--The
Contract--Reference Property Adjustments." Such number or amount of each type of
Reference Property (or amount of cash or combination of cash and Reference
Property) to be received by the Trust will not be adjusted for other events,
such as offerings of Bank Ordinary Shares for cash (other than certain rights
and warrants offerings) or in connection with acquisitions.
The Bank is not restricted in connection with the STRYPES from issuing
additional Bank Ordinary Shares during the term of the Trust. In addition, no
stockholder of the Bank, including AMP and the Contracting Stockholder, is
precluded from selling Bank Ordinary Shares (other than AMP and the Contracting
Stockholder during the 90 day period following the date of this Prospectus
applicable to certain Bank Ordinary Shares) or from participating in or voting
for a reorganization, merger or acquisition of the Bank. The Contracting
Stockholder is precluded from selling Bank Ordinary Shares except for tendering
the Bank Ordinary Shares or other Reference Securities it holds in connection
with any consolidation, merger or acquisition of the Bank or successor issuer of
Reference Securities as a whole or in connection with permitted substitution of
collateral or delivering to the Trust on the Business Day immediately preceding
the Exchange Date. Neither the Bank nor any stockholder of the Bank, including
the Contracting Stockholder and AMP, has any obligation to consider the
interests of the holders of the STRYPES for any reason. Additional issuances,
sales, reorganizations, mergers and acquisitions may materially and adversely
affect the price of Bank Ordinary Shares, Bank ADSs or other Reference
Securities and, because of the relationship of the number of Bank Ordinary
Shares (or amount of cash) to be received pursuant to the Contract to the price
of the Bank Ordinary Shares, such other events may materially and adversely
affect the trading price of the STRYPES. There can be no assurance that the Bank
will not take any of the foregoing actions, or that it will not make offerings
of, or that principal stockholders, including the Contracting Stockholder and
AMP, will not sell any Bank Ordinary Shares, in the future, or as to the amount
of any such offerings or sales.
LIMITED TERM
The term of the Trust will expire on or shortly after the Exchange Date,
unless the Trust is dissolved earlier upon the occurrence of a Dissolution
Event. On or shortly after the Exchange Date, the Trust will distribute the
Reference Property and/or cash received by the Trust (for the benefit of holders
of the STRYPES absolutely) pursuant to the Contract and other net assets held by
the Trust PRO RATA to holders and dissolve shortly thereafter. Upon the
occurrence of a Dissolution Event, the holders of the STRYPES become absolutely
entitled to the assets received pursuant to the Contract, the Trust's other
assets will be liquidated, the Escrow Amount will be paid to the Contracting
Stockholder, the net assets of the Trust will be distributed PRO RATA to holders
as soon as practicable thereafter and the term of the Trust will expire.
NON-DIVERSIFIED PORTFOLIO
The Trust's assets will consist almost entirely of the Contract and the U.S.
Treasury Securities. As a result, investments in the Trust may be subject to
greater risk than would be the case for a company with a more diversified
portfolio of investments.
COMPARISON TO OTHER EQUITY SECURITIES; RELATIONSHIP TO BANK ORDINARY SHARES
The terms of the STRYPES are similar to those of ordinary equity securities
in that the value of the Reference Property (or, in the event AMP exercises the
Cash Settlement Option, the amount of cash or combination of cash and Reference
Property) that a holder of a STRYPES will receive on the Exchange
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Date is not fixed, but is based on the Reference Property Value (see "Investment
Objective and Policies-- General" and "--The Contract"). ACCORDINGLY, THERE CAN
BE NO ASSURANCE THAT THE AMOUNT RECEIVABLE BY THE HOLDER OF A STRYPES ON THE
EXCHANGE DATE OR AS A RESULT OF ANY DISSOLUTION EVENT PLUS ANY CASH DISTRIBUTION
TO THE HOLDER FOLLOWING ANY PARTIAL CASH DISTRIBUTION EVENT WILL BE EQUAL TO OR
GREATER THAN THE ISSUE PRICE OF THE STRYPES. IF THE REFERENCE PROPERTY VALUE IS
LESS THAN THE INITIAL PRICE ON THE EXCHANGE DATE, WHETHER OR NOT A PARTIAL CASH
DISTRIBUTION EVENT OCCURS, THE AMOUNT DISTRIBUTED TO THE HOLDER OF A STRYPES MAY
BE LESS THAN THE ISSUE PRICE PAID FOR THE STRYPES, IN WHICH CASE AN INVESTMENT
IN THE STRYPES WILL RESULT IN A LOSS. SEE "INVESTMENT OBJECTIVES AND
POLICIES--GENERAL" AND "--THE CONTRACT."
The trading prices of the STRYPES in the secondary market will be affected
by the trading prices of the Bank Ordinary Shares, Bank ADSs or other Reference
Securities in the secondary market. It is impossible to predict whether the
price of the Bank Ordinary Shares or other Reference Property will rise or fall.
Trading prices of Bank Ordinary Shares will be influenced by the Bank's
operating results and prospects and by economic, financial and other factors and
market conditions that can affect the capital markets generally, including the
level of, and fluctuations in, the trading prices of stocks generally and sales
of substantial amounts of Bank Ordinary Shares in the market subsequent to the
offering of the STRYPES or the perception that such sales could occur.
LIMITATIONS ON OPPORTUNITY FOR EQUITY APPRECIATION; POTENTIAL LOSSES
The opportunity for equity appreciation afforded by an investment in the
STRYPES is less than the opportunity for equity appreciation afforded by a
direct investment in the Bank Ordinary Shares or Bank ADSs because the amount
receivable by a holder of a STRYPES on the Exchange Date, whether or not a
Partial Cash Distribution Event occurs, will exceed the issue price of such
STRYPES only if the Reference Property Value exceeds the Threshold Appreciation
Price (which represents an appreciation of 11.5% over the Initial Price).
Moreover, assuming no Partial Cash Distribution Event occurs, each STRYPES will
entitle the holder to receive on the Exchange Date only 89.68% (the percentage
equal to the Initial Price divided by the Threshold Appreciation Price) of any
appreciation of the value of the Reference Property Value above the Threshold
Appreciation Price. See "Investment Objective and Policies--The Contract."
Because the price of the Reference Property is subject to market fluctuations,
the value of the Reference Property (or, in the event AMP exercises the Cash
Settlement Option or is otherwise obligated to deliver cash under the Contract,
the amount of cash or combination or cash and Reference Property) received by
the Trust (for the benefit of holders of the STRYPES absolutely) on the Business
Day immediately preceding the Exchange Date, determined as described herein, may
be more or less than the issue price paid for the STRYPES.
NO STOCKHOLDER RIGHTS
Holders of the STRYPES will not be entitled to any rights with respect to
the Reference Property (including, without limitation, voting rights and rights
to receive any dividends or other distributions in respect thereof) until such
time, if any, as the Contracting Stockholder shall have delivered the Reference
Property on the Business Day prior to the Exchange Date or upon the occurrence
of a Dissolution Event, and unless the applicable record date, if any, for the
exercise of such right occurs after such delivery. For example, in the event
that an amendment is proposed to the constituent documents of the Bank and the
record date for determining the stockholders of record entitled to vote on such
amendment occurs prior to such delivery, holders of the STRYPES will not be
entitled to vote on such amendment and AMP as beneficial owner of the Reference
Property will be entitled to, or to direct the Contracting Stockholder to,
exercise all voting rights with respect to such amendment, without regard to the
interests of the holders of the STRYPES.
The Contracting Stockholder is not responsible for the determination or
calculation of the amount receivable by holders of the STRYPES on the Exchange
Date or upon earlier dissolution of the Trust. The
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Contract among the Trust, the Contracting Stockholder and AMP is a commercial
transaction and does not create any rights in, or for the benefit of, any third
party, including any holder of STRYPES.
RISK RELATING TO INSOLVENCY OF AMP AND CONTRACTING STOCKHOLDER
AMP
AMP is presently established under the Australian Mutual Provident Society's
Act 1910 of NSW, Australia.
If AMP were to be wound up in New South Wales, the winding up provisions of
the Companies (New South Wales) Code would apply to regulate the liquidation
process and the powers of a liquidator to interfere with pre-liquidation
transactions. It is possible that, if AMP were wound up in another State in
Australia, any risk to the holder of a STRYPES relating to the winding up or
insolvency of AMP will arise from the operation of the provisions of Division 7A
of Part 5.6 or Part 5.7B of the Corporations Law, which regulate the liquidation
process and the powers of a liquidator to interfere with pre-liquidation
transactions. The risks are discussed below under "--Disclaimer," "--Undue
Preference and Unfair Preference" and "--Undervalued Transactions and
Uncommercial Transactions."
AMP is expected to be demutualized and reconstructed as a company limited by
shares (after the date of execution of the Contract) and subject to the
Corporations Law after the procedural requirements set out in Division 2 of Part
2 of the Australian Mutual Provident Society (Demutualisation and
Reconstruction) Act 1997 of NSW, Australia are satisfied. When AMP is registered
as a company under the Corporations Law, it will be a company for the purposes
of the Corporations Law, and any risk to the holder of a STRYPES relating to the
winding up or insolvency of AMP after its demutualization and reconstruction
would arise from the operation of the provisions in the Corporations Law which
regulate the liquidation process and the powers of a liquidator to interfere
with pre-liquidation transactions. The risks are discussed below under
"--Disclaimer," "--Undue Preference and Unfair Preference" and
"--Undervalued Transactions and Uncommercial Transactions."
As AMP is a life insurance company, it is also regulated by the Life
Insurance Act 1995 and will also be regulated by that Act after its
demutualization and reconstruction. Under the Life Insurance Act 1995, the
business of AMP may be placed under judicial management if, among other things,
AMP is or is likely to become unable to meet its liabilities or fails to meet a
solvency standard. A judicial manager has the same power to disclaim property of
AMP as a liquidator would have under the Corpoations Law (see discussion below
under the heading "--Disclaimer").
AMP may also be wound up by a Court under the Life Insurance Act 1995 upon
recommendation by the judicial manager or by the Insurance and Superannuation
Commissioner, such winding up to be conducted in accordance with the
Corporations Law. The risks to the holder of a STRYPES relating to the winding
up of AMP are discussed below under "--Disclaimer," "--Undue Preference and
Unfair Preference" and "--Undervalued Transactions and Uncommercial
Transactions."
CONTRACTING STOCKHOLDER (IN ITS PERSONAL CAPACITY)
The Contracting Stockholder is incorporated under the provisions of the
Corporations Law. The risk to the holder of a STRYPES relating to the winding up
or insolvency of the Contracting Stockholder (in its personal capacity) would
arise from the operation of the provisions in the Corporations Law which
regulate the liquidation process and the powers of a liquidator to interfere
with pre-liquidation transactions. The risks to the holder of a STRYPES relating
to the winding up of the Contracting Stockholder are discussed below under the
headings "--Disclaimer," "--Undue Preference and Unfair Preference" and
"--Undervalued Transactions and Uncommercial Transactions."
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CONTRACTING STOCKHOLDER (IN ITS TRUSTEE CAPACITY)
To the extent that the Contracting Stockholder holds the types of Reference
Property or cash in trust for the Trust, the risk to the holder of a STRYPES
would arise as a result of the powers provided under trustee legislation in
Australia and by the general power of the court to administer a trust. These
powers allow a court to make various orders, including, injunctive orders or
vesting orders, which may have the effect of delaying or preventing delivery of
the Reference Property or cash under the Contract, which could adversely affect
the value of the STRYPES on the Exchange Date or upon earlier dissolution of the
Trust.
DISCLAIMER
Section 454 of the Companies (New South Wales) Code and Division 7A of Part
5.6 of the Corporations Law deal with circumstances in which contracts such as
the Contract can be disclaimed. Any action to disclaim the outstanding
obligations of AMP or the Contracting Stockholder under the Contract would at
least delay settlement. AMP believes that the Contract would not be disclaimed
so as to prevent the delivery of shares of Reference Property or cash under the
Contract. However, if the Contract were validly disclaimed, this would adversely
affect the value of the STRYPES on the Exchange Date or upon earlier dissolution
of the Trust.
UNDUE PREFERENCE AND UNFAIR PREFERENCE
Under Section 451 of the Companies (New South Wales) Code (incorporating
section 122 of the Australian Bankruptcy Act) and Part 5.7B of the Corporations
Law, transactions occurring at a time when a company is insolvent and which have
the effect of improving the position of an unsecured creditor over other
unsecured creditors, can be challenged by a liquidator. AMP believes that it and
the Contracting Stockholder will not be insolvent at the time of the Contract
and that the subsequent completion of the Contract will not have the effect of
improving the position of an unsecured creditor over other unsecured creditors.
However, if delivery of the Reference Property or cash under the Contract was
found to be a preference, this would adversely affect the value of the STRYPES
on the Exchange Date or upon earlier dissolution of the Trust and delay
settlement of the Contract.
UNDERVALUED TRANSACTIONS AND UNCOMMERCIAL TRANSACTIONS
Under Section 451 of the Companies (New South Wales) Code (incorporating
section 120 of the Australian Bankruptcy Act), transfers of property for no
consideration, or for less than market value, and, under Part 5.7B of the
Corporations Law, transactions which it may be expected that a reasonable person
in the company's position would not have entered into, can be challenged by a
liquidator. AMP believes that the Contract will constitute an enforceable
obligation under these provisions and would not be set aside in the event of the
insolvency of AMP or the Contracting Stockholder. However, if delivery of the
Reference Property or cash under the Contract was found, for example, to involve
a transfer for inadequate consideration, this would adversely affect the value
of the STRYPES on the Exchange Date or upon earlier dissolution of the Trust and
delay settlement of the Contract.
RISKS RELATING TO CREDITOR COMPROMISE UNDER PART 5.3A OF THE CORPORATIONS LAW
Under Part 5.3A of the Corporations Law, a company that is or is likely to
become insolvent may seek protection by appointing an Administrator. A
moratorium then operates while the Administrator investigates the company in
order to report to creditors. Creditors must then decide the company's future,
including whether to reconstruct the company's affairs under a "Deed of Company
Arrangement". If the Contracting Stockholder became insolvent and its creditors
approved a deed incorporating provisions to compromise the Contracting
Stockholder's outstanding obligations, this could have an adverse impact on the
Contracting Stockholder's obligation to deliver Reference Securities or cash or
other Reference Property under the Contract and delay settlement of the
Contract.
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U.S. BANKRUPTCY MATTERS
The Contracting Stockholder and AMP are domiciled in Australia and are not
engaged in business in the United States. Consequently, if the Contracting
Stockholder or AMP were to become insolvent, the Contracting Stockholder or AMP
would most likely be subject to the Australian insolvency laws discussed above.
However, it is possible that the Contracting Stockholder or AMP could become a
debtor under Title 11 of the United States Code (the "Bankruptcy Code").
In the event the Contracting Stockholder or AMP were to become debtors under
the Bankruptcy Code, the Trust believes that the Contract would constitute a
"securities contract" for purposes of the Bankruptcy Code, performance of which
would not be subject to the automatic stay provisions of the Bankruptcy Code. It
is, however, possible that the Contract will be determined not to qualify as a
"securities contract" for this purpose, in which event, if the Contracting
Stockholder or AMP became subject to the Bankruptcy Code, there could be a delay
in settlement of the Contract, which could adversely affect the time of exchange
or, as a result, the amount received by the holders in respect of the STRYPES.
BANKS (SHAREHOLDINGS) ACT 1972 AND THE BANK'S DEED OF SETTLEMENT
The acquisition and exchange of STRYPES may also have implications for
holders of STRYPES under the Banks (Shareholdings) Act 1972 of Australia
("BSA"). This section is a general summary of the requirements of BSA as they
may affect the purchase or exchange of, STRYPES. This summary does not purport
to be exhaustive nor to give legal advice and should not be relied on by
potential investors, who should seek their own legal advice in relation to all
aspects of the proposed investment including but not limited to those referred
to below.
The BSA prohibits a person having an interest in any voting shares of the
Bank if the nominal amount of the shares in which they have an interest exceeds
10% of the aggregate nominal amounts of all the voting shares (including Bank
Ordinary Shares) of the Bank without the approval of the Treasurer of the
Commonwealth of Australia. Where a person is deemed to be an associate of
another person, the (first) person is deemed to have an interest in the shares
in which their associate has an interest. Acquiring a STRYPES may give the
holder of STRYPES an interest in voting shares of the Bank for the purposes of
the BSA.
The terms "interest in shares" and "associate" are defined in the BSA and
may be relevant to a STRYPES holder. In particular, the concepts may be relevant
as to whether or not the acquisition or exchange of STRYPES is permitted under
the BSA and whether or not the acquisition or exchange of STRYPES or other
interests in Bank Ordinary Shares by a STRYPES holder is permitted under the
BSA. Reference should therefore be made to the BSA in order to determine whether
or not a proposed STRYPES holder, whether alone or with an "associate" would
upon the acquisition or exchange of a STRYPES or the subsequent acquisition of
other interests in Bank Ordinary Shares, acquire an interest in Bank Ordinary
Shares that is not permitted under BSA.
Substantial fines may be imposed under the BSA on a person who fails to
comply with the restrictions imposed under the BSA. In addition, a person may as
a result of a failure to comply with those restrictions be the subject of
various orders under the BSA, including an order to dispose of the interests it
has in Bank Ordinary Shares (including by virtue of holding STRYPES).
Under the Deed of Settlement (being the Bank's constituent document), a
person must not at any time own a number of Bank Ordinary Shares that is greater
than the percentage of total Bank Ordinary Shares, which is that person's
prescribed percentage. Unless a person has board approval from the Bank, the
prescribed percentage is 10%. A person is deemed to own a Bank Ordinary Share if
the person has the power to vote or control the power to vote, or the power to
dispose or to control the power to dispose of a Bank Ordinary Share, or if the
person has an interest in a Bank Ordinary Share for the purposes of BSA
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(the concept of an "interest" in a Bank Ordinary Share is described above and is
applicable in this regard). Accordingly, a holder of STRYPES may, for the
purposes of the Deed of Settlement, be the owner of the number of Bank Ordinary
Shares which the holder of STRYPES could acquire in exchange for the STRYPES. In
addition, the Deed of Settlement imports the restrictions found in the BSA which
are described above. A breach of the Deed of Settlement's ownership restrictions
or the BSA will entitle the Board of Directors of the Bank to order a disposal
of interests a STRYPES holder holds in Bank Ordinary Shares (including by virtue
of holding STRYPES). This paragraph is a summary of the requirements of the Deed
of Settlement as they may affect an application for, or exchange of, STRYPES.
The summary does not purport to be exhaustive nor to give legal advice and
should not be relied on by potential investors, who should seek their own legal
advice in relation to all aspects of the proposed investment including but not
limited to those referred to in this paragraph.
FOREIGN ACQUISITIONS AND TAKEOVERS ACT OF 1975
The acquisition and exchange of STRYPES may also have implications for
holders under the Foreign Acquisitions and Takeovers Act of 1975 (Cth) of
Australia ("FATA"). The following paragraph is a general summary of the
requirements of FATA as they may affect a purchase of or exchange of STRYPES.
The summary does not purport to be exhaustive nor to give legal advice and
should not be relied on by potential investors, who should seek their own legal
advice in relation to all aspects of the proposed investment, including but not
limited to those referred to below.
FATA empowers the Treasurer of the Commonwealth of Australia to prohibit a
proposed acquisition of shares in an Australian corporation where the result of
the acquisition will be that a foreign person, together with its associates,
would have an interest of not less than 15% of the issued shares in the
corporation, or two or more foreign persons (together with their associates)
would in the aggregate have an interest of not less than 40% of the issued
shares in the corporation. Where such an acquisition has already occurred, the
Treasurer has the power to order a person who acquired the shares to dispose of
them. The concepts of "acquisition", "interest", "associate" and "foreign
person" are very broadly defined in FATA. In addition, FATA requires certain
persons who propose to make such acquisitions first to notify the Treasurer of
their intention to do so. The acquisition of STRYPES might constitute an
acquisition or proposed acquisition of the Bank Ordinary Shares for the purpose
of FATA and the exchange of STRYPES for Bank Ordinary Shares will clearly do so.
FATA would require any existing interest in the Bank Ordinary Shares held by a
potential investor or his associates to be aggregated with any interest to be
acquired by virtue of acquisition or exchange of STRYPES for the purposes of
determining whether FATA is complied with.
ASSOCIATIONS ARISING AS A RESULT OF STRYPES TRADING AND CHAPTER 6 CORPORATION
LAW IMPLICATIONS
The acquisition of STRYPES may have implications for holders of STRYPES
under Chapter 6 of the Corporations Law. The precise implications depend upon
the holder's particular circumstances.
The following explanation is provided to assist holders of STRYPES in
identifying the practical obligations that may arise from holding and from
exchanging STRYPES. The obligations of holders will, however, be affected by
circumstances peculiar to individual holders, and holders should obtain their
own advice on the obligations they may have under the Corporations Law.
Disclosure obligations (including obligations on substantial shareholders)
and limitations on acquisitions, under Chapter 6 of the Corporations Law, may
(depending on the holder's other entitlements to Bank Ordinary Shares under the
Corporations Law) affect holders in respect of acquisitions, continuing
holdings, exchanges and dispositions of STRYPES. These obligations and
limitations depend on the "entitlement" of a holder of STRYPES to Bank Ordinary
Shares. A holder is "entitled" under section 609 of the Corporations Law to
securities in which the holder has a relevant interest, securities in which
associates of the holder have a relevant interest, and certain types of
transactional entitlements.
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The Trust has been advised by Allen Allen & Hemsley that by virtue of the
Contract it will be entitled to the Bank Ordinary Shares and therefore will have
a "relevant interest" in the number of Bank Ordinary Shares which are the
subject of the Contract. Consequently, under section 34 of the Corporations Law,
a holder of STRYPES will have a "relevant interest" in the number of Bank
Ordinary Shares that would be acquired upon exchange of STRYPES. A holder of
STRYPES may also have a relevant interest in Bank Ordinary Shares as a result of
holding Bank Ordinary Shares directly.
An "associate" of a holder of STRYPES is a person with whom the holder is
connected in ways specified in sections 10-17 of the Corporations Law. These
include the parent company or subsidiary company of the holder and persons with
whom the holder is acting in concert in relation to securities of or the affairs
of the Bank.
Under Part 6.7 of the Corporations Law, a person who is entitled to 5% or
more of all Bank Ordinary Shares must give written notice to the Bank and to the
ASX.
Under Part 6.2 of the Corporations Law, a person is prohibited from
acquiring Bank Ordinary Shares (or STRYPES) if the acquisition would take the
holder's or any other person's entitlement to Bank Ordinary Shares past 20% of
all Bank Ordinary Shares or increase the acquirer's or any other person's
entitlement to Shares to between 20% and 90% of all Bank Ordinary Shares, unless
such person complies with certain specified procedures such as obtaining the
consent of shareholders of the Bank or making a takeover bid for all the
outstanding Bank Ordinary Shares.
TAX MATTERS
Holders will experience a taxable event upon the exchange of STRYPES to the
extent that AMP satisfies the Contracting Stockholder's obligations under the
Contract with cash. Because of an absence of authority as to the proper
character of any gain or loss resulting from such a taxable event, the ultimate
tax consequences to holders as a result of AMP exercising its Cash Settlement
Option, in whole or in part, or otherwise satisfying the Contracting
Stockholder's obligations in cash is uncertain. Accordingly, prospective
investors in the STRYPES should consult their own tax advisors in this regard.
Investors should also consult their own tax advisors concerning the proper
treatment of their PRO RATA share of the Trust's fees and expenses and the
application of the United States Federal income tax laws to their particular
situations as well as any consequences of the purchase, ownership and
disposition of the STRYPES arising under the laws of any other taxing
jurisdiction. The tax consequences of investing in the STRYPES are described in
greater detail under "Certain Tax Considerations."
DESCRIPTION OF THE STRYPES
Each STRYPES represents a proportionate share of beneficial interest in the
Trust, and a total of 29,000,000 STRYPES will be issued in the Offering,
assuming no exercise of the Underwriter's over-allotment option. Upon
liquidation of the Trust, holders are entitled to share PRO RATA in the net
assets of the Trust available for distribution. STRYPES have no preemptive,
redemption or conversion rights. The STRYPES, when issued and outstanding, will
be fully paid and nonassessable.
Holders are entitled to one vote for each STRYPES held on all matters to be
voted on by holders and are not able to cumulate their votes in the election of
Trustees. The Trust intends to hold annual meetings as required by the rules of
the NYSE. The holders have the right, upon the declaration in writing or vote of
more than two-thirds of the outstanding STRYPES, to remove a Trustee. The
Trustees will call a meeting of holders to vote on the removal of a Trustee upon
the written request of the record holders of 10% of the STRYPES or to vote on
other matters upon the written request of the record holders of 51% of the
STRYPES (unless substantially the same matter was voted on during the preceding
12 months).
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BOOK-ENTRY SYSTEM
The STRYPES will be issued in the form of one or more global securities (the
"Global Securities") deposited with the Depository and registered in the name of
a nominee of the Depository.
The Depository has advised the Trust and the Underwriter as follows: The
Depository is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to Section 17A of the Exchange Act. The
Depository was created to hold securities of persons who have accounts with the
Depository ("participants") and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of certificates. Such participants
include securities brokers and dealers, banks, trust companies and clearing
corporations. Indirect access to the Depository's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly.
Upon the issuance of a Global Security, the Depository or its nominee will
credit the respective STRYPES represented by such Global Security to the
accounts of participants. The accounts to be credited shall be designated by the
Underwriter. Ownership of beneficial interests in such Global Securities will be
limited to participants or persons that may hold interests through participants.
Ownership of beneficial interests by participants in such Global Securities will
be shown on, and the transfer of those ownership interests will be effected only
through, records maintained by the Depository or its nominee for such Global
Securities. Ownership of beneficial interests in such Global Securities by
persons that hold through participants will be shown on, and the transfer of
that ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the STRYPES.
Except as set forth below, owners of beneficial interests in such Global
Securities will not be entitled to have the STRYPES registered in their names
and will not receive or be entitled to receive physical delivery of the STRYPES
in definitive form and will not be considered the owners or holders thereof.
Payment of Reference Property or amounts payable or other consideration
deliverable on exchange of, and any quarterly distributions on, STRYPES
registered in the name of or held by the Depository or its nominee will be made
to the Depository or its nominee, as the case may be, as the registered owner or
the holder of the Global Security. None of the Trust, any Trustee, the
Administrator, the Paying Agent or the Custodian for the STRYPES will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in a Global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Trust expects that the Depository, upon receipt of any payment in
respect of a Global Security, will credit immediately participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in such Global Security as shown on the records of the Depository. The Trust
also expects that payments by participants to owners of beneficial interests in
such Global Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street name," and will be the
responsibility of such participants.
A Global Security may not be transferred except as a whole by the Depository
to a nominee or a successor of the Depository. If the Depository is at any time
unwilling or unable to continue as depositary
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and a successor depositary is not appointed by the Trust within ninety days, the
Trust will issue STRYPES in definitive registered form in exchange for the
Global Security representing such STRYPES. In addition, the Trust may at any
time and in its sole discretion determine not to have any STRYPES represented by
one or more Global Securities and, in such event, will issue STRYPES in
definitive registered form in exchange for all of the Global Securities
representing the STRYPES. Further, if the Trust so specifies with respect to the
STRYPES, an owner of a beneficial interest in a Global Security representing
STRYPES may, on terms acceptable to the Trust and the Depository for such Global
Security, receive STRYPES in definitive form. In any such instance, an owner of
a beneficial interest in a Global Security will be entitled to physical delivery
in definitive form of STRYPES represented by such Global Security equal in
number to that represented by such beneficial interest and to have such STRYPES
registered in its name.
TRUSTEES
The Trustees of the Trust consist of three individuals, none of whom is an
"interested person" of the Trust as defined in the Investment Company Act. The
Trustees of the Trust are responsible for the overall supervision of the
operations of the Trust and perform the various duties imposed on the trustees
of management investment companies by the Investment Company Act.
The Trustees of the Trust are:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME, AGE AND ADDRESS TITLE DURING PAST FIVE YEARS
- ------------------------------------- -------------------- --------------------------
<S> <C> <C>
Donald J. Puglisi, 52 Managing Trustee Professor of Finance
Department of Finance University of Delaware
University of Delaware
Newark, DE 19716
William R. Latham III, 53 Trustee Professor of Economics
Department of Economics University of Delaware
University of Delaware
Newark, DE 19716
James B. O'Neill, 58 Trustee Professor of Economics
Center for Economic University of Delaware
Education & Entrepreneurship
University of Delaware
Newark, DE 19716
</TABLE>
COMPENSATION OF TRUSTEES
Each unaffiliated Trustee will be paid by the Trust, in respect of its
annual fees and anticipated out-of-pocket expenses, out of the proceeds of the
Offering, a one-time, up-front fee of $10,800. The Trust's Managing Trustee will
also receive an additional up-front fee of $3,600 for serving in that capacity.
The Trustees will not receive, either directly or indirectly, any compensation,
including any pension or retirement benefits, from the Trust. None of the
Trustees receives any compensation for serving as a trustee or director of any
other affiliated investment company.
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MANAGEMENT ARRANGEMENTS
PORTFOLIO MANAGEMENT AND ADMINISTRATION
The Trust will be internally managed and will not have an investment
adviser. The Trust's portfolio will not be actively managed. The Trustees of the
Trust will authorize the purchase of the Contract and the U.S. Treasury
Securities as directed by the Declaration of Trust. It is a fundamental policy
of the Trust that the Contract may not be disposed of during the term of the
Trust and that, unless the Trust dissolves prior to the Exchange Date due to the
occurrence of a Dissolution Event, the U.S. Treasury Securities may not be
disposed of prior to their respective maturities.
The Trust will pay all expenses incurred in the operation of the Trust,
including, among other things, accounting services, expenses for legal and
auditing services, taxes, costs of printing proxies, listing fees, if any, stock
certificates and shareholder reports, charges of the Custodian (as defined
below) and the Paying Agent (as defined below), expenses of registering the
STRYPES under Federal and state securities laws, Commission fees, fees and
expenses of Trustees, accounting costs, brokerage costs, litigation and other
extraordinary or non-recurring expenses, mailing and other expenses properly
payable by the Trust. See "--Estimated Expenses."
ADMINISTRATOR
The day-to-day affairs of the Trust will be managed by The Bank of New York,
as trust administrator pursuant to an Administration Agreement. Under the
Administration Agreement, the Trustees have delegated most of their operational
duties to the Administrator, including without limitation, the duties to: (i)
pay, or cause to be paid, all expenses incurred by the Trust; (ii) with the
approval of the Trustees, engage legal and other professional advisors (other
than the independent public accountants for the Trust); (iii) instruct the
Paying Agent to pay distributions on STRYPES as described herein; (iv) cause the
legal and other professional advisors engaged by it to prepare and mail, file or
publish all notices, proxies, reports, tax returns and other communications and
documents for the Trust, and keep all books and records for the Trust; (v) at
the direction of the Trustees, and upon being furnished with reasonable security
and indemnity as the Administrator may require, institute and prosecute legal
and other appropriate proceedings to enforce the rights and remedies of the
Trust; and (vi) make, or cause to be made, all necessary arrangements with
respect to meetings of Trustees and any meetings of holders of STRYPES. The
Administrator will not, however, select the independent public accountants for
the Trust or sell or otherwise dispose of the Trust assets or cause the
Contracting Stockholder to sell or otherwise dispose of the assets of the
Contracting Stockholder (except in connection with an acceleration of the
Contract as described under "Investment Objective and Policies--The
Contract--Cash Distribution Events" and "--Nominee Trust Agreement;
Acceleration," or the settlement of the Contract on the Business Day immediately
preceding the Exchange Date).
The Bank of New York will also act as Exchange Agent, and in such capacity
will provide the U.S. dollar exchange rate quotes required by the Contract and
will convert Australian dollars and other foreign currency into U.S. dollars as
required in the Contract.
The Administration Agreement may be terminated by either the Trust or the
Administrator upon 60 days prior written notice, except that no termination
shall become effective until a successor Administrator has been chosen and has
accepted the duties of the Administrator.
Except for its roles as Administrator, Custodian, Exchange Agent and Paying
Agent of the Trust, The Bank of New York has no other affiliation with, and is
not engaged in any other transactions with, the Trust.
The address of the Administrator is 101 Barclay Street, New York, New York
10286.
CUSTODIAN
The Trust's custodian is The Bank of New York pursuant to a custodian
agreement (the "Custodian Agreement"). In the event of any termination of the
Custodian Agreement by the Trust or the resignation
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of the Custodian, the Trust must engage a new Custodian to carry out the duties
of the Custodian as set forth in the Custodian Agreement.
PAYING AGENT
The paying agent, transfer agent and registrar for the STRYPES is The Bank
of New York pursuant to a paying agent agreement (the "Paying Agent Agreement").
In the event of any termination of the Paying Agent Agreement by the Trust or
the resignation of the Paying Agent, the Trust will use its best efforts to
engage a new Paying Agent to carry out the duties of the Paying Agent.
CONTRACTING STOCKHOLDER
The Contracting Stockholder is National Australia Trustees Limited,
appointed pursuant to the Nominee Trust Agreement. In the event of any
termination of the Nominee Trust Agreement or the resignation of the Contracting
Stockholder, AMP will use its best efforts to engage a new Contracting
Stockholder acceptable to the Custodian to carry out and perform the duties of
the Contracting Stockholder. The Contracting Stockholder cannot resign or be
removed unless a replacement has been appointed by AMP with the consent of the
Trust.
INDEMNIFICATION
The Trust will indemnify each Trustee, the Administrator, the Exchange
Agent, the Paying Agent and the Custodian with respect to any claim, liability
or loss which it may incur in acting as Trustee, Administrator, Exchange Agent,
Paying Agent or Custodian, as the case may be, and any reasonable expense
incurred in connection with any such claim, liability or loss (including the
reasonable costs and expenses of the defense against any claim or liability)
except in the case of willful misfeasance, bad faith, gross negligence or
reckless disregard of their respective duties. Subject to the satisfaction of
certain conditions, Merrill Lynch & Co., Inc. will reimburse the Trust for any
amounts it may be required to pay as indemnification to any Trustee, the
Administrator, the Exchange Agent, the Paying Agent or the Custodian, and
Merrill Lynch & Co., Inc. will in turn be reimbursed by AMP for all such
reimbursements paid by it. AMP will indemnify the Contracting Stockholder with
respect to any claim, liability or loss which it may incur as such, and any
reasonable expense incurred in connection with any such claim, liability or loss
(including the reasonable costs and expenses of the defense against any claim or
liability) except in the case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties.
ESTIMATED EXPENSES
At the closing of the Offering, the Trust will pay to each of the
Administrator, the Exchange Agent, the Custodian and the Paying Agent a
one-time, up-front amount in respect of its fee and, in the case of the
Administrator, certain anticipated ongoing expenses of the Trust over the term
of the Trust. The anticipated Trust expenses to be borne by the Trust include,
among other things, expenses for legal and independent accountants' services,
costs of printing proxies, STRYPES certificates and holder reports and stock
exchange fees. Organization costs of the Trust in the amount of $10,000 and
estimated costs of the Trust in connection with the initial registration and
public offering of the STRYPES in the amount of approximately $580,000 will be
paid by the Trust.
The amount payable to the Administrator in respect of the anticipated
ongoing expenses of the Trust was determined based on expense estimates made in
good faith on the basis of information currently available to the Trust,
including estimates furnished by the Trust's agents. Merrill Lynch & Co., Inc.
will pay any unanticipated operating expenses of the Trust. Merrill Lynch & Co.,
Inc. will be reimbursed by AMP for all fees and expenses of the Trust paid by
it.
DIVIDENDS AND DISTRIBUTIONS
The Trust intends to distribute to holders on a quarterly basis the proceeds
of the U.S. Treasury Securities held by the Trust. The first distribution, in
respect of the period from October 6, 1997 until November 14, 1997, will be made
on November 17, 1997 to holders of record as of November 1, 1997, and
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will equal $.33963 per STRYPES. Thereafter, distributions will be made on
February 15, May 15, August 15 and November 15 (or, of any such date is not a
Business Day, the next succeeding Business Day) of each year to holders of
record as of each February 1, May 1, August 1 and November 1, respectively. Upon
dissolution of the Trust as described in "Investment Objective and
Policies--Trust Dissolution" each holder will share PRO RATA in any remaining
net assets of the Trust.
NET ASSET VALUE
The net asset value of the STRYPES will be calculated by the Trust no less
frequently than quarterly by dividing the value of the net assets of the Trust
(the value of its assets less its liabilities) by the total number of STRYPES
outstanding. The Trust's net asset value will be published semi-annually as part
of the Trust's semi-annual report to holders and at such other times as the
Trustees may determine. The U.S. Treasury Securities held by the Trust will be
valued at the mean between the last current bid and asked prices or, if
quotations are not available, as determined in good faith by the Trust.
Short-term investments having a maturity of 60 days or less are valued at cost
with accrued interest or discount earned included in interest receivable. The
Contract will be valued at the mean of the bid prices received by the
Administrator from at least three independent broker-dealer firms unaffiliated
with the Trust who are in the business of making bids on financial instruments
similar to the Contract and with terms comparable thereto.
CERTAIN TAX CONSIDERATIONS
UNITED STATES FEDERAL INCOME TAX
Set forth in full below is the opinion of Brown & Wood LLP, counsel to the
Trust, as to certain United States Federal income tax consequences of the
purchase, ownership and disposition of the STRYPES. Such opinion is based upon
laws, regulations, rulings and decisions now in effect, all of which are subject
to change (including retroactive changes in effective dates) or possible
differing interpretations. The discussion below deals only with STRYPES held as
capital assets and does not purport to deal with persons in special tax
situations, such as financial institutions, insurance companies, regulated
investment companies, dealers in securities or currencies, tax-exempt entities,
or persons holding STRYPES as a hedge against currency risks, as a position in a
"straddle" or as part of a "hedging" or "conversion" transaction for tax
purposes. It also does not deal with holders of STRYPES other than original
purchasers thereof (except where otherwise specifically noted herein). Moreover,
the discussion below generally does not address the tax consequences of
ownership of the Reference Property. The following discussion also does not
address the tax consequences of investing in the STRYPES arising under the laws
of any state, local or foreign jurisdiction. Persons considering the purchase of
the STRYPES should consult their own tax advisors concerning the application of
the United States Federal income tax laws to their particular situations as well
as any consequences of the purchase, ownership and disposition of the STRYPES
arising under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. holder" means a beneficial owner of STRYPES
that is for United States Federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation, a partnership or other entity created
or organized in or under the laws of the United States or of any political
subdivision thereof (other than a partnership that is not treated as a United
States person under any applicable Treasury regulations), (iii) an estate the
income of which is subject to United States Federal income taxation regardless
of its source, or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust. Notwithstanding the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as United States persons prior to such date that elect to
continue to be treated as United States persons also will be a U.S. holder. As
used herein, the term "non-U.S. holder" means a beneficial owner of STRYPES that
is not a U.S. holder. Unless otherwise specifically provided, the following
opinion of Brown & Wood LLP assumes that on the Exchange Date the Reference
Property that holders of the STRYPES will receive will be only Bank Ordinary
Shares.
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CLASSIFICATION OF THE TRUST
The Trust will be classified as a grantor trust under subpart E, Part I of
subchapter J of the Internal Revenue Code of 1986, as amended (the "Code"). As
such, holders of the STRYPES will be treated for United States Federal income
tax purposes as owners of a PRO RATA undivided interest in the Trust's assets
which will consist of the U.S. Treasury Securities and the Contract.
Accordingly, each holder will be required to report on its United States Federal
income tax return its pro rata share of the entire income on the Trust's assets
in accordance with such holder's regular method of tax accounting.
U.S. HOLDERS
As previously discussed, each U.S. holder will be considered the owner of
its PRO RATA portion of the U.S. Treasury Securities and the Contract held by
the Trust. The cost to a U.S. holder of its STRYPES will be allocated among such
U.S. holder's PRO RATA portion of the U.S. Treasury Securities and the Contract
(in proportion to the relative fair market values thereof on the date on which
the U.S. holder acquires its STRYPES) in order to determine the U.S. holder's
initial tax basis in the U.S. holder's PRO RATA portion of the U.S. Treasury
Securities and the Contract. It is currently anticipated that 29.2% and 70.8% of
the net proceeds of the offering will be used by the Trust to purchase the U.S.
Treasury Securities and as payments under the Contract, respectively.
The U.S. Treasury Securities held by the Trust will be treated for United
States Federal income tax purposes as having original issue discount which will
accrue over the term of the U.S. Treasury Securities. In general, a U.S. holder
will be treated as having purchased each U.S. Treasury Security held by the
Trust with original issue discount in an amount equal to the excess of the U.S.
holder's PRO RATA portion of the amount payable on such U.S. Treasury Security
over the U.S. holder's initial tax basis therefor as discussed above. A U.S.
holder (whether on the cash or accrual method of tax accounting) will be
required to include such original issue discount in income for United States
Federal income tax purposes as it accrues in accordance with a constant yield
method. Because it is expected that 20% or more of the holders of STRYPES will
be accrual basis taxpayers, original issue discount on any short-term U.S.
Treasury Securities (I.E., any U.S. Treasury Security with a maturity of one
year or less from the date it is purchased by the Trust) held by the Trust will
also be currently includable in income by U.S. holders as it accrues on a
straight-line basis (unless a U.S. holder elects to accrue such original issue
discount on a constant yield basis). A U.S. holder's tax basis in its pro rata
portion of a U.S. Treasury Security will be increased by the amount of any
original issue discount included in income by the U.S. holder with respect to
such U.S. Treasury Security (as described above). A U.S. holder will also be
required to recognize capital gain or loss with respect to such U.S. holder's
PRO RATA portion of the U.S. Treasury Securities upon an early dissolution of
the Trust in an amount equal to the difference between the U.S. holder's PRO
RATA portion of the proceeds received by the Trust upon the sale thereof and the
U.S. holder's adjusted tax basis in its PRO RATA portion of the U.S. Treasury
Securities. Such capital gain or loss would be long-term capital gain or loss if
the STRYPES have been held by the U.S. holder for more than one year.
Each U.S. holder will also be treated as having entered into a PRO RATA
portion of the Contract. Except upon early dissolution of the Trust or possibly
upon payment of cash following a Partial Cash Distribution Event by the
Contracting Stockholder prior thereto (as discussed below), under current law, a
U.S. holder generally should not be required to recognize any income, gain or
loss with respect to the Contract until the Exchange Date. On the Exchange Date,
if the Contracting Stockholder delivers Reference Property pursuant to the
Contract in respect of a U.S. holder's STRYPES, the U.S. holder will generally
not realize any taxable gain or loss upon the receipt of such Reference
Property. However, a U.S. holder will generally be required to recognize taxable
gain or loss with respect to any cash received in lieu of fractional units of
any Reference Security, fractional interests of any Reference Property other
than cash, and any Reference Property consisting of cash. The amount of such
gain or loss recognized by a U.S. holder will be equal to the difference, if
any, between the amount of cash received by the U.S. holder and the portion of
the U.S. holder's tax basis in the Contract that is allocable to such fractional
units of any Reference Security, fractional interests of any Reference Property
other than cash, and any Reference Property consisting of
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cash. Any such taxable gain or loss attributable to cash received in lieu of
fractional units of any Reference Security and fractional interests of any
Reference Property other than cash will be treated as short-term capital gain or
loss and, because the matter is uncertain, any such taxable gain or loss
attributable to any Reference Property consisting of cash could be treated as
short-term capital gain or loss, as long-term capital gain or loss (depending
upon the U.S. holder's holding period for the STRYPES), or as ordinary income or
loss. A U.S. holder will have an initial tax basis in any Reference Property (as
allocated among the Reference Property in accordance with the relative fair
market values thereof, as determined on the Exchange Date) received thereby on
the Exchange Date (other than cash received in lieu of fractional units,
fractional interests and any Reference Property consisting of cash) in an amount
equal to the U.S. holder's tax basis in the Contract less the portion of such
tax basis that is allocable to any such fractional units of any Reference
Security, fractional interests of any Reference Property and any Reference
Property consisting of cash (as described above) and will realize taxable gain
or loss with respect to any such Reference Property received thereby on the
Exchange Date only upon the subsequent sale or disposition by the U.S. holder of
such Reference Property. In addition, a U.S. holder's holding period for any
Reference Property received by such U.S. holder on the Exchange Date will begin
on the Exchange Date and will not include the period during which the U.S.
holder held the related STRYPES.
Alternatively, if AMP satisfies the Contract with cash in respect of a U.S.
holder's STRYPES, the U.S. holder will recognize taxable gain or loss with
respect to the Contract in an amount equal to the difference, if any, between
the total amount of cash received by such U.S. holder on the Exchange Date and
an amount equal to the U.S. holder's tax basis in the Contract. It is uncertain
whether such gain or loss would be treated as capital or ordinary. If such gain
or loss is properly treated as capital, then such gain or loss will be treated
as long-term capital gain or loss if the STRYPES has been held by the U.S.
holder for more than one year as of the Business Day immediately preceding the
Exchange Date. If such gain or loss is properly treated as ordinary gain or
loss, it is possible that the deductibility of any loss by a U.S. holder who is
an individual could be subject to the limitations applicable to miscellaneous
itemized deductions provided for under Section 67(a) of the Code. In general,
Section 67(a) of the Code provides that an individual may only deduct
miscellaneous itemized deductions for a particular taxable year to the extent
that the aggregate amount of the individuals's miscellaneous itemized deductions
for such taxable year exceed two percent of the individual's adjusted gross
income for such taxable year (the miscellaneous itemized deductions and other
itemized deductions allowable to high-income individuals, however, are generally
subject to further limitations under Section 68 of the Code). Prospective
investors in the STRYPES who are individuals should also be aware that
miscellaneous itemized deductions are not allowable in computing the United
States Federal alternative minimum tax imposed by Section 55 of the Code.
Prospective investors in the STRYPES are urged to consult their own tax advisors
concerning the character of any gain or loss realized on the Exchange Date with
respect to the Contract in the event that AMP satisfies the Contracting
Stockholder's obligations under the Contract, in whole or in part, with cash on
the Exchange Date, as well as the deductibility of any such loss.
In the event that a U.S. holder receives a combination of cash and Reference
Property on the Exchange Date, the U.S. holder should be required to apply the
foregoing rules to the STRYPES held thereby on a PRO RATA basis in proportion to
the amount of Reference Property and cash received thereby.
Upon the sale or other disposition of a STRYPES prior to the Exchange Date,
a U.S. holder generally will be required to allocate the total amount realized
by such U.S. holder upon such sale or other disposition between the U.S.
holder's PRO RATA portion of the U.S. Treasury Securities and the Contract based
upon their relative fair market values (as determined on the date of
disposition). A U.S. holder will generally be required to recognize taxable gain
or loss with respect to each such component (I.E., the U.S. holder's PRO RATA
portion of the U.S. Treasury Securities and the Contract) in an amount equal to
the difference, if any, between the amount realized with respect to each such
component upon the sale or disposition of the STRYPES (as determined in the
manner described above) and the U.S. holder's adjusted tax basis in each such
component. Any such gain or loss will generally be treated as long-term capital
gain or loss if the U.S. holder has held the STRYPES for more than one year at
the time of disposition.
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The proper treatment of the payment by AMP or Merrill Lynch & Co., Inc. of
various costs and expenses associated with the organization and operation of the
Trust is uncertain. It is possible that there will be no United States Federal
income tax consequences to U.S. holders as a result of any such payments.
However, it is possible that the Internal Revenue Service ("IRS") could assert
that any such payments constitute income to U.S. holders. If the IRS were to
prevail in treating such payments as income, then an individual U.S. holder who
itemizes deductions could possibly amortize and deduct over the term of the
Trust (subject to any applicable limitation such as those in Section 67(a) of
the Code) its PRO RATA portion of any such costs. Moreover, a U.S. holder should
be permitted to amortize and deduct over the term of the Trust (subject to any
applicable limitations such as those in Section 67(a) of the Code) its PRO RATA
portion of the one-time, up-front fees paid to the Administrator, the Custodian
and the Paying Agent, and should be permitted to deduct (subject to any
applicable limitations such as those in Section 67(a) of the Code) its PRO RATA
portion of the other expenses described under "Management
Arrangements--Estimated Expenses" incurred by the Trust resulting from its
ongoing operations (including the fees payable to the Trustees) as such expenses
are incurred. Brown & Wood LLP, counsel to the Trust, believes that a U.S.
holder's pro rata portion of the expenses directly incurred by a U.S. holder in
connection with the organization of the Trust, underwriting discounts and
commissions and other offering expenses should be includable in the cost to the
U.S. holder of the STRYPES. However, there can be no assurance that the IRS will
not take a contrary view. If the IRS were to prevail in treating such expenses
as excludible from a U.S. holder's cost of the STRYPES, such expenses would not
be includable in the basis of the assets of the Trust and should instead,
subject to the limitations provided for under Section 67(a) of the Code, be
amortizable and deductible over the term of the Trust.
POSSIBLE ALTERNATIVE CHARACTERIZATIONS OF THE CONTRACT
Brown & Wood LLP, counsel to the Trust, believes the Contract should be
treated for United States Federal income tax purposes as a prepaid forward
contract for the purchase of a variable number of shares of Bank Ordinary
Shares. The IRS could conceivably take the view that the Contract should be
treated as a loan to the Contracting Stockholder in exchange for a contingent
debt obligation of the Contracting Stockholder. If the IRS were to prevail in
making such an assertion, a U.S. holder might be required to include original
issue discount in income over the term of the STRYPES based on the excess of the
anticipated value of the Bank Ordinary Shares to be received in respect of the
Contract over the amount paid for the Contract. In addition, a U.S. holder would
be required to include interest (rather than capital gain) in income on the
Exchange Date or earlier disposition of the STRYPES in an amount equal to the
excess, if any, of the value of the Bank Ordinary Shares received on the
Exchange Date (or the proceeds from prior disposition of the Contract) over the
aggregate of the basis of the Contract and any interest on the Contract
previously included in income (or might be entitled to an ordinary deduction to
the extent of interest previously included in income and not ultimately
received). The IRS could also conceivably take the view that a U.S. holder
should simply include in income as interest the amount of cash actually received
each year in respect of the STRYPES.
MISCELLANEOUS TAX MATTERS
Special tax rules may apply to persons holding STRYPES as part of a
"synthetic security" or other integrated investment, or as part of a straddle,
hedging transaction or other combination of offsetting positions. For instance,
Section 1258 of the Code may possibly require certain U.S. holders of the
STRYPES who enter into hedging transactions or offsetting positions with respect
to the STRYPES to treat all or a portion of any gain realized on the STRYPES as
ordinary income in instances where such gain may have otherwise been treated as
capital gain. U.S. holders hedging their positions with respect to the STRYPES
or otherwise holding their STRYPES in a manner described above should consult
their own tax advisors regarding the applicability of Section 1258 of the Code,
or any other provision of the Code, to their investment in the STRYPES.
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If as a result of a Dissolution Event, cash, Reference Securities, or a
combination of cash and Reference Securities is delivered pursuant to the
Contract, U.S. holders generally will be required to recognize taxable gain or
loss in respect of any cash received, including any cash received in lieu of
fractional units of Reference Securities or fractional interests of Reference
Property and, in some instances, in respect of any Reference Securities received
upon receipt thereof. Moreover, in some instances, U.S. holders may be required
to recognize at the time of a Reorganization Event taxable gain or loss in
respect of the amount of cash (and, in some cases, Reference Securities) which
is fixed at the time of such Reorganization Event and is to be delivered
pursuant to the Contract. It is uncertain whether any taxable gain or loss
recognized by a U.S. holder as a result of a Reorganization Event would be
capital or ordinary. U.S. holders are urged to consult their own tax advisors
concerning the specific tax consequences of a Reorganization Event on their
investment in a STRYPES.
The proper United States Federal income tax treatment of the receipt by a
U.S. holder of such U.S. holder's PRO RATA portion of cash distributed as a
result of a Partial Cash Distribution Event prior to dissolution of the Trust is
uncertain. It is possible that such a distribution would be treated as a
tax-free return of the U.S. holder's basis in its PRO RATA portion of the
Contract to the extent the amount of such distribution does not exceed such U.S.
holder's basis in its PRO RATA portion of the Contract. Under this analysis, a
U.S. holder would be required to recognize taxable gain as a result of cash
distributed as a result of a Partial Cash Distribution Event that is received
prior to the dissolution of the Trust to the extent that the amount of such
distribution exceeds the U.S. holder's tax basis in its PRO RATA portion of the
Contract. Alternatively, upon the receipt by a U.S. holder of such U.S. holder's
PRO RATA portion of cash distributed as a result of a Partial Cash Distribution
Event prior to the dissolution of the Trust, the U.S. holder may be required to
recognize taxable gain or loss with respect to the U.S. holder's PRO RATA
portion of the Contract in an amount equal to the difference between the amount
of cash received by such U.S. holder and such U.S. holder's tax basis in its PRO
RATA portion of the Contract that is allocable to the proportionate amount of
the Contract in respect of which such cash is received. It is unclear whether
any taxable gain or loss recognized by a U.S. holder as a result of the payment
by the Contracting Shareholder of cash distributed as a result of a Partial Cash
Distribution Event prior to dissolution of the Trust would be treated as capital
gain or loss or ordinary income or loss. Prospective investors in the STRYPES
should consult their own tax advisors concerning the tax consequences to them of
the payment by the Contracting Shareholder of cash distributed as a result of a
Partial Cash Distribution Event.
THE TAXPAYER RELIEF ACT OF 1997
On August 5, 1997, the Taxpayer Relief Act of 1997 (the "Tax Act") was
enacted into law. The Tax Act reduces the maximum rates on long-term capital
gains recognized on capital assets held by individual taxpayers for more than
eighteen months as of the date of disposition (and would further reduce the
maximum rates on such gains in the year 2001 and thereafter for certain
individual taxpayers who meet specified conditions). Prospective investors
should consult their own tax advisors concerning these tax law changes.
NON-U.S. HOLDERS
Subject to the discussion below concerning income that is effectively
connected with a trade or business conducted by a non-U.S. holder in the United
States, payments of interest (including original issue discount) made with
respect to the U.S. Treasury Securities will not be subject to United States
withholding tax, provided that such non-U.S. holder complies with applicable
certification requirements. In general, for a non-U.S. holder to qualify for
this exemption from taxation, the last United States payor in the chain of
payment prior to payment to a non-U.S. holder (the "Withholding Agent") must
have received in the year in which a payment of interest or principal occurs, or
in either of the two preceding calendar years, a statement that (i) is signed by
the beneficial owner of the U.S. Treasury Securities under penalties of perjury,
(ii) certifies that such owner is not a U.S. holder and (iii) provides the name
and
47
<PAGE>
address of the beneficial owner. The statement may be made on an IRS Form W-8 or
a substantially similar form, and the beneficial owner must inform the
Withholding Agent of any change in the information on the statement within 30
days of such change. If STRYPES is held through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide a signed statement to the Withholding Agent. However, in
such case, the signed statement must be accompanied by a copy of the IRS Form
W-8 or the substitute form provided by the beneficial owner to the organization
or institution.
Any capital gain realized in respect of STRYPES by a non-U.S. holder will
generally not be subject to United States Federal income tax if (i) such gain is
not effectively connected with a United States trade or business of such
non-U.S. holder and (ii) in the case of an individual non-U.S. holder, such
individual is not present in the United States for 183 days or more in the
taxable year of the sale or other disposition, or the gain is not attributable
to a fixed place of business maintained by such individual in the United States
and such individual does not have a "tax home" (as defined for United States
Federal income tax purposes) in the United States.
If any interest or gain realized by a non-U.S. holder is effectively
connected with the non-U.S. holder's conduct of a trade or business in the
United States, such interest or gain will be subject to regular United States
Federal income tax in the same manner as if the non-U.S. holder were a U.S.
holder. In addition, in such event, if such non-U.S. holder is a foreign
corporation, such interest or gain may be included in the earnings and profits
of such non-U.S. holder in determining such non-U.S. holder's United States
branch profits tax liability.
BACKUP WITHHOLDING AND INFORMATION REPORTING
A beneficial owner of STRYPES may be subject to information reporting and to
backup withholding at a rate of 31 percent of certain amounts paid to the
beneficial owner unless such beneficial owner provides proof of an applicable
exemption or a correct taxpayer identification number and otherwise complies
with applicable requirements of the backup withholding rules.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
PROSPECTIVE INVESTORS IN THE STRYPES SHOULD BE AWARE THAT THERE IS NO
AUTHORITY DIRECTLY ADDRESSING THE PROPER UNITED STATES FEDERAL INCOME TAX
TREATMENT OF THE STRYPES OR SECURITIES WITH TERMS SUBSTANTIALLY THE SAME AS THE
STRYPES AND THAT NO RULING HAS BEEN REQUESTED FROM THE IRS WITH RESPECT TO THE
STRYPES. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE IRS WILL AGREE WITH THE
FOREGOING DISCUSSION AND THAT THE IRS WILL NOT ASSERT A CONTRARY POSITION AS TO
THE PROPER UNITED STATES FEDERAL INCOME TAX TREATMENT OF THE STRYPES WHICH MIGHT
CAUSE THE CHARACTER AND TIMING OF INCOME, GAIN OR LOSS RECOGNIZED WITH RESPECT
TO A STRYPES TO DIFFER SIGNIFICANTLY FROM SUCH CHARACTER AND TIMING DISCUSSED
ABOVE. PROSPECTIVE INVESTORS IN THE STRYPES ARE THEREFORE URGED TO CONSULT WITH
THEIR OWN TAX ADVISORS PRIOR TO MAKING AN INVESTMENT IN THE STRYPES.
AUSTRALIAN TAXATION
The taxation discussion below of certain Australian tax consequences is
based on the advice of Coopers & Lybrand, Sydney and outlines certain Australian
tax considerations for U.S. holders in relation to the purchase, ownership and
disposition of the STRYPES and the acquisition, ownership and disposition of
Reference Property comprising shares in an Australian corporation, such as the
Bank. The discussion is intended only as a descriptive summary and does not
purport to be a complete technical
48
<PAGE>
analysis or listing of all potential Australian tax effects. This discussion is
based upon laws, regulations, rulings and decisions now in effect and is subject
to changes in Australian law, including in any double taxation convention
between Australia and the United States (the "Treaty"), including retroactive
changes in effective dates, or possible differing interpretations.
Persons considering the purchase of the STRYPES should consult their own tax
advisors concerning the application of Australia's tax laws to their particular
situations as well as any consequences of the purchase, ownership and
disposition of STRYPES or Reference Property arising under the laws of any other
taxing jurisdiction.
The Trust would not be treated as a resident of Australia for Australian
income tax purposes. As it is not in receipt of Australian source income it will
not be subject to Australian tax on income earned. Therefore, quarterly
distributions by the Trust to non-Australian resident holders of STRYPES will
not be subject to Australian tax whether by withholding or otherwise.
On the Exchange Date, the Contracting Stockholder will deliver Reference
Property pursuant to the Contract unless and to the extent AMP satisfies the
Contract with cash. The U.S. holders will be absolutely entitled to Reference
Property comprising shares in an Australian corporation, such as the Bank, on
the Exchange Date and there would not be any Australian tax consequences to the
Trust arising from the delivery of Reference Property pursuant to the Contract
and the distribution of that Reference Property to the U.S. Holders.
The sale of STRYPES or shares in an Australian company may generate
assessable income to certain U.S. holders, such as banks, insurance companies
and other persons or institutions in the business of investment. The provisions
of the Treaty, however, are designed to ensure that this income, less all
allowable deductions, is subject to Australian tax only if the U.S. holder who
is a U.S. resident carries on business in Australia through a permanent
establishment and the income earned is effectively connected with that permanent
establishment.
The sale of STRYPES or shares in an Australian listed company by a U.S.
holder will not generate a net capital gain and therefore will not be subject to
Australian capital gains tax unless:
- the Australian listed company shares are held by U.S. citizens or U.S.
corporations who are residents of Australia;
- the U.S. holder is a non-Australian resident but the U.S. holder and the
U.S. holder's associates together beneficially hold or at any time during
the five years prior to the sale held shares or interests in shares
representing ten percent or more of the issued capital of the Australian
listed company in which the shares are held, such as the Bank. For the
purposes of determining whether ten percent or more of the issued capital
is held, it is possible that any interest the U.S. holder and the U.S.
holder's associates have in the shares by virtue of entitlements under
STRYPES held could be aggregated with holdings of shares by the U.S.
holder and the U.S. holder's associates; or
- the U.S. holder is a non-Australian resident but has at any time used the
STRYPES or Australian company shares in carrying on trade or business
through a permanent establishment in Australia.
and the consideration received for the STRYPES or Australian listed company
shares, as the case may be, (or their market value, if the disposition is not at
arm's length or for no consideration) exceeds the U.S. holder's cost base in the
STRYPES or shares after that cost base is adjusted, where appropriate, for the
effect of inflation.
The Australian income tax rate on capital gains is the same as the ordinary
income tax rate applicable to the relevant taxpayer, subject to capital gains
tax averaging where applicable. In the case of companies this rate is presently
36%.
49
<PAGE>
An individual who is a U.S. holder will be a resident of Australia if, for
example, that person:
- is domiciled in Australia, unless the person's permanent place of abode is
outside Australia; or
- has been in Australia for 183 days or more in a year of income unless that
person has a usual place of abode outside Australia and does not intend to
take up residence in Australia.
However, if that individual would be a resident of the United States for the
purposes of U.S. law, the Treaty allocates residence for the purposes of the
Treaty solely to the country in which the person maintains a permanent home (or
habitual abode) or with which the person has closer personal and economic ties.
A corporation who is a U.S. holder will be a resident of Australia if it is
incorporated in Australia or if it carries on business in Australia and has
either its central management and control in Australia or its voting power
controlled by shareholders who are residents of Australia.
To the extent AMP cash settles any of the obligations of the Contracting
Stockholder under the Contract, any Australian withholding tax payable thereon
will be paid by AMP. It is not contemplated that any withholding tax will be
payable on such payment by AMP or on any payment of those funds by the Trust to
U.S. holders.
Where the U.S. holder acquires, on the Exchange Date, Reference Property
comprising shares in an Australian corporation, such as the Bank, there may be
Australian tax consequences in relation to dividends paid by that Australian
listed corporation. Dividends paid by an Australian corporation may be paid as
franked or unfranked dividends. Australian corporations are required to provide
shareholders with notices detailing the extent to which the dividend is franked
or unfranked and the deductions (if any) of dividend withholding tax. Broadly,
to the extent to which those dividends are paid out of profits which have been
subject to Australian company income tax, they will be franked dividends. Fully
franked dividends paid to a non-resident will be exempt from Australian dividend
withholding tax. Unfranked or partially franked dividends will be subject to
Australian dividend withholding tax to the extent to which the dividend is
unfranked, unless a specific exemption is available.
The interaction of Australian income tax law and the Treaty limits the
Australian dividend withholding tax on unfranked or partially franked dividends
paid to a U.S. resident who is beneficially entitled to the dividend to 15
percent of the unfranked part of the gross dividend. However, where the U.S.
resident carries on business in Australia through a permanent establishment or
performs independent personal services from a fixed base in Australia and the
holding is effectively connected with the permanent establishment or fixed base,
the 15 percent limit should not apply and a dividend withholding tax at the rate
of 30 percent should apply in respect of such dividends in such circumstances.
However, under Australian law an Australian payer of dividends to a U.S.
resident in such circumstances is only obliged to withhold at the rate of 15
percent and, as a matter of policy, the Australian Taxation Office does not seek
to collect any further withholding tax.
No stamp, issue, registration or similar taxes are payable in Australia in
connection with the issue of STRYPES by the Trust. A transfer of or agreement to
transfer STRYPES will not be subject to stamp duty in any State or Territory of
Australia. Stamp duty will be payable by AMP with respect to the delivery on the
Business Day prior to the Exchange Date of Reference Property comprising shares
in an Australian company, such as the Bank, to the U.S. holders. The duty levied
is at the rate of 0.3% calculated on the higher of the sale price or value of
those shares. Subsequent transfers of Australian company shares by U.S. holders
would also be subject to stamp duty although where the transaction is
"on-market" (that is, on the ASX) the stamp duty is payable by the brokers
involved at 0.15% for the selling broker and 0.15% for the buying broker. The
brokers are reimbursed by their clients.
There are no specific estate, inheritance or gift taxes or duties imposed in
Australia.
50
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), the Trust has agreed to sell to Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the "Underwriter"), and the Underwriter has agreed
to purchase 29,000,000 STRYPES.
In the Purchase Agreement, the Underwriter has agreed, subject to the terms
and conditions set forth in the Purchase Agreement, to purchase all of the
STRYPES being sold pursuant to the Purchase Agreement if any of the STRYPES are
purchased.
The Underwriter has advised the Trust that it proposes initially to offer
the STRYPES to the public at the public offering price set forth on the cover
page of this Prospectus. The Underwriter has also advised the Trust that it
proposes to offer STRYPES to certain dealers at the initial public offering
price less a concession not in excess of $.56 per STRYPES. The Underwriter may
allow, and such dealers may reallow, a discount not in excess of $.10 per
STRYPES to certain other dealers. After the initial public offering, the public
offering price, concession and discount may be changed. The sales load of $.941
per STRYPES is equal to 3% of the initial public offering price. Investors must
pay for any STRYPES purchased in the initial public offering on or before
October 6, 1997.
The Trust has granted the Underwriter an option, exercisable for 30 days
from the date of this Prospectus, to purchase up to an aggregate of 3,839,997
additional STRYPES (subject to decrease by the number of STRYPES resulting from
the split of the initial STRYPES described below) to cover over-allotments, if
any, at the initial public offering price less the sales load. To the extent the
Underwriter exercises such option, the Underwriter will have a firm commitment,
subject to certain conditions, to purchase a number of additional STRYPES.
Prior to the Offering, there has been no public market for the STRYPES. The
STRYPES have been accepted for listing on the NYSE, subject to official notice
of issuance.
The Contracting Stockholder and AMP have agreed, subject to certain
exceptions, not to directly or indirectly offer, sell, contract to sell, or
otherwise dispose of, any of an aggregate of 164.2 million Bank Ordinary Shares
(in the case of AMP) owned on the date hereof by AMP in its Statutory Fund No. 1
or (in the case of Contracting Stockholder) so much of such 164.2 million Bank
Ordinary Shares as are held in the name of the Contracting Stockholder, Bank
ADSs or securities convertible or exercisable into, or exchangeable for, Bank
Ordinary Shares for a period of 90 days after the date of this Prospectus,
without the prior written consent of the Underwriter. AMP and its subsidiaries
shall be entitled to deal in any other Bank Ordinary Shares, whether held by
AMP's Statutory Fund No. 1 or otherwise, in accordance with applicable law and
whatever trading policies, practices or strategies of AMP or any of its
subsidiaries then in effect. In addition to such 164.2 million Bank Ordinary
Shares, at September 8, 1997 AMP owned or managed approximately 48 million
additional Bank Ordinary Shares.
AMP has agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments the
Underwriter may be required to make in respect thereof.
In connection with the Offering, ML IBK Positions, Inc., an affiliate of
Merrill Lynch, Pierce, Fenner & Smith Incorporated, has subscribed for and
purchased three STRYPES for a purchase price of $100. Under the Contract, the
Contracting Stockholder will be obligated to deliver to the Trust on the
Business Day immediately preceding the Exchange Date a number or amount of each
type of Reference Property (or, in certain circumstances, cash with an equal
value) in respect of such STRYPES on the same terms as the STRYPES offered
hereby.
51
<PAGE>
Until the distribution of the STRYPES is completed, rules of the Commission
may limit the ability of the Underwriter and any selling group members to bid
for and purchase the STRYPES, the Bank Ordinary Shares or the Bank ADSs. As an
exception to these rules, the Underwriter is permitted to engage in certain
transactions that stabilize the price of the STRYPES, the Bank Ordinary Shares
or the Bank ADSs. Such transactions consist of bids or purchases for the purpose
of pegging, fixing or maintaining the price of the STRYPES, the Bank Ordinary
Shares or the Bank ADSs.
If the Underwriter creates a short position in the STRYPES in connection
with the Offering, I.E., if it sells more STRYPES than are set forth on the
cover page of this Prospectus, the Underwriter may reduce that short position by
purchasing STRYPES in the open market. The Underwriter may also elect to reduce
any short position by exercising all or part of the over-allotment option
described above.
The Underwriter may also impose a penalty bid on certain selling group
members. This means that if the Underwriter purchases STRYPES in the open market
to reduce the Underwriter's short position or to stabilize the price of the
STRYPES, they may reclaim the amount of the selling concession from any selling
group members who sold those STRYPES as part of the Offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
Neither the Trust nor the Underwriter makes any representation or prediction
as to the direction or magnitude of any effect that the transactions described
above may have on the price of the STRYPES, the Bank Ordinary Shares or the Bank
ADSs. In addition, neither the Trust nor the Underwriter makes any
representation that the Underwriter will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
The Underwriter renders investment banking and other financial services to
the Bank from time to time.
LEGAL MATTERS
Certain legal matters will be passed upon for the Trust and for the
Underwriter by their counsel, Brown & Wood LLP, New York, New York. Certain
matters of Delaware law will be passed upon for the Trust by Richards, Layton &
Finger, Wilmington, Delaware, and certain matters of Australian law will be
passed upon for the Trust by Allen Allen & Hemsley, Sydney, New South Wales,
Australia. Certain legal matters will be passed upon for AMP and the Contracting
Stockholder by Coudert Brothers, New York, New York and Minter Ellison, Sydney,
New South Wales, Australia.
EXPERTS
The statement of assets, liabilities and capital included in this Prospectus
has been audited by Deloitte & Touche LLP, independent auditors, as stated in
their opinion appearing herein, and has been included in reliance upon such
opinion given on the authority of said firm as experts in auditing and
accounting.
ADDITIONAL INFORMATION
The Trust has filed with the Commission, Washington D.C. 20549, a
Registration Statement on Form N-2 under the Securities Act with respect to the
STRYPES offered hereby. Further information concerning the STRYPES and the Trust
may be found in the Registration Statement, of which this Prospectus constitutes
a part. The Registration Statement may be inspected without charge at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies of all or any part thereof may
be obtained from such office after payment of the fees prescribed by the
Commission. The Commission maintains a Web site at http://www.sec.gov containing
reports, proxy and information statements and other information regarding
registrants, such as the Trust, that file electronically with the Commission.
52
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholder of WBK STRYPES Trust:
We have audited the accompanying statement of assets, liabilities and
capital of WBK STRYPES Trust as of September 24, 1997. This financial statement
is the responsibility of the Trust's management. Our responsibility is to
express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of assets, liabilities and
capital is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles used and
significant estimates made by the Trust's management, as well as evaluating the
overall financial statement presentation. We believe that our audit of the
financial statement provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of WBK STRYPES Trust, as of
September 24, 1997 in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
September 29, 1997
53
<PAGE>
WBK STRYPES TRUST
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
SEPTEMBER 24, 1997
ASSETS
<TABLE>
<S> <C>
Cash................................................................................. $ 100
Total Assets..................................................................... $ 100
---------
---------
LIABILITIES
Total Liabilities.................................................................... $ 0
---------
---------
NET ASSETS........................................................................... $ 100
---------
---------
CAPITAL
STRYPES
STRYPES issued and outstanding (Note 3)............................................ $ 100
---------
---------
</TABLE>
- ------------------------
(1) The Trust was created as a Delaware business trust on March 14, 1996 and has
had no operations other than matters relating to its organization and
registration as a non-diversified, closed-end management investment company
under the Investment Company Act of 1940, as amended. Costs incurred in
connection with the organization of the Trust and ongoing administrative
expenses will be paid or reimbursed by the Contracting Stockholder.
(2) Offering expenses will be payable upon completion of the Offering and also
will be paid by the Contracting Stockholder.
(3) On September 24, 1997, the Trust issued one STRYPES to ML IBK Positions,
Inc., an affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated, in
consideration for a purchase price of $100.
The Declaration of Trust provides that prior to the Offering, the Trust will
split the outstanding STRYPES to be effected on the date that the price and
underwriting discount of the STRYPES being offered to the public is
determined, but prior to the sale of the STRYPES to the Underwriter. The
outstanding STRYPES will be split into the smallest whole number of STRYPES
that would result in the per STRYPES amount recorded as capital, after
effecting the split, not exceeding the public offering price per STRYPES.
54
<PAGE>
INDEX OF DEFINED TERMS
Set forth below are the locations herein of certain defined terms.
<TABLE>
<CAPTION>
PAGE
TERM NUMBERS
- --------------------------------------------------------------------------------------------------- -------------
<S> <C>
Acceleration Value................................................................................. 27
Adjusted Present Value............................................................................. 2, 8, 24
Adjusted Treasury Rate............................................................................. 25
Administrator...................................................................................... 12
Aggregate Acceleration Value....................................................................... 27
AMP................................................................................................ 1, 6
associate.......................................................................................... 38
ASX................................................................................................ 1, 3, 5
Australia.......................................................................................... 4
Australian Trust................................................................................... 9
Bank............................................................................................... 1, 5, 20
Bank ADRs.......................................................................................... 1, 6
Bank ADSs.......................................................................................... 1, 6
Bank Ordinary Shares............................................................................... 1, 6
Bankruptcy Code.................................................................................... 36
BSA................................................................................................ 36
Business Day....................................................................................... 17
Cash Dissolution Event............................................................................. 2, 7, 24
Cash Reorganization Amount......................................................................... 2, 8, 24
Cash Reorganization Price.......................................................................... 2, 8
Cash Settlement Option............................................................................. 2, 7, 18
Closing Price...................................................................................... 17
Code............................................................................................... 44
Commission......................................................................................... 22
Comparable Treasury Issue.......................................................................... 25
Comparable Treasury Price.......................................................................... 25
Contract........................................................................................... 1, 6
Contracting Stockholder............................................................................ 1, 6, 28
Custodian.......................................................................................... 12
Custodian Agreement................................................................................ 41
Declaration of Trust............................................................................... 15
Default............................................................................................ 27
Depository......................................................................................... 18
Dilution Event..................................................................................... 23
Dissolution Event.................................................................................. 2, 7, 29
Distributed Assets................................................................................. 23
Early Settlement Date.............................................................................. 27
Escrow Agent....................................................................................... 8
Escrow Agreement................................................................................... 8
Escrow Amount...................................................................................... 8
Exchange Act....................................................................................... 5
Exchange Agent..................................................................................... 12
Exchange Date...................................................................................... 1, 5
Exchange Property.................................................................................. 9
Exchange Property Event of Default................................................................. 27
Extraordinary Cash Dividend........................................................................ 23
</TABLE>
55
<PAGE>
<TABLE>
<CAPTION>
PAGE
TERM NUMBERS
- --------------------------------------------------------------------------------------------------- -------------
<S> <C>
FATA............................................................................................... 37
Global Securities.................................................................................. 39
Government Obligations............................................................................. 26
holders............................................................................................ 6
Initial Price...................................................................................... 1, 3, 6, 10, 15
Insufficiency Determination........................................................................ 26
Investment Company Act............................................................................. 5
IRS................................................................................................ 46
National Australia Trustees........................................................................ 9
Nominee Trust Agreement............................................................................ 9, 28
non-U.S. holder.................................................................................... 43
Noon Buying Rate................................................................................... 16
NYSE............................................................................................... 1
Offering........................................................................................... 5
Original Issue Discount............................................................................ 11
Partial Cash Distribution Date..................................................................... 3, 8, 25
Partial Cash Distribution Event.................................................................... 2, 7, 24
participants....................................................................................... 39
Paying Agent....................................................................................... 12
Paying Agent Agreement............................................................................. 42
Primary Treasury Dealer............................................................................ 25
Purchase Agreement................................................................................. 51
Quotation Agent.................................................................................... 25
Reference Date..................................................................................... 16
Reference Property................................................................................. 1, 6, 16
Reference Property Value........................................................................... 16
Reference Security................................................................................. 16
Reference Treasury Dealer.......................................................................... 25
Reference Treasury Dealer Quotations............................................................... 25
Remaining Life..................................................................................... 26
Reorganization Event............................................................................... 24
STRYPES............................................................................................ 1
Tax Act............................................................................................ 47
Threshold Appreciation Price....................................................................... 1, 3, 6, 10, 15
Trading Day........................................................................................ 17
Treasury Constant Maturities....................................................................... 25
Treaty............................................................................................. 49
Trust.............................................................................................. 1, 5
Underwriter........................................................................................ 51
U.S. Dollar Equivalent............................................................................. 16
U.S. holder........................................................................................ 43
U.S. Treasury Securities........................................................................... 1, 6
Westpac............................................................................................ 5, 20
Withholding Agent.................................................................................. 47
</TABLE>
56
<PAGE>
FORM OF BANK ADS REQUEST/REVOCATION LETTER
WBK STRYPES-SM- TRUST
WBK STRYPES Trust
c/o The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Dear Sirs:
[The undersigned, being the owner of the number of STRYPES specified below
issued by the Trust referred to above, hereby DIRECTS AND INSTRUCTS The Bank of
New York, as Administrator (the "Administrator") of the WBK STRYPES Trust (the
"Trust"), upon the Exchange Date or upon the occurrence of a Dissolution Event,
as described in the Trust Prospectus, dated September 30, 1997, to deliver any
ordinary shares, par value A$1.00 per share, of Westpac Banking Corporation (the
"Bank Shares") to which the undersigned is entitled pursuant to said STRYPES, to
the depositary (the "Depositary") for American Depositary Shares evidencing such
Bank Shares ("ADSs") and to direct the Depositary on the behalf of the
undersigned to register the ADSs as set forth below.
We acknowledge and agree that (i) in the event that the Depositary does not
accept the Bank Shares for deposit, the Administrator will deliver the Bank
Shares to or at the instructions of the undersigned and (ii), following the
delivery of the Bank Shares to the Depositary with the instructions as described
above, you shall have no further liability for the undersigned as owner of the
STRYPES and the undersigned shall cease to be the beneficial owner of the Trust
assets.](1)
[The undersigned, being the owner of the number of STRYPES specified below
issued by the Trust referred to above, hereby REVOKES the previous instructions
to The Bank of New York regarding delivery of any ordinary shares, par value
A$1.00 per share, of Westpac Banking Corporation (the "Bank Shares") relating to
said STRYPES in the form of American Depositary Shares and requests that such
Bank shares be delivered as set forth below.](2)
Very truly yours,
______________________________________
Name of Transferee:
Transferee's DTC Participant: ________
By: __________________________________
Date: ________________________________
Number of STRYPES owned: _____________
- ------------------------
- -SM- Service mark of Merrill Lynch & Co., Inc.
(1) Strike out if this is a revocation letter.
(2) Strike out if this is a request letter.
A-1
<PAGE>
Please register the [ADSs](1) [Bank Ordinary Shares](2) as follows:
Name: ________________________________
Address: _____________________________
Taxpayer ID Number: __________________
Notice: Please keep a copy of this for your records.
- ------------------------
(1) Strike out if this is a revocation letter.
(2) Strike out if this is a request letter.
A-2
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE TRUST OR THE UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER
THAN THOSE SPECIFICALLY OFFERED HEREBY, OR OF ANY SECURITIES OFFERED HEREBY, IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN
THE AFFAIRS OF THE TRUST SINCE THE DATE HEREOF OR SINCE THE DATES AS OF WHICH
INFORMATION IS SET FORTH HEREIN. IN THE EVENT THAT ANY SUCH CHANGE SHALL OCCUR
DURING THE PERIOD IN WHICH APPLICABLE LAW REQUIRES DELIVERY OF THIS PROSPECTUS,
THIS PROSPECTUS WILL BE AMENDED OR SUPPLEMENTED ACCORDINGLY.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 5
Fee Table................................................................. 14
The Trust................................................................. 15
Use of Proceeds........................................................... 15
Investment Objective and Policies......................................... 15
Investment Restrictions................................................... 30
Risk Factors.............................................................. 31
Description of the STRYPES................................................ 38
Trustees.................................................................. 40
Management Arrangements................................................... 41
Dividends and Distributions............................................... 42
Net Asset Value........................................................... 43
Certain Tax Considerations................................................ 43
Underwriting.............................................................. 51
Legal Matters............................................................. 52
Experts................................................................... 52
Additional Information.................................................... 52
Independent Auditors' Report.............................................. 53
Statement of Assets,
Liabilities and Capital................................................. 54
Index of Defined Terms.................................................... 55
Form of ADS Request/Revocation Letter..................................... A-1
</TABLE>
------------------------
UNTIL OCTOBER 25, 1997 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING), ALL
DEALERS EFFECTING TRANSACTIONS IN THE STRYPES, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY
REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
29,000,000 STRYPES-SM-
WBK STRYPES TRUST
(EXCHANGEABLE FOR ORDINARY SHARES OF
WESTPAC BANKING CORPORATION)
---------------------
P R O S P E C T U S
---------------------
MERRILL LYNCH & CO.
SEPTEMBER 30, 1997
-SM-Service mark of Merrill Lynch & Co., Inc.
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