<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 13, 1998
SECURITIES ACT FILE NO. 333-65849
INVESTMENT COMPANY ACT FILE NO. 811-09069
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM N-2
[X] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X]
[_] PRE-EFFECTIVE AMENDMENT NO. 2
POST-EFFECTIVE AMENDMENT NO.
AND/OR
[X] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X]
AMENDMENT NO. 2
(CHECK APPROPRIATE BOX OR BOXES)
---------------
ANZ EXCHANGEABLE PREFERRED TRUST II
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
---------------
C/O PUGLISI & ASSOCIATES
850 LIBRARY AVENUE
SUITE 204
NEWARK, DELAWARE 19715
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
---------------
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (302) 738-6680
---------------
RL&F SERVICE CORP.
ONE RODNEY SQUARE
10TH FLOOR
10TH AND KING STREETS
WILMINGTON, DELAWARE 19801
(NAME AND ADDRESS OF AGENT FOR SERVICE)
---------------
COPY TO:
CRAIG E. CHAPMAN, ESQ.
BROWN & WOOD LLP
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048-0557
---------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of this Registration Statement.
If any securities being registered on this form will be offered on a delayed
or continuous basis in reliance on Rule 415 under the Securities Act of 1933,
as amended, other than securities offered in connection with a dividend
reinvestment plan, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<TABLE>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES BEING OFFERING PRICE AGGREGATE REGISTRATION
BEING REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) FEE(3)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TrUEPrS representing shares of
beneficial interest................. 16,100,000 Shares $25.00 $402,500,000 $111,912
- ------------------------------------------------------------------------------------------------------
</TABLE>
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(1) Includes an aggregate of 2,100,000 TrUEPrS that (i) may be issued in
connection with the exercise of an over-allotment option and (ii) were
subscribed for and purchased by an affiliate of Merrill Lynch, Pierce,
Fenner & Smith Incorporated in connection with the formation of ANZ
Exchangeable Preferred Trust II.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Includes $63,957 previously paid. Payment of $47,955 was transmitted to
the designated lockbox at Mellon Bank in Pittsburgh, PA. in connection
with the filing of Pre-Effective Amendment No. 2.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE SHEET*
<TABLE>
<CAPTION>
ITEM NUMBER IN FORM N-2 CAPTION IN PROSPECTUS
----------------------- ---------------------
PART A--INFORMATION REQUIRED IN A PROSPECTUS
<C> <S> <C>
1. Outside Front Cover.............. Front Cover Page
2. Inside Front and Outside Back
Cover Page...................... Front Cover Page; Underwriting
3. Fee Table and Synopsis........... Prospectus Summary; Fee Table
4. Financial Highlights............. Not Applicable
5. Plan of Distribution............. Front Cover Page; Prospectus Summary;
Net Asset Value; Underwriting
6. Selling Shareholders............. Not Applicable
7. Use of Proceeds.................. Use of Proceeds and Collateral
Arrangements; Investment Objective and
Policies
8. General Description of the
Registrant...................... Front Cover Page; Prospectus Summary;
The Trust; Investment Objective and
Policies; Investment Restrictions;
Risk Factors; Dividends and
Distributions; Additional Information
9. Management....................... Trustees; Management Arrangements
10. Capital Stock, Long-Term Debt and
Other Securities................ Description of the TrUEPrS
11. Defaults and Arrears on Senior
Securities...................... Not Applicable
12. Legal Proceedings................ Not Applicable
13. Table of Contents of the
Statement of Additional
Information..................... Not Applicable
PART B--INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
14. Cover Page....................... Not Applicable
15. Table of Contents................ Not Applicable
16. General Information and History.. Not Applicable
17. Investment Objective and
Policies........................ Prospectus Summary; Investment
Objective and Policies; Investment
Restrictions
18. Management....................... Trustees; Management Arrangements
19. Control Persons and Principal
Holders of Securities........... Management Arrangements; Underwriting
20. Investment Advisory and Other
Services........................ Management Arrangements
21. Brokerage Allocation and Other
Practices....................... Investment Objective and Policies
22. Tax Status....................... Taxation
23. Financial Statements............. Experts; Independent Auditors' Report;
Statement of Assets and Liabilities
</TABLE>
PART C--OTHER INFORMATION
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
- --------
* Pursuant to the General Instructions to Form N-2, all information required to
be set forth in Part B: Statement of Additional Information has been included
in Part A: The Prospectus.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE +
+TRUST MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED +
+WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS +
+NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO +
+BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER 13, 1998
PROSPECTUS
TRUST UNITS EXCHANGEABLE FOR PREFERENCE SHARES SM
14,000,000 TRUEPRS SM
ANZ EXCHANGEABLE PREFERRED TRUST II
(EXCHANGEABLE FOR AMERICAN DEPOSITARY RECEIPTS REPRESENTING
ANZ PREFERENCE SHARES OR CASH)
----------
THE ISSUER:
. ANZ Exchangeable Preferred Trust II (the "Trust") is a Delaware business
trust. It will use the proceeds from the sale of the TrUEPrS to purchase and
hold % Mandatorily Redeemable Debt Securities due 2048 issued by
Aldobrandini (UK) Company. The Trust also will enter into a purchase contract
with Aldobrandini (Investments) Limited for the purchase of ADRs representing
ANZ Preference Shares.
WHAT YOU WILL RECEIVE BEFORE THE EXCHANGE DATE:
. On each Dividend Payment Date before the Exchange Date, if the Trust has
sufficient funds, the Trust will pay you a non-cumulative dividend
distribution at the rate of % per annum of the issue price of the TrUEPrS.
Accordingly, if the Trust has sufficient funds, on the first Dividend Payment
Date (January 15, 1999) the Trust will pay you $ per TrUEPrS and on each
subsequent Dividend Payment Date (January 15, April 15, July 15, and October
15 of each year) before the Exchange Date the Trust will pay you $ per
TrUEPrS.
WHAT YOU WILL RECEIVE ON THE EXCHANGE DATE:
. On the Exchange Date, for each TrUEPrS you own, the Trust will deliver to you
one ADR representing four ANZ Preference Shares or $25 in cash, depending on
the type of Exchange Event.
<TABLE>
<S> <C>
IF THE EXCHANGE EVENT IS: FOR EACH TRUEPRS YOU WILL RECEIVE:
(a) Anything other than a redemption One ADR representing four ANZ Prefer-
or mandatory repurchase (known as a ence Shares
"Buy-Back" in Australia) of the ANZ
Preference Shares for cash
(b) The redemption or Buy-Back of the Cash equal to $25 plus the accrued
ANZ Preference Shares for cash dividend distribution for the then
current quarterly dividend period
</TABLE>
. On and after the Exchange Date, the ANZ Preference Shares represented by the
ADRs will accrue non-cumulative dividends at the same rate as the dividend
distribution rate on the TrUEPrS. If such dividends are declared by the board
of directors of ANZ, they will be paid on the same dates as the Dividend
Payment Dates for the TrUEPrS.
. The TrUEPrS have been approved for listing on the New York Stock Exchange
under the symbol "ANJ Pr," subject to official notice of issuance. The Trust
expects that trading on the New York Stock Exchange will commence within 30
days after delivery of the TrUEPrS.
INVESTING IN THE TRUEPRS INVOLVES CERTAIN RISKS WHICH ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 10 OF THIS PROSPECTUS.
----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
----------
<TABLE>
<CAPTION>
PER TRUEPRS TOTAL
----------- ------------
<S> <C> <C>
Public offering price(1)............... $25.00 $350,000,000
Sales load............................. None(2) None(2)
Proceeds, before expenses, to Trust.... $25.00 $350,000,000
</TABLE>
(1) Purchasers will also be required to
pay accrued dividend distributions
from November , 1998, if
settlement occurs after that date.
(2) Because the proceeds of the sale of
the TrUEPrS will ultimately be
invested in the ANZ Preference
Shares, ANZ will pay the
underwriters $ per TrUEPrS (or
$ per TrUEPrS for sales of more
than 10,000 TrUEPrS to a single
purchaser).
The underwriters may also purchase up to an additional 2,096,000 TrUEPrS at
$25 per TrUEPrS, plus accrued dividends from November , 1998, within 30 days
from the date of this prospectus to cover over-allotments.
The Trust expects that the TrUEPrS will be ready for delivery in book-entry
form only through the facilities of The Depository Trust Company on or about
November , 1998.
----------
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY
----------
The date of this prospectus is November , 1998.
"TrUEPrS" and "Trust Units Exchangeable for Preference Shares" are service
marks owned by Merrill Lynch & Co., Inc.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary Information--Q&A................................................... 3
Fee Table.................................................................. 8
Structural Diagram......................................................... 9
Risk Factors............................................................... 10
The Trust.................................................................. 12
Use of Proceeds and Collateral Arrangements................................ 12
Investment Objective and Policies.......................................... 13
Investment Restrictions.................................................... 19
Description of the TrUEPrS................................................. 20
Trustees................................................................... 23
Management Arrangements.................................................... 23
Dividends and Distributions................................................ 25
Net Asset Value............................................................ 26
Taxation................................................................... 26
Underwriting............................................................... 31
Legal Matters.............................................................. 33
Experts.................................................................... 33
Additional Information..................................................... 33
Independent Auditors' Report............................................... 34
Statement of Assets and Liabilities........................................ 35
</TABLE>
Prospectus relating to American Depositary Receipts representing ANZ Preference
Shares
2
<PAGE>
SUMMARY INFORMATION--Q&A
This summary includes questions and answers that highlight selected
information from the prospectus to help you understand the TrUEPrS. However,
this summary may not contain all the information that may be important to you.
Certain terms used in this section are defined elsewhere in this prospectus.
You should carefully read this prospectus to fully understand the terms of the
TrUEPrS, as well as the tax and other considerations that are important to you
in making a decision about whether to invest in the TrUEPrS. You should pay
special attention to the "Risk Factors" section to determine whether an
investment in the TrUEPrS is appropriate for you.
WHAT ARE TRUEPRS?
TrUEPrS are Trust Units Exchangeable for Preference Shares. Each TrUEPrS
represents a proportionate share of beneficial interest in the assets of the
Trust. Each TrUEPrS will entitle the holder to receive, before the Exchange
Date, non-cumulative quarterly dividend distributions at the rate of $ per
TrUEPrS per quarter if the Trust has sufficient funds.
HOW MANY TRUEPRS ARE BEING OFFERED?
The Trust is offering 14,000,000 TrUEPrS at a price of $25 per TrUEPrS.
The underwriters may also purchase up to an additional 2,096,000 TrUEPrS at the
price of $25 per TrUEPrS, plus accrued dividends from November , 1998, within
30 days of the date of this prospectus in order to cover over-allotments, if
any. You should refer to the section in this prospectus called "Underwriting."
WHO IS THE TRUST?
ANZ Exchangeable Preferred Trust II is a recently created Delaware
business trust. The Trust will be registered as a non-diversified closed-end
management investment company under the Investment Company Act of 1940. The
Trust will dissolve as soon as practicable after the Trust distributes ADRs or
cash to you upon the occurrence of an Exchange Event. Please review the
sections in this prospectus called "The Trust," "Investment Objective and
Policies--Trust Dissolution" and "Risk Factors--Limited Term" for more
information.
WHO IS ANZ?
ANZ is Australia and New Zealand Banking Group Limited, an Australian
bank. For more information about ANZ and the ANZ Preference Shares represented
by ADRs that you may receive due to the occurrence of an Exchange Event, see
the prospectus of ANZ. The Trust has attached the prospectus of ANZ to this
prospectus for your convenience only. The prospectus of ANZ is not a part of
this prospectus and is not incorporated by reference in this prospectus.
WHAT IS THE TRUST'S INVESTMENT OBJECTIVE?
The Trust's investment objective is to distribute to you:
. Before the Exchange Date, non-cumulative quarterly cash dividend
distributions from the interest the Trust receives on the Debt Securities.
. On the Exchange Date, ADRs or cash depending on the type of Exchange Event.
The Exchange Events that may occur are described below and in the section
in this prospectus called "Investment Objectives and Policies--Exchange Event."
WHAT ARE THE ASSETS OF THE TRUST?
The assets of the Trust will be (i) $350,100,000 of Debt Securities
issued by the U.K. Company (or $402,500,000 if the underwriters exercise their
over-allotment option in full) and (ii) the ADRs Purchase Contract. See
"Investment Objective and Policies--Trust Assets."
WHAT IS THE ADRS PURCHASE CONTRACT?
The ADRs Purchase Contract is an agreement entered into between the Trust
and the Jersey Subsidiary for the purchase by the Trust of the ADRs on the
Exchange Date. Because the Trust will not own the ADRs before the Exchange
Date, if the Trust is required to deliver ADRs to you upon the occurrence of an
Exchange Event, the Trust will purchase the ADRs from the Jersey Subsidiary
pursuant to the ADRs Purchase Contract. See "Investment Objective and
Policies--Trust Assets."
3
<PAGE>
WHEN WILL YOU RECEIVE YOUR QUARTERLY DIVIDEND DISTRIBUTIONS?
On each Dividend Payment Date before the Exchange Date, if the Trust has
sufficient funds, you will receive a non-cumulative quarterly cash dividend
distribution from the Trust at the rate of % of the issue price of the
TrUEPrS per annum ($ per TrUEPrS per annum or $ per TrUEPrS per
quarter). Before the Exchange Date, the Trust will make dividend distributions
to you on each Dividend Payment Date (January 15, April 15, July 15 and October
15) if you are registered on the register of the Trust as of the preceding
Record Date (January 1, April 1, July 1 and October 1). If the Dividend Payment
Date is not a Business Day, you will be paid on the following Business Day. You
will receive the first dividend distribution in the amount of $ per TrUEPrS
for the period from November , 1998 until January 14, 1999 on January 15,
1999 if you are registered on the Trust's register as of January 1, 1999.
WHAT WILL YOU RECEIVE ON THE EXCHANGE DATE?
For each TrUEPrS you own, you will receive one ADR representing four ANZ
Preference Shares or $25 in cash, depending on the type of Exchange Event.
<TABLE>
<CAPTION>
IF THE EXCHANGE
EVENT IS: YOU WILL RECEIVE:
<C> <S>
(a) Anything other One ADR
than a redemption representing four
or Buy-Back of the ANZ Preference
ANZ Preference Shares
Shares for cash
(b) The redemption Cash equal to $25
or Buy-Back of the plus the accrued
ANZ Preference dividend
Shares for cash distribution for
the then current
quarterly dividend
period
</TABLE>
If ADRs are distributed, you will become the owner of the ADRs as of the
opening of business on the Exchange Date. The Trust will deliver the ADRs to
you through the facilities of The Depository Trust Company as soon as
practicable on or after the Exchange Date.
WHAT EVENTS WILL OCCUR ON THE ISSUE DATE OF THE TRUEPRS?
The Trust will use the proceeds from the sale of the TrUEPrS, including
the sale of 4,000 TrUEPrS to an affiliate of Merrill Lynch, Pierce, Fenner &
Smith Incorporated to satisfy the requirements of the Investment Company Act of
1940, to purchase from the U.K. Company Debt Securities in an amount equal to
such proceeds. The Debt Securities accrue interest at the rate per annum of
%. The Interest Payment Dates for the Debt Securities are the same as the
Dividend Payment Dates for the TrUEPrS. The U.K. Company will use all the
proceeds from the sale of the Debt Securities to purchase the Jersey Preference
Shares issued by the Jersey Subsidiary. The Jersey Subsidiary will use all the
proceeds from the sale of the Jersey Preference Shares to pay the subscription
price to ANZ for the ANZ Preference Shares represented by the ADRs to be issued
to the Jersey Subsidiary.
ANZ will use all the proceeds it receives from the Jersey Subsidiary to
make a capital contribution to the Distribution Trust. The Distribution Trust
will use ANZ's capital contribution to make one or more ANZ Loans to one or
more ANZ Borrowers. See the sections in this prospectus called "Use of Proceeds
and Collateral Arrangements" and "Structural Diagram."
WHAT SECURITY ARRANGEMENTS APPLY TO THE TRUST'S ASSETS?
Under the ADRs Security and Pledge Agreement among the Trust, the U.K.
Company, the Jersey Subsidiary and the Collateral Agent, the Jersey Subsidiary
will pledge the ADRs to the holder of the Jersey Preference Shares (initially
the U.K. Company) to secure the Jersey Subsidiary's redemption obligations
under the Jersey Preference Shares and to the Trust to secure the Jersey
Subsidiary's obligation to deliver the ADRs under the ADRs Purchase Contract.
The U.K. Company will also assign its security interest in the ADRs to the
Trust to secure the U.K. Company's redemption obligations under the Debt
Securities.
Under the Jersey Preference Shares Security and Pledge Agreement among
the Trust, the U.K. Company and the Collateral Agent, the U.K. Company, as
holder of the Jersey Preference Shares, will pledge the Jersey Preference
Shares to the Trust to secure the U.K. Company's redemption obligations under
the Debt Securities.
4
<PAGE>
HOW WILL THE TRUST PAY FOR DIVIDEND DISTRIBUTIONS ON THE TRUEPRS?
The Trust will pay dividend distributions on the TrUEPrS from the interest
payments it receives on the Debt Securities. The U.K. Company will pay interest
on the Debt Securities if it receives sufficient funds from the Distribution
Trust. The U.K. Company's right to receive payments from the Distribution Trust
will not represent an absolute ownership interest in the Distribution Trust or
its income. The U.K. Company only has a right to receive payments if the
Distribution Trust actually distributes a payment to the U.K. Company. If the
Distribution Trust is not prohibited from making any payments as described in
the section in this prospectus called "Investment Objectives and Policies--
Intervening Vehicles--Distribution Trust," the Distribution Trust will pay the
U.K. Company the interest payments it receives on each ANZ Loan. If the
Distribution Trust does not make any such payment for any reason, the U.K
Company will have no right to receive such payments and will have insufficient
funds to pay interest on the Debt Securities and an Exchange Event will occur.
WHAT ARE THE EXCHANGE EVENTS?
The first of the following dates or events to occur will constitute an
"Exchange Event."
(i) January 15, 2048 or the date of any earlier redemption or Buy-Back
of the ANZ Preference Shares;
(ii) any date ANZ selects in its absolute discretion;
(iii) the Trust fails to receive in full the interest due on the Debt
Securities on any Dividend Payment Date within three Business Days after
such Dividend Payment Date (without any deductions or withholdings for
taxes, duties or other charges);
(iv) ANZ's Tier 1 Capital Ratio is below 4% or ANZ's Total Capital
Adequacy Ratio is below 8% (or, in either case, any lower percentage
prescribed for ANZ by the Australian Prudential Regulatory Authority at the
time) and ANZ fails to increase such ratio to at least 4% or 8% (or such
lower percentage), as the case may be, within 90 days;
(v) subject to certain exceptions, there is any change in:
(a) the legal ownership of the securities issued by
(b) the charter or other governing documents of, or
(c) the business purpose of
the U.K. Company, the Jersey Holding Company, the Jersey Charitable
Trust or the Jersey Subsidiary;
(vi) there is any change in the business purpose of the Distribution
Trust or ANZ ceases to own directly or indirectly all the common securities
of the Distribution Trust;
(vii) any ANZ Borrower ceases to be ANZ or one of its wholly owned
subsidiaries;
(viii) certain events of bankruptcy occur with respect to ANZ, the
U.K. Company, the Jersey Holding Company, the Jersey Charitable Trust, the
Jersey Subsidiary, the Distribution Trust or any ANZ Borrower;
(ix) the Trust dissolves; and
(x) the Collateral Agent fails, at any time, to have a valid first,
perfected and enforceable security interest in, and lien on, the Jersey
Preference Shares and the ADRs (and any proceeds from the redemption of
such securities) and such failure is not remedied on or before 10 Business
Days after the Collateral Agent gives written notice of such failure to the
U.K. Company or the Jersey Subsidiary.
For a more detailed description of each of the Exchange Events and the
corresponding Exchange Date, see the section in this prospectus called
"Investment Objective and Policies--Exchange Event."
WILL YOU CONTINUE TO RECEIVE DIVIDEND DISTRIBUTIONS ON THE TRUEPRS ON AND AFTER
THE EXCHANGE DATE?
No. The Trust will not pay you dividend distributions on the TrUEPrS on
and after the Exchange Date.
5
<PAGE>
. If the Exchange Event is an event other than a redemption or Buy-Back of the
ANZ Preference Shares for cash, the Trust will not pay you dividend
distributions on the TrUEPrS on the Exchange Date (even if the Exchange Date
is a Dividend Payment Date). Instead, dividends on the ANZ Preference Shares
will begin to accrue from and including the Dividend Payment Date
immediately preceding the Exchange Date.
. If the Exchange Event is the redemption or Buy-Back of the ANZ Preference
Shares for cash, on the Exchange Date, the Trust will pay you accrued
dividend distributions for the period from and including the Dividend
Payment Date immediately preceding the Exchange Date to but excluding the
Exchange Date.
WHAT ABOUT U.S. TAXES?
The Trust will be classified as a grantor trust for United States Federal
income tax purposes. The Debt Securities held by the Trust will be treated as
equity in ANZ. Accordingly, you will be treated for United States Federal
income tax purposes as owning equity of ANZ and will be required to include in
income, as dividends, your pro rata share of the gross amount of the interest
paid on the Debt Securities to the extent of the current and accumulated
earnings and profits (as determined for United States Federal income tax
purposes) of ANZ.
Generally, your income will not include any ADRs you receive upon the
occurrence of an Exchange Event. However, your income will include any cash you
may receive if the Exchange Event is the redemption or Buy-Back of the ANZ
Preference Shares for cash. In that case, you would be required to recognize
gain or loss for the TrUEPrS. Please review the section in this prospectus
called "Taxation--Certain United States Federal Income Tax Considerations."
WHAT ABOUT AUSTRALIAN TAXES?
The Trust will not be treated as a resident of Australia for Australian
income tax purposes. Because it will not receive Australian source income, the
Trust will not be subject to Australian tax on income earned. If you are a non-
Australian resident holder of TrUEPrS, you will not be subject to Australian
tax whether by withholding or otherwise for the Trust's quarterly dividend
distributions.
There should be no Australian tax consequences to the Trust of the
distribution of the ADRs to you, as a holder of TrUEPrS, when an Exchange Event
occurs. The sale of TrUEPrS or the ANZ Preference Shares represented by the
ADRs may generate assessable income to you if you are a U.S. holder. The sale
of TrUEPrS or ADRs by a U.S. holder may be subject to Australian capital gains
tax where a 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 preceding such sale held shares or interests in shares
representing 10% or more in value of the issued capital of an Australian listed
company, such as ANZ.
Subject to certain conditions, the terms of the ANZ Preference Shares
provide for holders to be grossed-up for Australian withholding tax on payments
paid on the ANZ Preference Shares being dividends or amounts deemed to be
dividends for Australian tax purposes. Please review the section in this
prospectus called "Taxation--Certain Australian Tax Considerations."
DO YOU HAVE VOTING RIGHTS?
You are entitled to one vote for each TrUEPrS you own. Except as
described in the section in this prospectus called "Description of TrUEPrS--
Voting Rights," as a holder of TrUEPrS, you will not be entitled to any voting
rights for the ANZ Preference Shares. However, while you are a TrUEPrS holder,
the Jersey Subsidiary, as holder of the ADRs, will, or will cause the
Collateral Agent to, direct the ADR depositary to vote ANZ Preference Shares
represented by the ADRs as directed by the holders of the TrUEPrS. You should
review the section in this prospectus called "Description of TrUEPrS--Voting
Rights."
WILL THE TRUEPRS BE LISTED ON A STOCK EXCHANGE?
The TrUEPrS have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance. The Trust expects that
trading on the New York Stock Exchange will commence within 30 days after
delivery of the TrUEPrS. You should be aware that the listing of
6
<PAGE>
the TrUEPrS on the New York Stock Exchange will not necessarily ensure that a
liquid trading market will be available for the TrUEPrS. You should review the
section in this prospectus called "Risk Factors--Uncertain Trading Market."
WHAT ARE THE RISKS ASSOCIATED WITH YOUR INVESTMENT?
The material risks associated with the TrUEPrS are described in the "Risk
Factors" section beginning on page 10 of this prospectus.
HOW WILL THE TRUST BE MANAGED?
The Trust will be internally managed and will not have an investment
adviser, which means that there will be no outside manager or adviser to manage
the Trust's portfolio. In addition, the Trust's portfolio will not be actively
managed; the assets of the Trust will not be traded but will be held as
required by the agreement that governs the Trust. The administration of the
Trust will be overseen by the Trustees. The Bank of New York will act as trust
administrator, custodian for the Trust's assets and paying agent, transfer
agent and registrar for the TrUEPrS. Except as mentioned above and except for
The Bank of New York's role as collateral agent and securities intermediary
under the ADRs Security and Pledge Agreement and the Jersey Preference Shares
Security and Pledge Agreement, as paying agent and transfer agent for the Debt
Securities and the ANZ Preference Shares and as ADR depositary, The Bank of New
York has no affiliation with, and is not engaged in any transaction with, the
Trust. For their services, the Jersey Holding Company will pay the fees of the
administrator, the custodian and the paying agent. Please see the section in
this prospectus called "Management Arrangements" for a more detailed
discussion.
7
<PAGE>
FEE TABLE
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load (as a percentage of offering price)........... 0%(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>
1 YEAR 3 YEARS
EXAMPLE ------ -------
<S> <C> <C>
An investor would pay the following expenses on a $1,000
investment, including the maximum sales load of $0 and assuming
(1) no annual expenses and (2) a 5% annual return throughout
the periods.................................................... $ 0 $ 0
</TABLE>
- -------
(a) There is no sales load. Because the proceeds of the sale of the TrUEPrS
will ultimately be invested in the ANZ Preference Shares, ANZ has agreed
to pay the underwriters' compensation. See the cover page of this
prospectus and "Underwriting."
(b) See "Management Arrangements." The Trust will be internally managed;
consequently, the Trust will not pay any separate investment advisory fee.
The Bank of New York will act as the Administrator of the Trust.
(c) The Trust will pay the organization costs in the amount of $32,000 and the
costs associated with the initial registration and the offering of the
TrUEPrS, estimated to be approximately $518,000. The Trust will pay these
costs out of the facility fee to be paid on the issue date of the TrUEPrS
to the Trust by the U.K. Company in connection with the investment by the
Trust in the Debt Securities. The Jersey Holding Company will pay the
ongoing administrative and other expenses of the Trust pursuant to the
Trust Expense Agreement between the Jersey Holding Company and The Bank of
New York. Subject to the satisfaction of certain conditions, expenses of
the Trust not paid by the Trust's arrangements with the Jersey Holding
Company under the Trust Expense Agreement will be paid by the ANZ
Affiliate pursuant to the Expense and Indemnity Agreement. See "Management
Arrangements--Estimated Expenses." Absent such arrangements, the Trust's
"Other Expenses" and "Total Annual Expenses" are estimated to initially be
$248,000 in the aggregate or 0.071% of the Trust's net assets.
This table is intended to assist you in understanding the costs and
expenses that a holder of TrUEPrS will bear directly or indirectly. The
example utilizes a 5% annual rate of return, which is required 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.
8
<PAGE>
[STRUCTURAL DIAGRAM APPEARS HERE]
[Diagram or Transaction Structure Illustrating transaction parties, intervening
vehicles and investment and payment directions]
9
<PAGE>
RISK FACTORS
Your investment in the TrUEPrS will involve certain risks. You should
carefully consider the following discussion of risks before deciding whether an
investment in the TrUEPrS is suitable for you.
NO ACTIVE TRUST PORTFOLIO MANAGEMENT
The Trust will not be managed like a typical closed-end investment
company. The Trust has a fundamental policy (a) to invest 100% of its portfolio
in the Debt Securities issued by the U.K. Company and any distributions
thereon, and not to dispose of the Debt Securities during the term of the
Trust, and (b) to enter into the ADRs Purchase Contract and not to dispose of
the ADRs Purchase Contract during the term of the Trust. The Debt Securities
will be redeemed on the Exchange Date.
NON-DIVERSIFIED PORTFOLIO
Before the Exchange Date, the Trust's assets will consist of (a) the Debt
Securities and distributions thereon and (b) the ADRs Purchase Contract. 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.
ABSENCE OF TRADING HISTORY
The TrUEPrS have no trading history and it is not possible to predict how
they will trade in the secondary market. The trading price of the TrUEPrS may
vary considerably before an Exchange Event. This is due to factors such as
complex and interrelated political, economic, financial and other factors that
can affect the capital markets generally, the stock exchanges or quotation
systems on which ANZ's shares are traded and the market segment of which ANZ is
a part and fluctuations in interest rates and rates of exchange between the
Australian dollar and the U.S. dollar. These are factors that are difficult to
predict and beyond the Trust's control. Please review the accompanying
prospectus of ANZ.
POSSIBILITY OF THE TRUEPRS TRADING AT A DISCOUNT FROM NET ASSET VALUE
The Trust is a newly organized closed-end investment company with no
previous operating history. Shares of closed-end investment companies
frequently trade at a price that is lower than their net asset value. This is a
risk separate and distinct from the risk that the Trust's net asset value will
decrease. The Trust cannot predict whether the TrUEPrS will trade at, below or
above their net asset value. The risk of purchasing investments that might
trade at a discount is greater for investors who want to sell their investments
in a relatively short period of time after completion of the Trust's initial
public offering. 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 determined over time. The Trust cannot
redeem the TrUEPrS.
UNCERTAIN TRADING MARKET
The TrUEPrS are a new issue of securities and, accordingly, have no
established trading market. You cannot assume that a trading market will
develop. If such a trading market does develop, there can be no assurance that
there will be liquidity in the trading market. If the trading market for the
TrUEPrS is limited, there may be a limited number of buyers when you decide to
sell your TrUEPrS if you do not want to hold your investment until an Exchange
Event occurs. This may affect the price you receive. Although the underwriters
have no obligation to make a market in the TrUEPrS, they have advised the Trust
that they intend to make a market in the TrUEPrS. The underwriters may cease
these market making activities at any time.
The TrUEPrS have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance. The Trust expects that
trading on the New York Stock Exchange will commence within 30 days after
delivery of the TrUEPrS. In the event of a delisting or suspension of trading
on such exchange, the Trust will apply for listing of the TrUEPrS on another
national securities exchange or for quotation on another trading market. If the
TrUEPrS are not listed or traded on any securities exchange or trading market,
or if trading of the TrUEPrS is suspended, pricing information for the TrUEPrS
may be more difficult to obtain. The price and liquidity of the TrUEPrS may
also be adversely affected.
LIMITED TERM OF THE TRUST
When an Exchange Event occurs, the term of the Trust will expire as soon
as possible after the distribution to you of ADRs or cash.
10
<PAGE>
LIMITED STOCKHOLDER RIGHTS
Except as described in the section in this prospectus called "Description
of TrUEPrS--Voting Rights," you, as a holder of the TrUEPrS, will not have any
rights with respect to the ADRs or the ANZ Preference Shares (including rights
to receive any dividends or other distributions on them) until the Trust
delivers the ADRs to you upon the occurrence of an Exchange Event (unless the
Exchange Event is the redemption or Buy-Back of the ANZ Preference Shares for
cash). In addition, the Trust, as the holder of the Debt Securities, has no
voting rights in relation to the U.K. Company.
YEAR 2000 NONCOMPLIANCE
Many computer systems were designed using only two digits to designate
years. These systems may not be able to distinguish the Year 2000 from the Year
1900 (commonly known as the "Year 2000 Problem"). Like other investment
companies and financial and business organizations, the Trust could be
adversely affected if the computer systems used by the Trust or the Trust's
service providers do not properly address this problem prior to January 1,
2000. The Trust has sought assurances from its service providers that they are
taking all necessary steps to ensure that their computer systems will
accurately reflect the Year 2000, and the Trust will continue to monitor the
situation. At this time, however, the Trust cannot assure you that its service
providers have anticipated every step necessary to avoid any adverse effect on
the Trust caused by the Year 2000 Problem.
11
<PAGE>
THE TRUST
ANZ Exchangeable Preferred Trust II (the "Trust") is a newly-created
Delaware business trust and will be registered as a closed-end management
investment company under the U.S. Investment Company Act of 1940, as amended
(the "Investment Company Act"). The Trust was formed on October 13, 1998
pursuant to a Certificate of Trust as filed with the Secretary of State of the
State of Delaware on October 13, 1998 and as restated and filed on November 5,
1998 and a Trust Agreement dated as of October 13, 1998, which was amended and
restated (as amended and restated, the "Declaration of Trust"). The term of the
Trust will expire as soon as possible after the exchange of the TrUEPrS for
ADRs or cash, as the case may be, upon the occurrence of an Exchange Event. 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 AND COLLATERAL ARRANGEMENTS
The proceeds of the offering of the TrUEPrS (the "Offering") (without
giving effect to the expenses of the Offering payable by the Trust) and the
4,000 TrUEPrS (the "Initial TrUEPrS") issued by the Trust to ML IBK Positions,
Inc. will be $350,100,000 (or $402,500,000 if the Underwriters' (as defined
herein) over-allotment option is exercised in full). On the Issue Date (as
defined herein), the proceeds of the Offering and the proceeds from the sale of
the Initial TrUEPrS will be used to purchase $350,100,000 aggregate principal
amount (or $402,500,000 aggregate principal amount if the Underwriters' over-
allotment option is exercised in full) of % Mandatorily Redeemable Debt
Securities due 2048 (the "Debt Securities") from Aldobrandini (UK) Company, a
special purpose unlimited company incorporated under the laws of England and
Wales and domiciled in the United Kingdom (the "U.K. Company"). The Trust, as
the holder of the Debt Securities, will be entitled to receive interest thereon
at the rate per annum of %, payable quarterly in arrears on each Dividend
Payment Date (each, an "Interest Payment Date"). The Debt Securities will be
listed on the Luxembourg Stock Exchange and, unless redeemed on an earlier
Exchange Date (as defined herein), will be redeemed on January 15, 2048. The
Debt Securities will be issued only in bearer form and will be denominated and
pay interest in U.S. dollars. See "Investment Objective and Policies--Trust
Assets."
The following transactions will take place on the Issue Date. Reference
is made to page 9 for a diagram of the transactions.
The U.K. Company will use the proceeds from the sale of the Debt
Securities to purchase at a price equal to their liquidation preference fully
paid, non-dividend paying preference shares, liquidation preference $25 per
share (the "Jersey Preference Shares"), issued by Aldobrandini (Investments)
Limited, a company incorporated with limited liability under the laws of, and
domiciled in, Jersey, the Channel Islands (the "Jersey Subsidiary"). The Jersey
Subsidiary will use the proceeds from the sale of the Jersey Preference Shares
to make a payment to Australia and New Zealand Banking Group Limited ("ANZ") in
consideration for the issuance by the ADR (as defined herein) depositary to the
Jersey Subsidiary of American Depositary Receipts ("ADRs"), each representing
four fully paid non-cumulative 1998 Preference Shares (Series 2), liquidation
preference $6.25 per share (the "ANZ Preference Shares"), of ANZ, at a price
per ADR equal to $25 (i.e., the aggregate liquidation preference of the four
ANZ Preference Shares represented thereby). No dividends will accrue or be paid
on the ANZ Preference Shares represented by the ADRs unless an Exchange Event
(other than a redemption or mandatory repurchase (such mandatory repurchase
being a "Buy-Back") of the ANZ Preference Shares) occurs. On and after such an
Exchange Date, non-cumulative dividends will be payable, if and when declared
by the board of directors of ANZ out of profits legally available therefor, in
U.S. dollars in an amount equal to $ per ANZ Preference Share per annum,
payable quarterly in arrears in an amount equal to $ per ANZ Preference Share
on each Dividend Payment Date (as defined herein) to holders of record as of
the immediately preceding Record Date (as defined herein).
ANZ will use the proceeds from the issue of the ANZ Preference Shares to
make a capital contribution to a business trust established under the laws of
the State of Delaware (the "Distribution Trust"). The
12
<PAGE>
Distribution Trust will use ANZ's capital contribution to make one or more
loans (each, an "ANZ Loan") to ANZ and/or one or more wholly-owned subsidiaries
or branches of ANZ (each, an "ANZ Borrower").
The ADRs will be deposited with The Bank of New York, as the collateral
agent (the "Collateral Agent"), pursuant to a security and pledge agreement
(the "ADRs Security and Pledge Agreement") to be entered into among the Trust,
the U.K. Company, the Jersey Subsidiary and the Collateral Agent. Pursuant to
the terms of the ADRs Security and Pledge Agreement, the Jersey Subsidiary will
irrevocably and unconditionally deposit the ADRs with the Collateral Agent and
(i) the Jersey Subsidiary will irrevocably and unconditionally pledge its
interest in the ADRs to the holder of the Jersey Preference Shares (initially
the U.K. Company) to secure its redemption obligations under the Jersey
Preference Shares and to the Trust to secure its obligation to deliver ADRs
under the ADRs Purchase Contract (as defined herein), (ii) the U.K. Company,
with the consent of the Jersey Subsidiary, will irrevocably and unconditionally
assign and hypothecate to the Trust its interest in such pledge to secure its
redemption obligations under the Debt Securities and (iii) the Jersey
Subsidiary and the U.K. Company will irrevocably and unconditionally direct the
Collateral Agent, upon the occurrence of an Exchange Event (other than a
redemption or Buy-Back of the ANZ Preference Shares for cash), to transfer the
ADRs to the Trust. Pursuant to a separate security and pledge agreement (the
"Jersey Preference Shares Security and Pledge Agreement" and, together with the
ADRs Security and Pledge Agreement, the "Security and Pledge Agreements") to be
entered into among the Trust, the U.K. Company and the Collateral Agent, the
U.K. Company will irrevocably and unconditionally deposit the Jersey Preference
Shares with the Collateral Agent and pledge the Jersey Preference Shares to
secure its redemption obligations to the Trust under the Debt Securities. Prior
to the occurrence of an Exchange Event, ownership of the Jersey Preference
Shares and the ADRs will remain with the U.K. Company and the Jersey
Subsidiary, respectively, although pursuant to the ADRs Security and Pledge
Agreement, the Jersey Subsidiary will agree to, or will cause the Collateral
Agent to, direct the ADR depositary to vote the ANZ Preference Shares
represented by the ADRs as directed by the holders of the TrUEPrS. Each TrUEPrS
will entitle the holder to direct the exercise of the voting rights attaching
to one ADR and the four ANZ Preference Shares represented thereby.
The Trust will also enter into the ADRs Purchase Contract between the
Trust and the Jersey Subsidiary (the "ADRs Purchase Contract") pursuant to
which the Jersey Subsidiary will deliver the ADRs to the Trust for distribution
to the holders of TrUEPrS after the occurrence of an Exchange Event (other than
a redemption or Buy-Back of the ANZ Preference Shares for cash) and the
redemption of the Debt Securities and the Jersey Preference Shares.
The Debt Securities, the Jersey Preference Shares (if applicable), the
ADRs Purchase Contract and (if applicable) the ADRs to be purchased pursuant to
the terms of the ADRs Purchase Contract will be held by the Custodian for the
Trust.
INVESTMENT OBJECTIVE AND POLICIES
GENERAL
The Trust will invest the proceeds of the Offering in the Debt Securities
issued by the U.K. Company. The Trust's investment objective is to distribute
to the holders of TrUEPrS (a) prior to an Exchange Event, pro rata based on the
number of TrUEPrS outstanding the interest the Trust receives on the Debt
Securities from time to time, and (b) upon the occurrence of an Exchange Event,
(i) if the Exchange Event is anything other than a redemption or Buy-Back of
the ANZ Preference Shares for cash, ADRs evidencing, for each TrUEPrS, four ANZ
Preference Shares, and (ii) if the Exchange Event is a redemption or Buy-Back
of the ANZ Preference Shares for cash, $25 per TrUEPrS plus an amount equal to
the accrued but unpaid interest on each $25 principal amount of the Debt
Securities from and including the Interest Payment Date immediately preceding
the Exchange Date to but excluding such Exchange Date. Upon the occurrence of
an Exchange Event, the ANZ Preference Shares will accrue non-cumulative
dividends at the rate of $ per share per annum, payable quarterly in arrears
in an amount equal to $ per share on each Dividend Payment Date to holders of
record as of the immediately preceding Record Date. Upon the occurrence of an
Exchange Event, the Administrator will notify The Depository Trust Company (the
"Depository") and publish a notice in
13
<PAGE>
The Wall Street Journal or another daily newspaper of national circulation
stating whether ADRs or cash will be delivered in exchange for the TrUEPrS.
The Trust has adopted a fundamental policy as required by the Declaration
of Trust (a) to invest 100% of its portfolio in the Debt Securities, and any
distributions thereon, and not to dispose of the Debt Securities during the
term of the Trust other than in connection with a mandatory redemption thereof
as a result of an Exchange Event and (b) to enter into the ADRs Purchase
Contract and not to dispose of the ADRs Purchase Contract during the term of
the Trust. The foregoing fundamental policy of the Trust may not be changed
without the vote of 100% of the holders of the TrUEPrS.
TRUST ASSETS
Prior to an Exchange Date, the Trust's assets will consist of (a)
$350,100,000 aggregate principal amount of Debt Securities ($402,500,000
aggregate principal amount of Debt Securities if the Underwriters' over-
allotment option is exercised in full), and any distributions thereon, and (b)
the ADRs Purchase Contract.
As described above under "--General," upon the occurrence of an Exchange
Event, each TrUEPrS will be exchanged for either (i) one ADR or (ii) $25 in
cash plus the accrued dividend distribution thereon for the current quarterly
dividend period. The procedure by which the Trust will obtain the ADRs or cash
to be distributed to the holders of TrUEPrS will vary depending upon the nature
of the Exchange Event and, in the case of an Exchange Event resulting from a
redemption or Buy-Back of the ANZ Preference Shares for cash, the value, for
purposes of calculating United Kingdom tax on capital gains, of one U.S. dollar
(or the equivalent thereof in any successor legal currency of the United
States) in terms of British pounds (or the equivalent thereof in any successor
legal currency of the United Kingdom) (the "Dollar Value") on the Exchange Date
(expressed as Pounds/$).
In the case of any Exchange Event other than a redemption or Buy-Back of
the ANZ Preference Shares for cash, the Trust will obtain the ADRs to be
distributed to holders of TrUEPrS as a result of the following sequence of
events: (i) the U.K. Company will redeem the Debt Securities for cash at their
aggregate principal amount, (ii) under the terms of the Debt Securities, the
cash proceeds from the redemption referred to in clause (i) above will
automatically be applied to effect the purchase by the Trust of the Jersey
Preference Shares from the U.K. Company, (iii) the Jersey Subsidiary will
redeem the Jersey Preference Shares for cash at their aggregate liquidation
preference, and (iv) under the terms of the ADRs Purchase Contract, the cash
redemption proceeds of the Jersey Preference Shares will be used by the Trust
to purchase the ADRs from the Jersey Subsidiary.
In the case of an Exchange Event resulting from a redemption or Buy-Back
of the ANZ Preference Shares for cash, the Trust will obtain the cash to be
distributed to the holders of TrUEPrS as a result of one of the two sequences
described below, depending on the Dollar Value on the Exchange Date.
If the Dollar Value on the Exchange Date is higher than the Dollar Value
on any date on which the ANZ Preference Shares are originally issued (i.e., if
the British pound has depreciated against the U.S. dollar between such dates),
then the sequence of events preceding the distribution of cash to holders of
TrUEPrS will be as follows: (i) the U.K. Company will redeem the Debt
Securities for cash at their aggregate principal amount plus accrued interest
from and including the Interest Payment Date immediately preceding the Exchange
Date to but excluding the Exchange Date, (ii) under the terms of the Debt
Securities, the cash proceeds from the redemption referred to in clause (i)
above (excluding the accrued interest portion thereof) will automatically be
applied to effect the purchase by the Trust of the Jersey Preference Shares
from the U.K. Company, (iii) there will be a redemption or Buy-Back of the ANZ
Preference Shares for cash in an amount equal to their aggregate liquidation
preference, and (iv) the Jersey Subsidiary will use the cash proceeds from the
redemption or Buy-Back referred to in clause (iii) above to redeem the Jersey
Preference Shares for cash at their aggregate liquidation preference.
If the Dollar Value on the Exchange Date is equal to or less than the
Dollar Value on every date on which the ANZ Preference Shares are originally
issued (i.e., if the British pound has remained the same or
14
<PAGE>
appreciated against the U.S. dollar between such dates), then the sequence of
events preceding the distribution of cash to holders of TrUEPrS will be as
follows: (i) there will be a redemption or Buy-Back of the ANZ Preference
Shares for cash in an amount equal to their aggregate liquidation preference,
(ii) the Jersey Subsidiary will use the cash proceeds from the redemption or
Buy-Back referred to in clause (i) above to redeem the Jersey Preference Shares
for cash at their aggregate liquidation preference, and (iii) the U.K. Company
will use the proceeds from the redemption of the Jersey Preference Shares
referred to in clause (ii) above and the Income Entitlement it receives on the
Exchange Date to redeem the Debt Securities for cash at their aggregate
principal amount plus accrued interest from and including the Interest Payment
Date immediately preceding the Exchange Date to but excluding such Exchange
Date.
Except as described herein, holders of the TrUEPrS will receive non-
cumulative dividend distributions in an amount equal to $ per TrUEPrS per
annum, payable quarterly in arrears in an amount equal to $ per TrUEPrS on
January 15, April 15, July 15 and October 15 of each year (each, a "Dividend
Payment Date"), to holders of record as of the immediately preceding January 1,
April 1, July 1 and October 1 (each, a "Record Date"), respectively. The first
dividend distribution in respect of the period from and including November ,
1998 (the "Issue Date") to but excluding January 15, 1999 will equal $ per
TrUEPrS. See "Dividends and Distributions."
In the event that any Dividend Payment Date for the TrUEPrS or Interest
Payment Date for the Debt Securities is not a Business Day, then the dividend
or interest payable on such date need not be made on such Dividend Payment Date
or Interest Payment Date, as applicable, but instead may be made on the next
succeeding Business Day with the same force and effect as if made on such
Dividend Payment Date or Interest Payment Date, as the case may be. As used
herein, "Business Day" means each Monday, Tuesday, Wednesday, Thursday or
Friday which is not a day on which banking institutions in Sydney, Australia,
New York, New York or any city or cities in which the principal place of
business of any ANZ Borrower outside of Australia is located from time to time
(initially Wellington, New Zealand) are authorized or obliged by law or
executive order to close.
ANZ
THIS PROSPECTUS RELATES ONLY TO THE TrUEPrS OFFERED HEREBY AND DOES NOT
RELATE TO ANZ, THE ADRs OR THE ANZ PREFERENCE SHARES. ANZ HAS FILED A
REGISTRATION STATEMENT ON FORM F-3 WITH THE SECURITIES AND EXCHANGE COMMISSION
(THE "COMMISSION") WITH RESPECT TO THE ANZ PREFERENCE SHARES AND A REGISTRATION
STATEMENT ON FORM F-6 WITH RESPECT TO THE ADRs THAT MAY BE RECEIVED BY A HOLDER
OF TrUEPrS UPON THE OCCURRENCE OF AN EXCHANGE EVENT. THE PROSPECTUS OF ANZ
CONSTITUTING A PART OF SUCH REGISTRATION STATEMENT ON FORM F-3 INCLUDES
INFORMATION RELATING TO ANZ, THE ADRs AND THE ANZ PREFERENCE SHARES. THE
PROSPECTUS OF ANZ IS BEING ATTACHED HERETO AND DELIVERED TO PROSPECTIVE
PURCHASERS OF TrUEPrS TOGETHER WITH THIS PROSPECTUS FOR CONVENIENCE OF
REFERENCE ONLY. THE PROSPECTUS OF ANZ DOES NOT CONSTITUTE A PART OF THIS
PROSPECTUS, NOR IS IT INCORPORATED BY REFERENCE HEREIN.
EXCHANGE EVENT
The earliest occurrence of any of the following dates or events shall
constitute an "Exchange Event" as of the "Exchange Date" applicable to such
Exchange Event as specified below:
(i) January 15, 2048 or the date of any earlier redemption or Buy-
Back of the ANZ Preference Shares for cash, in which case the Exchange Date
will be the earlier of such dates;
(ii) any date selected by ANZ in its absolute discretion, in which
case the Exchange Date will be such date;
(iii) the failure of the Trust to receive for any reason on or within
three Business Days after an Interest Payment Date the interest then due on
the Debt Securities in full without deduction or withholding
15
<PAGE>
for any taxes, duties or other charges, in which case the Exchange Date
will be the fourth Business Day following such Interest Payment Date;
(iv) any date on which the Tier 1 Capital Ratio or the Total Capital
Adequacy Ratio of ANZ (either as reported quarterly by ANZ to the
Australian Prudential Regulation Authority or any successor or replacement
body ("APRA") or as determined at any time by APRA in its absolute
discretion) is below 4% or 8%, respectively or, in each case, such lesser
percentage as may be prescribed by APRA for ANZ at the time (the applicable
percentage in each such case being the "Required Percentage"), and is not
increased by ANZ to at least the Required Percentage, within 90 days after
the date on which ANZ makes such quarterly report or receives notice from
APRA of such determination by APRA, as applicable, in which case the
Exchange Date will be the Business Day immediately following the expiration
of such 90-day period;
(v) any change in
(A) the legal ownership of the securities (other than the Debt
Securities) issued by,
(B) any provision of the constituent documents of (unless such
change has been consented to by the record holders of more than 50% of
the TrUEPrS or, in the opinion of competent legal counsel selected by
the Trust, such change would not have a material adverse effect on the
rights of the holders of the TrUEPrS), or
(C) the business purpose (or, solely with respect to the Jersey
Charitable Trust, the powers of the trustees thereof) (as specified in
the constituent documents) of, any of the U.K. Company, the Jersey
Holding Company, the Jersey Charitable Trust or the Jersey Subsidiary,
in which case the Exchange Date will be the date on which the change
occurs;
(vi) any change in the business purpose (as specified in the
constituent documents) of the Distribution Trust, in which case the
Exchange Date will be the date on which the change occurs;
(vii) the common securities of the Distribution Trust cease to be
wholly-owned, directly or indirectly, by ANZ or a directly or indirectly
wholly-owned subsidiary or branch of ANZ, in which case the Exchange Date
will be the date on which the common securities of the Distribution Trust
cease to be wholly-owned, directly or indirectly, by ANZ or a direct or
indirect wholly-owned subsidiary or branch of ANZ;
(viii) any ANZ Borrower ceases to be ANZ or a direct or indirect
wholly-owned subsidiary or branch of ANZ, in which case the Exchange Date
will be the date on which such ANZ Borrower ceases to be ANZ or a direct or
indirect wholly-owned subsidiary or branch of ANZ;
(ix) (A) a proceeding is commenced by ANZ, the U.K. Company, the
Jersey Holding Company, the Jersey Charitable Trust, the Jersey
Subsidiary, the Distribution Trust or any ANZ Borrower (each, a
"Relevant Entity") or a person that controls the Relevant Entity for an
order that the Relevant Entity be wound up or for the appointment of a
provisional liquidator, liquidator, administrator, controller or
similar official in respect of the Relevant Entity or all or
substantially all of its property, in which case the Exchange Date will
be the date on which the proceeding is filed;
(B) a proceeding is commenced by any other person for an order
that a Relevant Entity be wound up or for the appointment of a
provisional liquidator, liquidator, administrator, controller or
similar official in respect of a Relevant Entity or all or
substantially all of its property (unless such proceeding is
discontinued or dismissed within 21 days of its having been filed), in
which case the Exchange Date will be the Business Day immediately
following the expiration of such 21-day period;
(C) a provisional liquidator, liquidator, administrator,
controller or similar official is appointed whether by a court or
otherwise in respect of any Relevant Entity or all or substantially all
of its property (unless such appointment is revoked or set aside within
21 days of such appointment),
16
<PAGE>
in which case the Exchange Date will be the Business Day immediately
following the expiration of such 21-day period; or
(D) the Trust dissolves in accordance with the terms of the
Declaration of Trust or for any other reason, in which case the
Exchange Date will be the Business Day immediately preceding the
effective date of such dissolution; and
(x) the Collateral Agent fails, at any time, to have a valid first,
perfected and enforceable security interest in, and lien on, the Jersey
Preference Shares and the ADRs, and any redemption proceeds from any of the
foregoing, and such failure is not remedied on or before ten Business Days
after written notice of such failure is given to the U.K. Company or the
Jersey Subsidiary, as the case may be, by the Collateral Agent as
contemplated by the Security and Pledge Agreements, in which case the
Exchange Date will be the Business Day immediately following the expiration
of such ten-Business Day period.
Notwithstanding the foregoing, any ANZ Borrower may, with the consent of
the Distribution Trust, assign its ANZ Loan or the Distribution Trust may
replace any ANZ Loan with another loan, in each case, to ANZ or to one or more
directly or indirectly wholly-owned subsidiaries or branches of ANZ with
prospective payment terms identical to, and other terms substantially the same
as, those of such ANZ Loan, in which case ANZ or such other subsidiary or
branch and loan will be deemed to be such ANZ Borrower and such ANZ Loan,
respectively, and any such action will not constitute an Exchange Event.
Total Capital Adequacy Ratio means the total capital adequacy ratio as
prescribed by APRA in its capital adequacy guidelines for Australian banks, as
modified from time to time. Tier 1 Capital Ratio means the ratio of Tier 1
capital to risk weighted assets (on a consolidated group basis) prescribed by
APRA in its capital adequacy guidelines for Australian banks, as modified from
time to time. Tier 1 capital means capital which is regarded as "tier 1
capital" for the purposes of the capital adequacy guidelines of APRA.
The redemption or Buy-Back component of the Exchange Event set forth in
clause (i) above is a result of the terms of issue of the ANZ Preference
Shares, which provide that, with the prior consent of APRA (if required) or in
the case of a Buy-Back, if no consent is required, with the confirmation that
APRA has no objection, and in accordance with the terms of issue of the ANZ
Preference Shares, ANZ may, in its absolute discretion, redeem or Buy-Back the
ANZ Preference Shares for cash (a) prior to the fifth anniversary of the Issue
Date, in whole, but only upon the occurrence of certain tax, regulatory or
registration events and (b) at any time on or after the fifth anniversary of
the Issue Date, in whole or, after an Exchange Date, in whole or in part.
If the Exchange Event is anything other than a redemption or Buy-Back of
the ANZ Preference Shares for cash, then the Trust will distribute to holders
of the TrUEPrS one ADR per TrUEPrS. If a redemption or Buy-Back of the ANZ
Preference Shares for cash occurs, then the Trust will distribute to holders of
the TrUEPrS cash in the amount of $25 per TrUEPrS, plus the accrued dividends
thereon for the current quarterly dividend period. After the occurrence of any
such Exchange Event, the Collateral Agent will deliver the ADRs or the cash, as
the case may be, to the Administrator and the Administrator, on behalf of the
Trust, will (i) in the case of a redemption or Buy-Back of the ANZ Preference
Shares for cash, distribute the proceeds to the holders of TrUEPrS at the rate
of $25 per TrUEPrS then outstanding together with an amount equal to the
accrued but unpaid interest on each $25 principal amount of Debt Securities
from and including the Interest Payment Date immediately preceding the Exchange
Date to but excluding the Exchange Date, or (ii) in all other cases, distribute
the ADRs to the holders of TrUEPrS at the rate of one ADR per TrUEPrS then
outstanding. The distribution described in the preceding sentence will be made
to holders of record as of the opening of business on the Exchange Date. The
holders of the TrUEPrS will thereafter have no further claims against the Trust
and the Administrator will wind up the Trust.
Dividend distributions on the TrUEPrS will cease to accrue on and after
the Exchange Date. In the case of any Exchange Event other than a redemption or
Buy-Back of the ANZ Preference Shares for cash, no dividend distributions will
be payable on the TrUEPrS on the Exchange Date (even if such Exchange Date is a
Dividend Payment Date). Instead, non-cumulative dividends will begin to accrue
on the ANZ Preference Shares from and including the last Interest Payment Date
in respect of which interest on the Debt Securities has been paid or provided
for in full. Accordingly, the dividends for any quarterly dividend period
ending on or after the
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Exchange Date will be payable as dividends on the ANZ Preference Shares and in
accordance with the terms of the ANZ Preference Shares.
INTERVENING VEHICLES
The U.K. Company. The U.K. Company is a special purpose unlimited company
incorporated under the laws of England and Wales, and domiciled in the United
Kingdom. The U.K. Company is wholly-owned by a special purpose company
incorporated with limited liability under the laws of, and domiciled in,
Jersey, the Channel Islands (the "Jersey Holding Company"), which holds all of
the U.K. Company's ordinary shares. These ordinary shares will be the only
capital stock of the U.K. Company. The ordinary shares of the Jersey Holding
Company will be the only capital stock of the Jersey Holding Company and are
held by a charitable trust established under the laws of, and domiciled in,
Jersey, the Channel Islands (the "Jersey Charitable Trust").
The U.K. Company was established for the purpose of, among other things,
issuing the Debt Securities to the Trust and investing the proceeds thereof in
the Jersey Preference Shares. The U.K. Company will elect to be treated as a
partnership for United States Federal income tax purposes under U.S. Treasury
Regulations Sections 301.7701-1 through -3.
The U.K. Company will have at least two directors and an independent
auditor. The Memorandum and Articles of Association of the U.K. Company will
prohibit it from taking any action that would have a material adverse effect on
the rights of the holders of the TrUEPrS. There will be no annual shareholder
meetings. There will be one directors' meeting each year at which the
director(s) will nominate directors, if necessary, and approve the annual
accounts. The U.K. Company will also appoint a paying agent located in The City
of New York to receive Income Entitlements from the Distribution Trust, to make
payments on the Debt Securities to the Trust and to meet the ongoing costs and
expenses of various entities as described below.
The Jersey Subsidiary. The Jersey Subsidiary is a special purpose
company incorporated with limited liability under the laws of, and domiciled
in, Jersey, Channel Islands. The Jersey Holding Company and the U.K. Company
will own 51% and 49%, respectively, of the ordinary shares of the Jersey
Subsidiary, unless an Exchange Event (other than a redemption or Buy-Back of
the ANZ Preference Shares for cash if the Dollar Value on the Exchange Date is
equal to or less than the Dollar Value on every date on which the ANZ
Preference Shares are originally issued) occurs, in which case, the U.K.
Company will sell all the ordinary shares it owns in the Jersey Subsidiary to
the Jersey Holding Company immediately prior to the redemption of the Jersey
Preference Shares. The Jersey Subsidiary was established for the purpose of,
among other things, issuing the Jersey Preference Shares and investing the
proceeds thereof in the ADRs. The Jersey Subsidiary will elect to be treated as
a partnership for United States Federal income tax purposes under U.S. Treasury
Regulations Sections 301.7701-1 through -3.
The Jersey Subsidiary will be managed by a Board of Directors and have an
independent auditor. The Memorandum and the Articles of Association of the
Jersey Subsidiary will prohibit the Board of Directors from taking any action
that would have a material adverse effect on the rights of the holders of the
TrUEPrS. There will be no annual shareholder meetings. There will be one
directors' meeting each year at which the director(s) will nominate directors,
if necessary, and approve the annual accounts.
The Distribution Trust. The Distribution Trust is a business trust
established under the laws of the State of Delaware. The Distribution Trust
will operate in accordance with the distribution trust agreement that
establishes its terms; the U.K. Company will have no right to cause any
variation of such terms. The Distribution Trust will elect to be disregarded as
an entity that is separate from its owner (i.e., the holder of the common
securities of the Distribution Trust) for United States Federal income tax
purposes under U.S. Treasury Regulations Sections 301.7701-1 through -3.
The administration of the Distribution Trust will be overseen by the
trustees thereof.
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On the Issue Date, ANZ will use the proceeds from the issuance of the ANZ
Preference Shares to make a capital contribution of $350,100,000 (or
$402,500,000 if the Underwriters exercise their over-allotment option in full)
to the Distribution Trust and the Distribution Trust will use the capital
contribution to make one or more ANZ Loans to one or more ANZ Borrowers. Each
ANZ Loan will mature five years after the maturity date of the Debt Securities
on January 15, 2053. The ANZ Loans will be the only asset, and interest thereon
will be the only source of revenue, of the Distribution Trust. Interest on the
ANZ Loans will accrue from the date on which such loan is made and be due and
payable on each Interest Payment Date at the rate of % per annum. The
interest paid on the ANZ Loans will be used by the Distribution Trust to pay
the Income Entitlements to the U.K. Company. The interest rate represents the
sum of % (the interest rate on the Debt Securities, which equals the dividend
rate on the TrUEPrS) and a spread of 0.25%. The spread is designed to enable
the U.K. Company to pay (a) its ongoing costs and expenses and those of the
Jersey Subsidiary, (b) dividends to the Jersey Holding Company in an amount
sufficient to enable it to pay its expenses and those of the Jersey Charitable
Trust, the Collateral Agent and (pursuant to the Trust Expense Agreement (as
defined herein)) the Trust and (c) the indemnity fee payable to ANZMB Limited,
an affiliate of ANZ (the "ANZ Affiliate").
On and after an Exchange Date, the U.K. Company will cease to be an
income beneficiary of the Distribution Trust and ANZ Funds Pty Ltd, an
affiliate of ANZ, will receive all the Income Entitlements of the Distribution
Trust thereafter; provided, however, if the Exchange Event is the cash
redemption or Buy-Back of the ANZ Preference Shares, the U.K. Company will be
entitled to receive an Income Entitlement equal to the accrued but unpaid
interest on the Debt Securities for the period from and including the Interest
Payment Date immediately preceding the Exchange Date to but excluding the
Exchange Date. In the event an Income Entitlement is not paid for any reason,
an Exchange Event will occur because the U.K. Company will have insufficient
funds to pay interest on the Debt Securities.
Under the terms of the Distribution Trust, other than in connection with
a redemption or Buy-Back of ANZ Preference Shares for cash, no Income
Entitlement shall be paid or payable to the U.K. Company on any Interest
Payment Date if
(i) an Exchange Event has occurred on or prior to such Interest Payment
Date;
(ii) the amount of Income Entitlement payable on such date, together
with the aggregate amount of dividends paid on or before such date
during the then current fiscal year of ANZ on any preference shares
or ordinary shares of ANZ, would exceed ANZ's earnings during the
prior fiscal year; or
(iii) the payment of such Income Entitlement would be prohibited or
limited by applicable law, regulation or order or by any
instrument or agreement to which ANZ is subject (collectively, the
"Payment Prohibitions").
In the event a Payment Prohibition exists or will exist on any Interest Payment
Date, ANZ will notify the Administrator no later than the third Business Day
prior to such date.
TRUST DISSOLUTION
The Trust will dissolve as soon as possible after the exchange of the
TrUEPrS for ADRs or cash, as the case may be, upon the occurrence of an
Exchange Event.
INVESTMENT RESTRICTIONS
The Trust has adopted a fundamental policy that the Trust may not
purchase any securities or instruments other than (a) the Debt Securities and
any distributions thereon, (b) the Jersey Preference Shares, if applicable, and
(c) if applicable, the ADRs to be purchased pursuant to the ADRs Purchase
Contract; issue any securities or instruments except for the TrUEPrS; 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 (a) to invest 100% of its portfolio in the Debt Securities and any
distributions thereon, and not to dispose of the Debt Securities during the
term of the Trust, other than in connection with a mandatory redemption thereof
as a result of an Exchange Event, and
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(b) to enter into the ADRs Purchase Contract and not to dispose of the ADRs
Purchase Contract during the term of the Trust.
Because of the foregoing limitations, the Trust's investments will be
concentrated initially in the financial services industry, which is the
industry in which ANZ currently operates. However, to the extent that in the
future ANZ diversifies its operations into one or more other industries, the
Trust's investments will be less concentrated in the financial services
industry.
DESCRIPTION OF THE TRUEPRS
Each TrUEPrS represents a proportionate share of beneficial interest in
the assets of the Trust. A total of 14,000,000 TrUEPrS will be issued in the
Offering, assuming no exercise of the Underwriters' over-allotment option, and
excluding 4,000 TrUEPrS issued to ML IBK Positions, Inc. in accordance with the
requirements of the Investment Company Act. Upon liquidation of the Trust,
holders of TrUEPrS are entitled to share pro rata based on the number of
TrUEPrS outstanding in the net assets of the Trust available for distribution.
Holders of TrUEPrS have no preemptive, redemption or conversion rights. The
TrUEPrS, when issued and outstanding, will be fully paid and nonassessable.
VOTING RIGHTS
Holders are entitled to one vote for each TrUEPrS 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 TrUEPrS, 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 TrUEPrS or to vote
on other matters upon the written request of the record holders of more than
50% of the TrUEPrS (unless substantially the same matter was voted on during
the preceding 12 months).
Pursuant to the ADRs Security and Pledge Agreement and the ADR deposit
agreement, each TrUEPrS will entitle the holder thereof to direct the exercise
of the voting rights attaching to one ADR and four ANZ Preference Shares. The
holders of the ANZ Preference Shares will be entitled to vote together with the
holders of ordinary shares of ANZ, on the basis of one vote per ANZ Preference
Share on any poll, (a) in all cases, with respect to certain matters specified
below, and (b) during a Special Voting Period, with respect to all matters on
which the holders of the ordinary shares of ANZ are entitled to vote. The
matters referred to in clause (a) of the preceding sentence upon which the
holders of ANZ Preference Shares will have a right to vote, together with the
holders of ordinary shares of ANZ, are: any proposal to reduce the share
capital of ANZ; any resolution to approve the terms of a share buy-back
arrangement; any proposal that affects the rights attached to the ANZ
Preference Shares; any proposal to wind up ANZ; any proposal for the disposal
of the whole of the property, business and undertaking of ANZ; and any matter
during the winding up of ANZ. In addition, the holders of the ANZ Preference
Shares will have the right to vote separately as a class in certain
circumstances involving a variation of the rights of holders of the ANZ
Preference Shares. Pursuant to the ADRs Security and Pledge Agreement, as long
as the ADRs are held by the Jersey Subsidiary, the Jersey Subsidiary will, or
will cause the Collateral Agent to, direct the ADR depositary to vote the ANZ
Preference Shares as directed by the holders of the TrUEPrS.
Merrill Lynch, Pierce, Fenner & Smith Incorporated has applied to the
Commission for an exemptive order that would, if issued, among other things,
permit other investment companies and companies excepted from the definition of
investment company under Sections 3(c)(1) and 3(c)(7) of the Investment Company
Act to own more than 3% of the total outstanding TrUEPrS. Under the Declaration
of Trust, however, any such company owning TrUEPrS in excess of the limits
imposed by Sections 12(d)(1)(A)(i) and 12(d)(1)(C) of the Investment Company
Act must vote their TrUEPrS in proportion to the vote of all other holders of
TrUEPrS that are not such companies. There is no assurance that the application
for an exemptive order will be granted by the Commission.
Modifications and amendments of the terms of the TrUEPrS, the Debt
Securities, the ADRs Purchase Contract and the Jersey Preference Shares may be
made with the consent of not less than a majority of the holders of the
TrUEPrS; provided that, no such modification or amendment may, without the
consent of 100% of the holders of the TrUEPrS, change the amount or timing of
any dividend on the TrUEPrS, the amount or
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timing of interest payments on the Debt Securities, the liquidation preference
of the Jersey Preference Shares, the redemption amount of the Debt Securities
and the Jersey Preference Shares, the purchase price for or the number of ADRs
deliverable pursuant to the ADRs Purchase Contract or otherwise adversely
affect the foregoing terms or cause an Exchange Event to occur. Modifications
and amendments may be made without the consent of any holder of the TrUEPrS to
cure any ambiguity, defect or inconsistency in the Declaration of Trust or any
instrument defining the terms of the TrUEPrS, the Debt Securities and the
Jersey Preference Shares or the ADRs Purchase Contract, provided that, such
action will not adversely affect in any material respect the rights of the
holders of the TrUEPrS or cause an Exchange Event to occur.
RESTRICTIONS ON OWNERSHIP AND TRANSFER
Generally, under the Australian Corporations Law, the concept of voting
share does not include certain types of preference shares with limited voting
rights. Because holders of the ANZ Preference Shares have been conferred a
right to vote following a missed dividend, the ANZ Preference Shares will be
treated as voting shares for relevant purposes. Therefore, a person with an
entitlement to ANZ Preference Shares, including holders of TrUEPrS, should
consider this entitlement with any entitlement to other voting shares in ANZ in
the context of the regulatory thresholds summarized below and seek appropriate
legal advice.
In summary, under the Australian Corporations Law, a person or group of
persons cannot acquire voting shares in a public company if that person or
group of persons or another person would then be "entitled" (which is defined
very broadly) to more than 20% of the voting shares in ANZ unless those shares
are acquired in a manner specifically permitted by law. This restriction also
limits the options available to a shareholder wanting to sell a shareholding of
more than 20% in an Australian public company. The Australian Corporations Law
also imposes certain substantial shareholding disclosure obligations on persons
who are or become "entitled" to 5% or more of the voting shares in a company
listed on the Australian Stock Exchange, such as ANZ.
BOOK-ENTRY SYSTEM
The TrUEPrS 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 Underwriters 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 Securities Exchange
Act of 1934, as amended. 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.
The Depository has further advised the Trust that management of the
Depository is aware that some computer applications, systems, and the like for
processing data ("Systems") that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter "Year 2000
problems." The Depository has informed its participants and other members of
the financial community (the "Industry") that it has developed and is
implementing a program so that its Systems, as the same relate to the timely
payment of distributions (including principal and income payments) to
securityholders, book-entry deliveries, and settlement of trades within the
Depository, continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, the Depository's plan includes a testing phase, which is expected
to be completed within appropriate time frames.
However, the Depository's ability to perform properly its services is
also dependent upon other parties, including but not limited to issuers and
their agents, as well as the Depository's direct and indirect participants and
third party vendors from whom the Depository licenses software and hardware,
and third party vendors on whom the Depository relies for information or the
provision of services, including telecommunication and
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electrical utility service providers, among others. The Depository has informed
the Industry that it is contacting (and will continue to contact) third party
vendors from whom the Depository acquires services to: (i) impress upon them
the importance of such services being Year 2000 compliant; and (ii) determine
the extent of their efforts for Year 2000 remediation (and, as appropriate,
testing) of their services. In addition, the Depository is in the process of
developing such contingency plans as it deems appropriate.
According to the Depository, the foregoing information with respect to
the Depository has been provided to the Industry for informational purposes
only and is not intended to serve as a representation, warranty, or contract
modification of any kind.
Upon the issuance of a Global Security, the Depository or its nominee
will credit the respective TrUEPrS represented by such Global Security to the
accounts of participants. The accounts to be credited shall be designated by
the Underwriters. 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 TrUEPrS.
Except as set forth below, owners of beneficial interests in such Global
Securities will not be entitled to have the TrUEPrS registered in their names
and will not receive or be entitled to receive physical delivery of the TrUEPrS
in definitive form and will not be considered the owners or holders thereof.
Delivery of ADRs or payment of amounts or delivery of other consideration
deliverable on exchange of, and any quarterly distributions on, TrUEPrS
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 TrUEPrS 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 depository and a successor
depository is not appointed by the Trust within ninety days, the Trust will
issue TrUEPrS in definitive registered form in exchange for the Global Security
representing such TrUEPrS. In addition, the Trust may at any time and in its
sole discretion determine not to have any TrUEPrS represented by one or more
Global Securities and, in such extent, will issue TrUEPrS in definitive form in
exchange for all of the Global Securities representing the TrUEPrS. Further, if
the Trust so specifies with respect to the TrUEPrS, an owner of a beneficial
interest in a Global Security representing TrUEPrS may, on terms acceptable to
the Trust and the Depository for such Global Security, receive TrUEPrS 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
TrUEPrS represented by such Global Security equal in number to that represented
by such beneficial interest and to have such TrUEPrS registered in its name.
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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, 53................... Managing Trustee Professor of Finance
Department of Finance University of Delaware
University of Delaware
Newark, DE 19716
William R. Latham III, 54............... Trustee Professor of Economics
Department of Economics University of Delaware
University of Delaware
Newark, DE 19716
James B. O'Neill, 59.................... Trustee Professor of Economics
Center for Economic University of Delaware
Education & Entrepreneurship
University of Delaware
Newark, DE 19716
</TABLE>
COMPENSATION OF TRUSTEES
The annual fees and anticipated out-of-pocket expenses of each
unaffiliated Trustee and any additional fees of the Trust's Managing Trustee
will be paid by the Jersey Holding Company pursuant to an expense agreement
(the "Trust Expense Agreement") between it and The Bank of New York, as the
Administrator, Custodian and Paying Agent of the Trust. 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.
MANAGEMENT ARRANGEMENTS
PORTFOLIO MANAGEMENT AND ADMINISTRATION
The Trust will be internally managed and will not have an investment
adviser. Prior to the Exchange Date, the Trust's portfolio will consist only of
(a) $350,100,000 aggregate principal amount of Debt Securities ($402,500,000
aggregate principal amount of Debt Securities if the Underwriters' over-
allotment option is exercised in full), and any distributions thereon, and (b)
the ADRs Purchase Contract. The Trust's portfolio will not be actively managed.
The Trustees of the Trust will authorize the purchase of the Debt Securities as
directed by the Declaration of Trust. It is a fundamental policy of the Trust
that the Debt Securities may not be disposed of during the term of the Trust
other than in connection with a mandatory redemption thereof as a result of an
Exchange Event, and that the ADRs Purchase Contract not be disposed of during
the term of the Trust.
The Trust will pay all expenses incurred in the Trust's formation and
other initial expenses and expenses relating to the Offering out of the
facility fee to be paid on the Issue Date to the Trust by the U.K. Company in
connection with the investment by the Trust in the Debt Securities. The ongoing
administrative and other expenses of the Trust such as 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 Administrator, the Custodian and the Paying Agent, fees and expenses of
Trustees, accounting costs, brokerage costs, litigation, mailing and other
expenses properly payable by the Trust will be paid by the Jersey Holding
Company pursuant to the Trust Expense Agreement. Subject to the satisfaction of
certain conditions, any
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operating expenses of the Trust not covered by the Trust's arrangements with
the Jersey Holding Company will be paid by the ANZ Affiliate pursuant to an
expense and indemnity agreement (the "Expense and Indemnity Agreement") among
it, the U.K. Company, the Trust, the Jersey Holding Company, the Jersey
Subsidiary and the Jersey Charitable Trust. See "--Estimated Expenses."
Administrator. The day-to-day affairs of the Trust will be managed by The
Bank of New York, as the Administrator pursuant to an administration agreement
(the "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 TrUEPrS 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 TrUEPrS. The
Administrator will not, however, select the independent public accountants for
the Trust or sell or otherwise dispose of the Trust assets (except in
connection with the occurrence of an Exchange Event).
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 and Paying Agent of the
Trust, and except for its role as Collateral Agent and securities intermediary
under the Security and Pledge Agreements, as paying and transfer agent for the
Debt Securities and the ANZ Preference Shares, and as depositary for the ADRs,
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 (the "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 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. The Custodian will also act
as Collateral Agent under the Security and Pledge Agreements, under which it
will hold a perfected security interest in the ADRs, the Jersey Preference
Shares or other assets consistent with the terms of the securities pledged
thereunder on behalf of the Trust, and as depositary for the ADRs.
PAYING AGENT
The paying agent, transfer agent and registrar (the "Paying Agent") for
the TrUEPrS 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.
INDEMNIFICATION
The Trust will, to the fullest extent permitted by applicable law,
indemnify each Trustee, the Administrator, the Paying Agent and the Custodian
with respect to any claim, liability, loss which it may incur in acting as
Trustee, Administrator, 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, pursuant to the Expense and Indemnity
Agreement, the ANZ Affiliate will reimburse the Trust for any amounts it may be
required to pay as indemnification to any Trustee, the Administrator, the
Paying Agent or the Custodian.
24
<PAGE>
ESTIMATED EXPENSES
Organization costs of the Trust in the amount of $32,000 and estimated
costs of the Trust in connection with the initial registration of the TrUEPrS
and the Offering in the amount of approximately $518,000 will be paid by the
Trust out of the facility fee to be paid on the Issue Date to the Trust by the
U.K. Company in connection with the investment by the Trust in the Debt
Securities. The ongoing administrative and other expenses of the Trust will be
paid by the Jersey Holding Company pursuant to the Trust Expense Agreement.
Subject to the satisfaction of certain conditions, any operating expenses of
the Trust not covered by the Trust's arrangements with the Jersey Holding
Company will be paid by the ANZ Affiliate pursuant to the Expense and Indemnity
Agreement.
DIVIDENDS AND DISTRIBUTIONS
The Trust intends to distribute to holders dividend distributions in an
amount equal to $ per TrUEPrS per annum, payable quarterly in arrears in
an amount equal to $ per TrUEPrS on each Dividend Payment Date to
holders of record on the immediately preceding Record Date. The first
distribution in respect of the period from and including the Issue Date to but
excluding January 15, 1999 will equal $ per TrUEPrS.
Dividend payments on the TrUEPrS will be made from the interest payments
received by the Trust on the Debt Securities. Interest payments on the Debt
Securities will be made by the U.K. Company only to the extent that it receives
Income Entitlements as the income beneficiary of the Distribution Trust. The
U.K. Company's right to receive Income Entitlements will not represent an
absolute ownership interest in the Distribution Trust or the income thereof,
but rather an entitlement to receive Income Entitlements only to the extent
actually distributed to the U.K. Company by the Distribution Trust; if any
Income Entitlement payable on any Interest Payment Date is not paid to the U.K.
Company or at its direction on such date for any reason, the Distribution Trust
will have no further obligation to pay such Income Entitlement to the U.K.
Company and the U.K. Company will have no right to require such payment. See
"Investment Objective and Policies-- Intervening Vehicles." In the event an
Income Entitlement is not paid for any reason, an Exchange Event will occur
because the U.K. Company will have insufficient funds to pay interest on the
Debt Securities.
On and after the Exchange Date, the U.K. Company will cease to be the
income beneficiary of the Distribution Trust and ANZ Funds Pty Ltd, an
affiliate of ANZ, will receive all the Income Entitlements of the Distribution
Trust thereafter; provided, however, if the Exchange Event is the cash
redemption or Buy-Back of the ANZ Preference Shares, the U.K. Company will be
entitled to receive an Income Entitlement equal to the accrued but unpaid
interest on the Debt Securities for the period from and including the Interest
Payment Date immediately preceding the Exchange Date to but excluding the
Exchange Date.
On each Interest Payment Date,
(i) each ANZ Borrower will make an interest payment on the applicable
ANZ Loan to the Distribution Trust; (ii) if no Payment Prohibition exists,
the Distribution Trust will distribute such interest payment as an Income
Entitlement to the U.K. Company; and (iii) the U.K. Company will pay
(a) interest on the Debt Securities to the Trust,
(b) ongoing costs and expenses of the U.K. Company and the Jersey
Subsidiary,
(c) quarterly dividend payments on the U.K. Company's voting
shares to the Jersey Holding Company, which dividends will be used by
the Jersey Holding Company to pay ongoing expenses of the Jersey
Holding Company, the Jersey Charitable Trust, the Collateral Agent and
(pursuant to the Trust Expense Agreement) the Trust, and
(d) an indemnity fee payable to the ANZ Affiliate.
25
<PAGE>
On any such Interest Payment Date (which will also be a Dividend Payment Date),
the Administrator of the Trust will use all the interest received by the Trust
on the Debt Securities to pay dividends on the TrUEPrS.
Dividend distributions on the TrUEPrS will cease to accrue on and after
the Exchange Date. In the case of any Exchange Event other than a redemption or
Buy-Back of the ANZ Preference Shares for cash, no dividend distributions will
be payable on the TrUEPrS on the Exchange Date (even if such Exchange Date is a
Dividend Payment Date). Instead, non-cumulative dividends will begin to accrue
on the ANZ Preference Shares from and including the last Interest Payment Date
in respect of which interest on the Debt Securities has been paid or provided
for in full. Accordingly, the dividends for any quarterly dividend periods
ending on or after the Exchange Date will be payable only as dividends on the
ANZ Preference Shares and only in accordance with the terms of the ANZ
Preference Shares.
NET ASSET VALUE
The net asset value of the TrUEPrS 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
TrUEPrS 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 value of (a) the Debt Securities, and
(b) the ADRs Purchase Contract held by the Trust will be determined in good
faith by the Board of Trustees pursuant to procedures adopted by them.
TAXATION
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of TrUEPrS is based
upon the advice of Sullivan & Cromwell, counsel to ANZ. The summary addresses
only the tax consequences to persons that acquire TrUEPrS in connection with
the Offering and hold the TrUEPrS as a capital asset. It does not address all
tax consequences of the ownership of TrUEPrS and does not take into account the
specific circumstance of investors such as tax-exempt entities, banks, certain
insurance companies, broker dealers, traders in securities that elect to mark
to market, investors liable for the alternative minimum tax, investors that
hold TrUEPrS as part of a straddle or hedging or conversion transaction or
investors whose functional currency is not the U.S. dollar. The summary is
based on the Internal Revenue Code of 1986, as amended, its legislative
history, existing and proposed regulations thereunder, published rulings and
court decisions as well as the income tax treaty between the United States and
Australia (the "Treaty") all of which are subject to change possibly with
retroactive effect.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS
AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE,
OWNERSHIP AND DISPOSITION OF TrUEPrS, AS WELL AS THE EFFECT OF ANY STATE, LOCAL
OR FOREIGN TAX LAWS.
U.S. Holders
A "U.S. Holder" is any beneficial owner of TrUEPrS that is (i) a citizen
or resident of the United States, (ii) a domestic corporation, (iii) an estate
the income of which is subject to United States Federal income tax without
regard to its source, or (iv) a trust if a court within the United States is
able to exercise primary supervision over administration of the trust and one
or more United States persons have authority to control all substantial
decisions of the trust. A "Non-U.S. Holder" is any beneficial owner that is not
a United States person for United States Federal income tax purposes.
Classification of the Trust and the Debt Securities and Distributions on
------------------------------------------------------------------------
TrUEPrS. For United States Federal income tax purposes the Trust will be
- -------
classified as a grantor trust and not as an association taxable as a
26
<PAGE>
corporation, and the Debt Securities held by the Trust will be treated as
equity in ANZ. Accordingly, for United States Federal income tax purposes, each
U.S. Holder generally will be treated as owning equity of ANZ and will be
required to include in income, as a dividend, the holder's share of the gross
amount of the interest paid to the Trust on the Debt Securities to the extent
of the current and accumulated earnings and profits (as determined for United
States Federal income tax purposes) of ANZ. For foreign tax credit limitation
purposes the payments will be income from sources without the United States,
but generally will be treated separately, together with the other items of
"passive income" (or in the case of certain holders, "financial services
income").
Sale of the TrUEPrS. Upon a sale or other disposition of the TrUEPrS
-------------------
(including generally the receipt of a distribution of cash in redemption of all
of a U.S. Holder's TrUEPrS), a U.S. Holder will recognize gain or loss in an
amount equal to the difference between the amount realized and the U.S.
Holder's adjusted tax basis. Generally, such gain or loss will be capital gain
or loss and will be long-term capital gain or loss if the U.S. Holder's holding
period exceeds one year. Any such gain will be income from sources within the
United States for foreign tax credit limitation purposes.
Consequences of an Exchange Event. As described above under "Investment
---------------------------------
Objective and Policies--Exchange Event" upon the occurrence of an Exchange
Event, the Trust will distribute ADRs or, under certain circumstances, cash to
holders of TrUEPrS in exchange for their TrUEPrS and in liquidation of the
Trust. A U.S. Holder's exchange of TrUEPrS for ADRs generally will not be a
taxable event for United States Federal income tax purposes. A U.S. Holder's
basis in the ADRs received upon exchange will generally be the same as the U.S.
Holder's basis in the property exchanged therefor and such holder's holding
period in the ADRs would include their holding period in such property.
Upon the occurrence of certain Exchange Events, holders of the TrUEPrS
may receive cash. For U.S. Federal income tax purposes such receipt of cash
would constitute a taxable disposition of the TrUEPrS and a U.S. Holder would
generally recognize gain or loss in the same manner if there had been a sale or
disposition as described under "--Sale of the TrUEPrS" above. Amounts
representing accrued but unpaid interest on the Debt Securities will be treated
as a distribution on TrUEPrS as discussed under "--Classification of the Trust
and the Debt Securities and Distributions on TrUEPrS" above.
ADRs Received in an Exchange Event
Distributions on the ADRs. U.S. Holders will include in gross income the
-------------------------
gross amount of any dividend paid including Additional Amounts (as defined and
described in the accompanying prospectus of ANZ), if any, before reduction for
Australian withholding taxes by ANZ, out of its current or accumulated earnings
and profits (as determined for U.S. Federal income tax purposes) as ordinary
income when the dividend is actually or constructively received by the U.S.
Holder. The dividend will not be eligible for the dividends received deduction
generally allowed to United States corporations in respect of dividends
received from other United States corporations.
Subject to certain limitations, the Australian tax withheld, if any, in
accordance with the Treaty and paid over to Australia will be creditable
against the U.S. Holder's United States Federal income tax liability. For
foreign tax credit limitation purposes, the dividend will be income from
sources without the United States, but generally will be treated separately,
together with the other items of "passive income" (or in the case of certain
holders "financial services income").
Sale or Other Disposition of ADRs. A U.S. Holder will recognize gain or
---------------------------------
loss for U.S. Federal income tax purposes upon the sale or other disposition of
ADRs in an amount equal to the difference between the U.S. dollar value of the
amount realized and the U.S. Holder's adjusted tax basis (determined in U.S.
dollars) in the ADRs. Generally, such gain will be capital gain or loss, will
be long-term capital gain or loss if the U.S. Holder's holding period for the
ADRs exceeds one year and any such gain will be income from sources within the
United States for foreign tax credit limitation purposes.
27
<PAGE>
PFIC Considerations
ANZ does not believe that it will be treated as a passive foreign
investment company (a "PFIC") for United States Federal income tax purposes but
that is a factual determination made annually and therefore may be subject to
change. Because a U.S. Holder of TrUEPrS will be treated as owning an equity
interest in ANZ for United States Federal income tax purposes, if ANZ were a
PFIC a U.S. Holder of TrUEPrS as well as a holder of ADRs would be subject to
certain adverse tax consequences.
Non-U.S. Holders
Distributions on the TrUEPrS and ADRs. Distributions to a Non-U.S. Holder
-------------------------------------
will not be subject to United States Federal income tax unless such
distributions are effectively connected with the conduct of a trade or business
within the United States by such Non-U.S. Holder (and are attributable to a
permanent establishment maintained in the United States by such Non-U.S.
Holder, if an applicable income tax treaty so requires as a condition for such
Non-U.S. Holder to be subject to United States taxation on a net income basis
in respect of income from TrUEPrS or ADRs), in which case such Non-U.S. Holder
generally will be subject to tax in respect of distributions in the same manner
as a U.S. Holder. Any such effectively connected distributions received by a
non-U.S. corporation may also, under certain circumstances, be subject to an
"additional branch profits" tax at a 30% rate of such lower rate as may be
specified by an applicable income tax treaty.
Sale or Disposition of the TrUEPrS and ADRs. A Non-U.S. Holder will not
-------------------------------------------
be subject to United States Federal income tax in respect of gain recognized on
a sale or other disposition of TrUEPrS or ADRs unless (i) the gain is
effectively connected with a trade or business of the Non-U.S. Holder in the
United States (and is attributable to a permanent establishment maintained in
the United States by such Non-U.S. Holder, if an applicable income tax treaty
so requires as a condition for such Non-U.S. Holder to be subject to United
States taxation on a net income basis in respect of gain from the sale or other
disposition of the TrUEPrS or ADRs) or (ii) in the case of a Non-U.S. Holder
who is an individual, such holder is present in the United States for 183 or
more days in the taxable year of the sale and certain other conditions apply.
Effectively connected gains realized by a corporate Non-U.S. Holder may also,
under certain circumstances, be subject to an additional "branch profits" tax
at a 30% rate or such lower rate as may be specified by an applicable income
tax treaty.
Information Reporting and Backup Withholding Tax
In general, information reporting requirements will apply to payments of
dividends made within the United States by the Trust or any of its paying
agents on the TrUEPrS or, in the case of ADRs, by a U.S. paying agent or other
U.S. intermediary and "backup withholding" at a rate of 31% will apply to such
payments made to a U.S. Holder (other than a corporation or other exempt U.S.
Holder) unless the U.S. Holder furnishes its taxpayer identification number in
the manner required by United States law and applicable regulations, certifies
that such number is correct, certifies as to no loss or exemption from backup
withholding and meets certain other conditions. A Non-U.S. Holder will be
exempt from backup withholding provided that certain certification requirements
are satisfied.
Payment of the proceeds from the disposition of TrUEPrS or ADRs to or
through the United States office of a broker is subject to both information
reporting and backup withholding unless the holder establishes an exemption
from information reporting and backup withholding. United States information
reporting and backup withholding generally will not apply to a payment made
outside the United States of the proceeds of a sale of TrUEPrS or ADRs through
an office outside the United States of a non-United States broker. However,
United States information reporting will apply to a payment made outside the
United States of the proceeds of a sale of TrUEPrS or ADRs through an office
outside the United States of a broker (i) that is a United States person, (ii)
that derives 50% or more of its gross income for a specified three year period
from the conduct of a trade or business in the United States, (iii) that is a
"controlled foreign corporation" as to the United States, or (iv) with respect
to payments made after December 31, 1999, that is a foreign partnership if, at
any time during its tax year, one or more of its partners are U.S. persons (as
defined in U.S. Treasury Regulations) who in the
28
<PAGE>
aggregate hold more than 50% of the income or capital interest in the
partnership or if, at any time during its tax year, such foreign partnership is
engaged in a United States trade or business, unless the broker has documentary
evidence in its files that the holder or beneficial owner is not a United
States person or the holder or beneficial owner otherwise establishes an
exemption. Backup withholding will not apply to such payments unless the broker
has actual knowledge that the payee is a U.S. person. Any amounts withheld from
a holder under the backup withholding rules will be allowed as a refund or a
credit against such holder's United States Federal income tax liability,
provided the required information is furnished to the Internal Revenue Service.
CERTAIN AUSTRALIAN TAX CONSIDERATIONS
The taxation discussion below of certain Australian tax consequences is
based on the advice of PricewaterhouseCoopers Securities Limited, Australia and
outlines certain Australian tax considerations for U.S. holders in relation to
the purchase, ownership and disposition of the TrUEPrS and the acquisition,
ownership and disposition of the ANZ Preference Shares represented by the ADRs.
The discussion is intended only as a descriptive summary and does not purport
to be a complete technical 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 TrUEPrS should consult their own
tax advisors concerning the application of Australian tax laws to their
particular situations as well as any consequences of the purchase, ownership
and disposition of TrUEPrS or the ANZ Preference Shares represented by the ADRs
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 TrUEPrS will
not be subject to Australian tax whether by withholding or otherwise.
Upon the occurrence of certain Exchange Events, the Trust will acquire
ADRs and then immediately deliver the ADRs to the holders of TrUEPrS. There
should be no Australian tax consequences to the Trust of the delivery of the
ADRs to holders of TrUEPrS.
Alternatively, upon an Exchange Event, the Trust may receive cash
repayment of principal and interest due on the Debt Securities. No Australian
tax will be payable by the Trust on such receipts.
The sale of TrUEPrS or the ANZ Preference Shares represented by the ADRs
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 TrUEPrS or ADRs by a U.S. holder will not be subject to
Australian capital gains tax unless:
. the ANZ Preference 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 in value of
the issued capital of ANZ; or
. the U.S. holder is a non-Australian resident but has at any time
used the TrUEPrS or ADRs in carrying on trade or business through a
permanent establishment in Australia.
29
<PAGE>
and the consideration received for the TrUEPrS or the ADRs, (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 TrUEPrS or the ADRs 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%.
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.
Where the U.S. holder acquires ADRs on the Exchange Date, there may be
Australian tax consequences in relation to dividends paid by that Australian
listed corporation. Dividends paid by ANZ 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.
Subject to certain conditions, the terms of the ANZ Preference Shares
provide for holders to be grossed-up for Australian withholding tax on payments
on the ANZ Preference Shares being dividends or amounts deemed to be dividends
for Australian tax purposes.
No stamp, issue, registration or similar taxes are payable in Australia
in connection with the issue of TrUEPrS by the Trust or of ADRs. Transfers of
ANZ Preference Shares by U.S. holders would be subject to stamp duty.
There are no specific estate, inheritance or gift taxes or duties imposed
in Australia. In practice, no Revenue Authority in any State or Territory of
Australia should seek to recover stamp duty on any transfer of or agreement to
transfer ADRs provided that the instruments are not executed and the purchaser
of the ADRs is not resident in Australia.
30
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement
(the "Purchase Agreement"), the Trust has agreed to sell to each of the
underwriters named below (the "Underwriters"), and each of the Underwriters,
for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley &
Co. Incorporated, PaineWebber Incorporated, Prudential Securities Incorporated
and Salomon Smith Barney Inc. are acting as representatives (the
"Representatives"), has severally agreed to purchase, the aggregate number of
TrUEPrS set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER TRUEPRS
----------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................................
Morgan Stanley & Co. Incorporated..................................
PaineWebber Incorporated...........................................
Prudential Securities Incorporated.................................
Salomon Smith Barney Inc...........................................
-----
Total.........................................................
=====
</TABLE>
In the Purchase Agreement, the Underwriters named therein have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
TrUEPrS being sold pursuant to the Purchase Agreement if any of such TrUEPrS
are purchased. Under certain circumstances, under the Purchase Agreement, the
commitments of non-defaulting Underwriters may be increased. In the event of a
failure to close, any funds debited from any investor's account maintained with
an Underwriter will be credited to such account and any funds received by such
Underwriter by check or money order from any investor will be returned to such
investor by check.
The Representatives have advised the Trust that the Underwriters propose
to offer the TrUEPrS offered hereby in the Offering to the public initially at
the public offering price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of $ per
TrUEPrS; provided that such concession for sales of more than 10,000 TrUEPrS to
any single purchaser will be $ per TrUEPrS. The Underwriters may allow, and
such dealers may reallow, a discount not in excess of $ per TrUEPrS to
certain other dealers. After the initial public offering, the public offering
price, concession and discount may be changed. Investors must pay for any
TrUEPrS purchased in the initial public offering on or before November ,
1998.
The Trust has granted the Underwriters an option to purchase up to an
additional 2,096,000 TrUEPrS at the initial public offering price. Such option,
which will expire 30 days after the date of this Prospectus, may be exercised
solely to cover over-allotments. To the extent that the Underwriters exercise
such option, each of the Underwriters will have a firm commitment, subject to
certain conditions, to purchase from the Trust approximately the same
percentage of the option shares that the number of shares to be purchased
initially by that Underwriter is of the 14,000,000 TrUEPrS initially purchased
by the Underwriters.
In view of the fact that the proceeds of the sale of the TrUEPrS will
ultimately be invested in ADRs representing the ANZ Preference Shares, the
Purchase Agreement provides that ANZ will pay, as compensation (the
"Underwriters' Compensation") to the Underwriters, an amount in immediately
available funds of $ per TrUEPrS or $ in the aggregate (or
$ in the aggregate if the Underwriters' over-allotment option is
exercised in full) for the accounts of the several Underwriters; provided that
such compensation for sales of more than 10,000 TrUEPrS to any single purchaser
will be $ per TrUEPrS and to the extent such sales are made, the actual
amount of Underwriters' Compensation will be less than the aggregate amounts
specified above.
The Underwriters do not intend to confirm sales of TrUEPrS offered hereby
to any accounts over which they exercise discretionary authority.
Prior to the Offering, there has been no public market for the TrUEPrS.
The TrUEPrS have been approved for listing on the NYSE, subject to official
notice of issuance. Trading of the TrUEPrS on the NYSE
31
<PAGE>
is expected to commence within the 30-day period after the Issue Date. The
Representatives have advised the Trust that they intend to make a market in the
TrUEPrS prior to the commencement of trading on the NYSE. The Representatives
will have no obligation to make a market in the TrUEPrS, however, and may cease
market making activities, if commenced, at any time. In connection with the
listing, the Underwriters will undertake that sales of TrUEPrS will meet the
NYSE's minimum distribution standards.
In view of the fact that the proceeds of the sale of the TrUEPrS will
ultimately be invested in ADRs representing the ANZ Preference Shares, the
Trust and ANZ have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribute to payments the Underwriters may be required to make
in respect thereof.
In connection with the formation of the Trust, ML IBK Positions, Inc., an
affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated, subscribed for
and purchased 4,000 TrUEPrS for a purchase price of $100,000.
Until the distribution of the TrUEPrS is completed, rules of the
Commission may limit the ability of the Underwriters and any selling group
members to bid for and purchase the TrUEPrS. As an exception to these rules,
the Representatives are permitted to engage in certain transactions that
stabilize the price of the TrUEPrS. Such transactions consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
TrUEPrS.
If the Underwriters create a short position in the TrUEPrS in connection
with the Offering, i.e., if they sell more TrUEPrS than are set forth on the
cover page of this Prospectus, the Representatives may reduce that short
position by purchasing TrUEPrS in the open market. The Representatives may also
elect to reduce any short position by exercising all or part of the over-
allotment option described above.
The Representatives may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
TrUEPrS in the open market to reduce the Underwriters' short position or to
stabilize the price of the TrUEPrS, they may reclaim the amount of the selling
concession from the Underwriters and any selling group members who sold those
TrUEPrS 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 any of the Underwriters 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 TrUEPrS. In addition, neither the
Trust nor any of the Underwriters makes any representation that the
Representatives will engage in such transactions or that such transactions,
once commenced, will not be discontinued without notice.
The Trust has not authorized, or taken any action to cause, the issue or
distribution in the Commonwealth of Australia, any of its States, territories
or possessions or any political subdivision thereof ("Australia"), or to any
resident of Australia, of this Prospectus or any other document inviting
applications or offers to subscribe for or purchase the TrUEPrS offered hereby
or offering such TrUEPrS for subscription or purchase and, accordingly, neither
this Prospectus (whether in draft or definitive form) nor any such other
document may be issued or distributed in Australia or to any resident of
Australia for the purpose of inviting applications or offers to subscribe for
or purchase the TrUEPrS offered hereby.
No prospectus in relation to the TrUEPrS has been lodged with or
registered by the Australian Securities and Investments Commission. In
connection with the distribution of the TrUEPrS, each of the several
Underwriters will represent and agree that it: (a) has not (directly or
indirectly) offered for subscription or purchase or issued invitations to
subscribe for or purchase nor has it sold the TrUEPrS; (b) will not (directly
32
<PAGE>
or indirectly) offer for subscription or purchase or issue invitations to
subscribe for or purchase or sell the TrUEPrS; and (c) has not distributed and
will not distribute any draft or definitive prospectus, advertisement or other
offering material, in each case in Australia or to any resident of Australia
(including corporations and other entities organized under the laws of
Australia but not including a permanent establishment of such corporations or
other entities located outside Australia).
This Prospectus does not constitute an offer or, or an invitation to
purchase or subscribe for, the TrUEPrS in Australia. The TrUEPrS may not be
offered, sold or delivered in or to any resident of the Australia or any of its
states or territories.
Each Underwriter has also in the Purchase Agreement represented and
agreed that:
(a) it has not offered or sold and prior to the date six months after
the date of issue of the TrUEPrS will not offer or sell any TrUEPrS 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 have not resulted and will not result in an offer to
the public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995;
(b) 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 TrUEPrS in, from or otherwise involving the United Kingdom;
and
(c) 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
issue of the TrUEPrS to a person who is of a kind described in Article
11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom the document may otherwise
lawfully be issued or passed on.
Certain of the Underwriters render investment banking and other financial
services to ANZ from time to time.
LEGAL MATTERS
Certain legal matters will be passed upon for the Trust and the
Underwriters 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 P.A., Wilmington, Delaware, special Delaware counsel to the Trust. See
also "Taxation."
EXPERTS
The statement of assets and liabilities 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
TrUEPrS offered hereby. Further information concerning the TrUEPrS 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.
33
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholder of ANZ Exchangeable Preferred Trust
II:
We have audited the accompanying statement of assets and liabilities of ANZ
Exchangeable Preferred Trust II as of November 6, 1998. 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 financial statement 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 provides a reasonable basis for our
opinion.
In our opinion, such statement of assets and liabilities presents fairly, in
all material respects, the financial position of ANZ Exchangeable Preferred
Trust II as of November 6, 1998 in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
November 6, 1998
34
<PAGE>
ANZ EXCHANGEABLE PREFERRED TRUST II
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 6, 1998
<TABLE>
<S> <C>
ASSETS
Cash.................................................................. $100,000
--------
Total Assets.......................................................... $100,000
========
LIABILITIES
Total Liabilities..................................................... $ 0
========
NET ASSETS............................................................ $100,000
========
NET ASSET VALUE PER TRUEPRS
4,000 TrUEPrS issued and outstanding (Note 3)......................... $ 25
========
</TABLE>
- --------
(1) The Trust was created as a Delaware business trust on October 13, 1998 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 U.S. Investment Company Act of 1940, as amended. Costs incurred
in connection with the organization of the Trust will be paid by the Trust
out of the facility fee paid to the Trust by the U.K. Company in connection
with the investment by the Trust in the Debt Securities. The ongoing
administrative and other expenses of the Trust will be paid by the Jersey
Holding Company pursuant to the Trust Expense Agreement. Any expenses of
the Trust not covered by the Trust's arrangements with the Jersey Holding
Company under the Trust Expense Agreement will be paid by the ANZ Affiliate
pursuant to the Expense and Indemnity Agreement.
(2) Offering expenses will be payable upon completion of the Offering and will
be paid by the Trust out of the facility fee to be paid to the Trust by the
U.K. Company in connection with the investment by the Trust in the Debt
Securities.
(3) On November 6, 1998, the Trust issued 4,000 TrUEPrS to ML IBK Positions,
Inc., an affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated,
in consideration for a purchase price of $100,000.
35
<PAGE>
THE FOLLOWING PROSPECTUS OF ANZ IS ATTACHED AND DELIVERED FOR
CONVENIENCE OF REFERENCE ONLY. THE PROSPECTUS OF ANZ DOES NOT CONSTITUTE A
PART OF THE FOREGOING PROSPECTUS OF ANZ EXCHANGEABLE PREFERRED TRUST II,
NOR IS IT INCORPORATED BY REFERENCE THEREIN.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Through and including December , 1998 (the 25th day after the date of
this prospectus), all dealers effecting transactions in the TrUEPrS, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
ANZ EXCHANGEABLE PREFERRED TRUST II
14,000,000 TrUEPrS/SM/
(EXCHANGEABLE FOR AMERICAN DEPOSITARY RECEIPTS
REPRESENTING ANZ PREFERENCE SHARES OR CASH)
-----------------
PROSPECTUS
-----------------
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY
NOVEMBER , 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<C> <S>
1. FINANCIAL STATEMENTS
Independent Auditors' Report
Statement of Assets and Liabilities as of November 6, 1998
2. EXHIBITS
(a)(1) Trust Agreement*
(2) Form of Second Amended and Restated Trust Agreement**
(3) Restated Certificate of Trust*
(b) Not applicable
(c) Not applicable
(d)(1) Form of Specimen certificate for TrUEPrS (included in Exhibit (a)(2))*
(2) Portions of the Amended and Restated Trust Agreement of the Registrant
defining the rights of Holders of TrUEPrS*+
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h) Form of Purchase Agreement*
(i) Not applicable
(j) Form of Custodian Agreement*
(k)(1) Form of Administration Agreement*
(2) Form of Paying Agent Agreement*
(3) Form of Specimen for Debt Securities*
(4) Form of ADRs Security and Pledge Agreement*
(5) Form of Jersey Preference Shares Security and Pledge Agreement*
(6) Form of Trust Reimbursement Agreement*
(7) Form of Trust Expense Agreement*
(8) Form of Expense and Indemnity Agreement*
(9) Form of Debt Securities Subscription Agreement*
(10) Form of ADRs Purchase Contract*
(11) Form of Distribution Trust Agreement*
(l) Opinion and Consent of Brown & Wood LLP, counsel to the Trust**
(m) Not applicable
(n)(1) Tax Opinion and Consent of Sullivan & Cromwell*
(2) Tax Opinion and Consent of PricewaterhouseCoopers Securities Limited,
Australian tax adviser to the Trust**
(3) Consent of Deloitte & Touche LLP, independent auditors for the Trust*
(o) Not applicable
(p) Form of TrUEPrS Subscription Agreement*
(q) Not applicable
(r) Not applicable
</TABLE>
- --------
*Previously filed.
**Filed herewith.
+ Reference is made to Article III (Section 3.02), Article IV, Article V and
Article VII (Section 7.01 and 7.06) of the Trust's Amended and Restated
Trust Agreement filed as Exhibit (a)(2) to this Registration Statement.
<PAGE>
ITEM 25. MARKETING ARRANGEMENTS
See Exhibit (h) to this Registration Statement.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be incurred in connection with the offering described in
this Registration Statement will be paid by the Trust out of the facility fee
paid on the Issue Date to the Trust by the U.K. Company in connection with the
investment by the Trust in the Debt Securities.
ITEM 27. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The Trust will be internally managed and will not have an investment
adviser. The information in the Prospectus under the caption "Management
Arrangements" is incorporated herein by reference.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
There will be one record holder of the TrUEPrS as of the effective date of
this Registration Statement.
ITEM 29. INDEMNIFICATION
Section 6.06 of the Amended and Restated Trust Agreement and Section 6 of
the Purchase Agreement provide for indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "1933 Act"), may be permitted to trustees, officers
and controlling persons of the Registrant, pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission (the "Commission") such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such trustee, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The Trust is internally managed and does not have an investment adviser.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder are maintained at the offices of the Registrant (850
Library Avenue, Suite 204, Newark, Delaware 19715), its custodian (101 Barclay
Street, New York, New York 10286) and its paying agent (101 Barclay Street,
New York, New York 10286).
ITEM 32. MANAGEMENT SERVICES
Not applicable.
ITEM 33. UNDERTAKINGS
(a) The Registrant hereby undertakes to suspend the offering of the shares
covered hereby until it amends its prospectuses contained herein if (1)
subsequent to the effective date of this Registration Statement, its net asset
value per share declines more than 10 percent from its net asset value per
share as of the effective date of the Registration Statement or (2) the net
asset value per share increases to an amount greater than its net proceeds as
stated in the prospectuses contained herein.
<PAGE>
(b) The Registrant hereby undertakes that (i) for purpose of determining any
liability under the 1933 Act, the information omitted from the form of
prospectuses filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the registrant under
Rule 497(h) under the 1933 Act shall be deemed to be part of this registration
statement as of the time it was declared effective; (ii) for the purpose of
determining any liability under the 1933 Act, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide offering
thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Newark, State of Delaware, on the 13th day of
November, 1998.
ANZ Exchangeable Preferred Trust II
/s/ Donald J. Puglisi
By: _________________________________
Donald J. Puglisi
Managing Trustee
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons, in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ Donald J. Puglisi Managing Trustee November 13, 1998
____________________________________
Donald J. Puglisi
William R. Latham III* Trustee
____________________________________
William R. Latham III
James B. O'Neill* Trustee
____________________________________
James B. O'Neill
</TABLE>
/s/ Donald J. Puglisi
*By: ___________________________ November 13, 1998
Donald J. Puglisi
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
(a) (1) Trust Agreement*
(2) Form of Second Amended and Restated Trust Agreement**
(3) Restated Certificate of Trust*
(b) Not applicable
(c) Not applicable
(d) (1) Form of Specimen certificate for TrUEPrS(included in Exhibit(a)(2))*
(2) Portions of the Amended and Restated Trust Agreement of the
Registrant defining the rights of Holders of TrUEPrS*+
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h) Form of Purchase Agreement*
(i) Not applicable
(j) Form of Custodian Agreement*
(k) (1) Form of Administration Agreement*
(2) Form of Paying Agent Agreement*
(3) Form of Specimen for Debt Securities*
(4) Form of ADRs Security and Pledge Agreement*
(5) Form of Jersey Preference Shares Security and Pledge Agreement*
(6) Form of Trust Reimbursement Agreement*
(7) Form of Trust Expense Agreement*
(8) Form of Expense and Indemnity Agreement*
(9) Form of Debt Securities Subscription Agreement*
(10) Form of ADRs Purchase Contract*
(11) Form of Distribution Trust Agreement*
(l) Opinion and Consent of Brown & Wood LLP, counsel to the Trust**
(m) Not applicable
(n) (1) Tax Opinion and Consent of Sullivan & Cromwell*
(2) Tax Opinion and Consent of PricewaterhouseCoopers Securities
Limited, Australian tax adviser to the Trust**
(3) Consent of Deloitte & Touche LLP, independent auditors for the
Trust*
(o) Not applicable
(p) Form of TrUEPrS Subscription Agreement*
(q) Not applicable
(r) Not applicable
</TABLE>
- --------
* Previously filed.
** Filed herewith.
+ Reference is made to Article III (Section 3.02), Article IV, Article V and
Article VII (Section 7.01 and 7.06) of the Trust's Amended and Restated
Trust Agreement filed as Exhibit (a)(2) to this Registration Statement.
<PAGE>
EXHIBIT 99(A)(2)
SECOND AMENDED AND RESTATED
TRUST AGREEMENT
CONSTITUTING
ANZ EXCHANGEABLE PREFERRED TRUST II
Dated as of November [ ], 1998
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I.
DEFINITIONS
<TABLE>
<S> <C> <C>
Section 1.01. DEFINITIONS.................................................................................. 2
</TABLE>
ARTICLE II.
TRUST DECLARATION; PURPOSES, POWERS AND DUTIES OF THE TRUSTEES;
ADMINISTRATION
<TABLE>
<S> <C> <C>
Section 2.01. NAME...................................................................................... 9
Section 2.02. OFFICE.................................................................................... 9
Section 2.03. RATIFICATION AND APPROVAL OF ACTION OF THE TRUSTEES....................................... 9
Section 2.04. DECLARATION OF TRUST; PURPOSES OF THE TRUST............................................... 9
Section 2.05. GENERAL POWERS AND DUTIES OF THE TRUSTEES................................................. 10
Section 2.06. PORTFOLIO ACQUISITION..................................................................... 11
Section 2.07. PORTFOLIO ADMINISTRATION.................................................................. 12
Section 2.08. LIMITATIONS ON TRUSTEES' POWERS........................................................... 13
</TABLE>
ARTICLE III.
ACCOUNTS AND PAYMENTS
<TABLE>
<S> <C> <C>
Section 3.01. THE TRUST ACCOUNT......................................................................... 13
Section 3.02. DISTRIBUTIONS TO HOLDERS.................................................................. 14
Section 3.03. SEGREGATION............................................................................... 14
Section 3.04. EXPENSES.................................................................................. 14
Section 3.05. APPLICATION OF PAYMENTS UNDER TRUST EXPENSE AGREEMENT AND EXPENSE AND INDEMNITY AGREEMENT. 14
</TABLE>
ARTICLE IV.
REDEMPTION
<TABLE>
<S> <C> <C>
Section 4.01. REDEMPTION................................................................................. 15
</TABLE>
ARTICLE V.
ISSUANCE OF CERTIFICATES; REGISTRY; TRANSFER OF TrUEPrS
<TABLE>
<S> <C> <C>
Section 5.01. FORM OF CERTIFICATE...................................................................... 15
Section 5.02. TRANSFER OF TrUEPrS; ISSUANCE, TRANSFER AND EXCHANGE OF CERTIFICATES..................... 16
Section 5.03. REPLACEMENT OF CERTIFICATES.............................................................. 17
Section 5.04. LIMITATION ON LIABILITY.................................................................. 17
Section 5.05. GENERAL PROVISIONS REGARDING THE TrUEPrS................................................. 17
</TABLE>
i
<PAGE>
ARTICLE VI.
TRUSTEES
<TABLE>
<S> <C> <C>
Section 6.01. TRUSTEES......................................... 18
Section 6.02. VACANCIES........................................ 18
Section 6.03. POWERS........................................... 18
Section 6.04. MEETINGS......................................... 18
Section 6.05. RESIGNATION AND REMOVAL.......................... 19
Section 6.06. LIABILITY........................................ 19
Section 6.07. COMPENSATION..................................... 20
</TABLE>
ARTICLE VII.
MISCELLANEOUS
<TABLE>
<S> <C> <C>
Section 7.01. MEETINGS OF HOLDERS.............................. 20
Section 7.02. BOOKS AND RECORDS; REPORTS....................... 21
Section 7.03. DISSOLUTION...................................... 22
Section 7.04. AMENDMENT AND WAIVER............................. 22
Section 7.05. ACCOUNTANTS...................................... 23
Section 7.06. NATURE OF HOLDER'S INTEREST...................... 24
Section 7.07. NO RECOURSE...................................... 24
Section 7.08. ENFORCEMENT OF RIGHTS............................ 24
Section 7.09. DELAWARE LAW TO GOVERN........................... 25
Section 7.10. NOTICES.......................................... 25
Section 7.11. SEVERABILITY..................................... 25
Section 7.12. COUNTERPARTS..................................... 25
Section 7.13. SUCCESSORS AND ASSIGNS........................... 25
</TABLE>
ii
<PAGE>
SECOND AMENDED AND RESTATED TRUST AGREEMENT
This Second Amended and Restated Trust Agreement, dated as of November
[ ], 1998 (the "Trust Agreement"), by and among ML IBK Positions, Inc., as
sponsor (the "Sponsor"), Donald J. Puglisi, William R. Latham III and James B.
O'Neill, as trustees (the "Trustees"), and the Holders (as defined herein) from
time to time, constituting ANZ Exchangeable Preferred Trust II (the "Trust").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Jamie A. Patinelli, as depositor (the "Depositor"), and the
Trustees, have previously entered into a Trust Agreement dated as of October 13,
1998 (the "Original Agreement"), and the Trustees have filed a Certificate of
Trust, dated as of October 13, 1998, with the office of the Secretary of State
of the State of Delaware on October 13, 1998 and have filed a Restated
Certificate of Trust on November 5, 1998, thus creating ANZ Exchangeable
Preferred Trust II (formerly DEF Exchangeable Preferred Trust);
WHEREAS, on November 6, 1998 the Depositor and the parties to this Trust
Agreement amended and restated the Original Agreement (the "First Restatement");
WHEREAS, the Depositor, simultaneously with the execution of the First
Restatement, transferred all of her right, title and interest in and to ANZ
Exchangeable Preferred Trust II to the Sponsor;
WHEREAS, in the First Restatement the Trustees ratified and approved the
transfer of the interest of the Depositor in ANZ Exchangeable Preferred Trust II
to the Sponsor;
WHEREAS, the Trust, which was previously known as DEF Exchangeable
Preferred Trust, changed its name to ANZ Exchangeable Preferred Trust II
pursuant to a Restated Certificate of Trust that was dated November 4, 1998 and
filed with the Secretary of State of the State of Delaware on November 5, 1998;
WHEREAS, concurrently with the execution and delivery of the First
Restatement, the Trust issued 4,000 Trust Units Exchangeable for Preference
SharesSM ("TrUEPrSSM") to the Sponsor in consideration of the aggregate purchase
price therefor of US$100,000, in satisfaction of the requirements of Section
14(a)(1) under the Investment Company Act (as defined herein);
WHEREAS, the parties hereto desire to amend and restate the First
Restatement in its entirety; and
NOW, THEREFORE, the parties hereto agree to amend and restate the First
Restatement in its entirety as provided herein. Upon the execution and delivery
of counterpart signature pages hereto by the parties hereto, the First
Restatement will be automatically amended and restated in its entirety to read
as provided herein.
- -------------------------------------
/SM/ Service mark of Merrill Lynch & Co., Inc.
<PAGE>
ARTICLE I.
DEFINITIONS
Section 1.01. DEFINITIONS. Whenever used in this Trust Agreement, the
-----------
following words and phrases shall have the meanings listed below. Any reference
to any agreement shall be a reference to such agreement as supplemented or
amended from time to time.
"Administration Agreement" means the Administration Agreement dated as of
the first Issue Date, between the Administrator and the Trust and any substitute
agreement therefor entered into pursuant to Section 2.05(a) hereof.
"Administrator" means The Bank of New York or its successor as permitted
under Section 6.1 of the Administration Agreement or appointed pursuant to
Section 2.05(a) hereof.
"ADRs" means the American Depositary Receipts evidencing the ADSs issued
pursuant to the Deposit Agreement.
"ADRs Purchase Contract" means the ADRs Purchase Contract, dated as of the
first issue date of the ANZ Preference Shares, between the Trust and the Jersey
Subsidiary.
"ADSs" means the American Depositary Shares each of which represents four
ANZ Preference Shares.
"ANZ Affiliate" means ANZMB Limited, a limited liability company
incorporated under the laws of England and Wales and an affiliate of the
Company.
"ANZ Borrower" means any obligor of an ANZ Loan.
"ANZ Borrower's Principal Place of Business" means the city in which the
principal place of business of any ANZ Borrower outside of Australia is located
at the relevant time (which initially shall be Wellington, New Zealand).
"ANZ Loan" means (i) any loan by the Distribution Trust of the proceeds of
any Capital Contribution made under the Distribution Trust Agreement and (ii)
any loan replacing a loan referred to in clause (i) in whole or in part, each of
which matures on or about January 15, 2053 (unless extended by the parties
thereto).
"ANZ Loan Agreement" means each agreement between the Distribution Trust
and an ANZ Borrower pursuant to which an ANZ Loan is made.
"ANZ Preference Shares" means the fully paid preference shares, liquidation
preference US$6.25 per share, issued by the Company and designated as the 1998
Preference Shares (Series 2), and any other securities issued in exchange or
substitution for, or as a distribution on or otherwise in respect of, such
shares, whether by or as a result of a recapitalization, split, combination,
reclassification or scheme of arrangement or otherwise.
"APRA" means the Australian Prudential Regulation Authority, or any
successor or replacement body to which the Company is required to report the
capital adequacy ratios referred to in the definition of Exchange Event.
2
<PAGE>
"Business Day" means each Monday, Tuesday, Wednesday, Thursday or Friday
which is not a day on which banking institutions in Sydney, Australia, New York,
New York or any ANZ Borrower's Principal Place of Business are authorized or
obliged by law or executive order to close.
"Capital Contribution" has the meaning set forth in the Distribution Trust
Agreement.
"Certificate" means any certificate evidencing the ownership of TrUEPrS
substantially in the form of Exhibit A1 or A2 hereto.
"Closing Time" has the meaning specified in the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time; each reference herein to any section of the Code or any regulation
thereunder shall constitute a reference to any successor provision thereto.
"Collateral Agent" means The Bank of New York or its successor as permitted
under the Security and Pledge Agreements or appointed pursuant to Section
2.05(a) hereof.
"Commission" means the United States Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Trust Agreement such Commission is not existing or
performing the duties now assigned to it, then the body performing such duties
on such date.
"Company" means Australia and New Zealand Banking Group Limited, a
corporation organized under the laws of the State of Victoria, Commonwealth of
Australia, or any surviving entity or subsequent surviving entity of the
Company.
"Custodian" means The Bank of New York or its successor as permitted under
Section 11 of the Custodian Agreement or appointed pursuant to Section 2.05(a)
hereof.
"Custodian Agreement" means the Custodian Agreement, dated as of November
6, 1998, between the Custodian and the Trust and any substitute agreement
therefor entered into pursuant to Section 2.05(a) hereof.
"Date of Delivery" has the meaning specified in the Purchase Agreement.
"Debt Securities" means the Mandatorily Redeemable Debt Securities due 2048
issued by the U.K. Company.
"Debt Securities Subscription Agreement" means the Debt Securities
Subscription Agreement between the Trust and the U.K. Company as amended
pursuant to the terms thereof.
"definitive Certificate" means a Certificate in the form of Exhibit A-2
hereto, which shall be issued to Holders other than DTC or its nominee.
"Deposit Agreement" means a deposit agreement, dated as of the first issue
date of the ANZ Preference Shares, between the Company and The Bank of New York
or its successor, as depositary for the ANZ Preference Shares (the
"Depositary").
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"Depositor" has the meaning specified in the recitals hereof.
"Distribution Trust" means the business trust established under the laws of
the State of Delaware pursuant to the Distribution Trust Agreement.
"Distribution Trust Agreement" means the distribution trust agreement among
the U.K. Company, the depositor, the distribution trustees, the administrators
thereof and the ANZ Australian Affiliate named therein.
"Dividend Payment Date" means January 15, April 15, July 15 and October 15
of each year, commencing January 15, 1999.
"DTC" means The Depository Trust Company or any successor thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time; each reference herein to any section of such Act or any rule or
regulation thereunder shall constitute a reference to any successor provision
thereto.
"Exchange Date" is the date specified as such with respect to any
particular Exchange Event in the definition thereof.
"Exchange Event" means the earliest to occur of any of the following dates
or events, which shall constitute an "Exchange Event" as of the "Exchange Date"
specified below:
(i) January 15, 2048 or the date of any earlier redemption or mandatory
repurchase ("Buy-Back") of the ANZ Preference Shares for cash, in
which case the Exchange Date will be the earlier of such dates;
(ii) any date selected by the Company in its absolute discretion, in
which case the Exchange Date will be such date;
(iii) the failure of the Trust to receive for any reason on or within
three Business Days after an Interest Payment Date the interest then
due on the Debt Securities in full without deduction or withholding
for any taxes, duties or other charges, in which case the Exchange
Date will be the fourth Business Day following such Interest Payment
Date;
(iv) the Tier 1 Capital Ratio or the Total Capital Adequacy Ratio of the
Company (either as reported quarterly by the Company to APRA or as
determined at any time by APRA in its absolute discretion) is below
4% or 8%, respectively, or, in each case, such lesser percentage as
may be prescribed by APRA for the Company at the time (the
applicable percentage in each such case being the "Required
Percentage"), and is not increased by the Company to at least the
Required Percentage within 90 days after the date on which the
Company makes such quarterly report or receives notice from APRA of
such determination by APRA, as applicable, in which case the
Exchange Date will be the Business Day immediately following the
expiration of such 90-day period;
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(v) any change in (A) the legal ownership of the securities (other than
the Debt Securities) issued by, (B) any provision of the constituent
documents of (unless such change has been consented to by the record
holders of more than 50% of the TrUEPrS or, in the opinion of
competent legal counsel selected by the Trust, such change would not
have a material adverse effect on the rights of the holders of the
TrUEPrS), or (C) the business purpose (or, solely with respect to
the Jersey Charitable Trust, the powers of the trustees thereof) (as
specified in the constituent documents) of, any of the U.K. Company,
the Jersey Holding Company, the Jersey Charitable Trust or the
Jersey Subsidiary, in which case the Exchange Date will be the date
on which the change occurs;
(vi) any change in the business purpose of the Distribution Trust (as
specified in the constituent documents), in which case the Exchange
Date will be the date on which the change occurs;
(vii) the common securities of the Distribution Trust cease to be wholly-
owned by the Company or a direct or indirect wholly-owned subsidiary
or branch of the Company, in which case the Exchange Date will be
the date on which the common securities of the Distribution Trust
cease to be wholly-owned by the Company or a direct or indirect
wholly-owned subsidiary or branch of the Company;
(viii) any ANZ Borrower ceases to be the Company or a direct or indirect
wholly-owned subsidiary or branch of the Company, in which case the
Exchange Date will be the date on which such ANZ Borrower ceases to
be the Company or a direct or indirect wholly-owned subsidiary or
branch of the Company;
(ix) (A) a proceeding is commenced by the Company, the U.K. Company, the
Jersey Holding Company, the Jersey Charitable Trust, the Jersey
Subsidiary, the Distribution Trust or any ANZ Borrower (each, a
"Relevant Entity") or a person that controls such Relevant Entity
for an order that such Relevant Entity be wound up or for the
appointment of a provisional liquidator, liquidator, administrator,
controller or similar official in respect of such Relevant Entity or
all or substantially all of its property, in which case the Exchange
Date will be the date on which the proceeding is filed; (B) a
proceeding is commenced by any other person for an order that a
Relevant Entity be wound up or for the appointment of a provisional
liquidator, liquidator, administrator, controller or similar
official in respect of such Relevant Entity or all or substantially
all of its property (unless such proceeding is discontinued or
dismissed within 21 days of its having been filed), in which case
the Exchange Date will be the Business Day immediately following the
expiration of such 21-day period; (C) a provisional liquidator,
liquidator, administrator, controller or similar official is
appointed whether by a court or otherwise in respect of any Relevant
Entity or all or substantially all of its property (unless any such
appointment is revoked or set aside within 21 days of such
appointment), in which case the Exchange Date will be the Business
Day immediately following the expiration of such 21-day period; or
(D) the Trust dissolves in accordance with the terms hereof or for
any other
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reason, in which case the Exchange Date will be the Business Day
immediately preceding the effective date of such dissolution; and
(x) the Collateral Agent fails, at any time, to have a valid first,
perfected and enforceable security interest in, and lien on, the
Jersey Preference Shares and the ADRs, and any redemption proceeds
from any of the foregoing, and such failure is not remedied on or
before ten Business Days after written notice of such failure is
given to the U.K. Company or the Jersey Subsidiary, as the case may
be, by the Collateral Agent as contemplated by the Security and
Pledge Agreements, in which case the Exchange Date will be the
Business Day immediately following the expiration of such ten
Business Day period.
Notwithstanding the foregoing, any ANZ Borrower may, with the consent of
the Distribution Trust, assign its ANZ Loan or the Distribution Trust may
replace any ANZ Loan with another loan, in each case, to the Company or to one
or more direct or indirect wholly-owned subsidiaries or branches of the Company
with prospective payment terms identical to, and other terms substantially the
same as, those of such ANZ Loan, in which case the Company or such other
subsidiary or branch and loan will be deemed to be such ANZ Borrower and such
ANZ Loan, respectively, and any such action will not constitute an Exchange
Event.
"Exchange Rate Condition" means, in connection with any Exchange Event
resulting from the redemption or Buy-Back of the ANZ Preference Shares for cash,
that the value, for purposes of calculating United Kingdom tax on capital gains,
of one U.S. dollar (or the equivalent thereof in any successor legal currency of
the United States) in terms of British pounds (or the equivalent thereof in any
successor legal currency of the United Kingdom) (expressed in (Pounds)/US$) (the
"Dollar Value") on the Exchange Date with respect to such Exchange Event is less
than or equal to the Dollar Value on every date on which ANZ Preference Shares
are issued.
"Expense and Indemnity Agreement" means the Expense and Indemnity
Agreement, dated as of the first issue date of the ANZ Preference Shares, among
the Trust, the ANZ Affiliate, the U.K. Company, the Jersey Subsidiary, the
Jersey Holding Company and the Jersey Charitable Trust as amended pursuant to
the terms thereof.
"global Certificate" shall mean a Certificate in the form of Exhibit A-1
hereto, which shall be issued only to DTC or its nominee.
"Holder" means the person in whose name any TrUEPrS are recorded on the
register maintained by the Paying Agent.
"Interest Payment Date" means January 15, April 15, July 15 and October 15
of each year, commencing January 15, 1999.
"Interest Portion" shall have the meaning set forth in the Debt Securities.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time; each reference herein to any section of such Act or
any rule or regulation thereunder shall constitute a reference to any successor
provision thereto.
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"Issue Date" means, collectively, each original issue date of the TrUEPrS.
"Jersey Charitable Trust" means Aldobrandini Charitable Trust, a charitable
trust established under the laws of, and domiciled in, Jersey, the Channel
Islands.
"Jersey Holding Company" means Aldobrandini (Holdings) Limited, an exempt
company established under the laws of, and domiciled in, Jersey, the Channel
Islands.
"Jersey Preference Shares" means the fully paid, non-dividend paying
preference shares, liquidation preference US$25 per share, issued by the Jersey
Subsidiary.
"Jersey Subsidiary" means Aldobrandini (Investments) Limited, a company
incorporated with limited liability under the laws of, and domiciled in, Jersey,
the Channel Islands.
"License Agreement" means the License Agreement, dated as of November 6,
1998, between the Company and the Trust, as amended pursuant to the terms
thereof.
"Managing Trustee" means the Trustee designated the Managing Trustee by
resolution of the Trustees.
"Original Agreement" has the meaning specified in the recitals hereof.
"Paying Agent" means The Bank of New York or its successor as permitted
under Section 6.6 of the Paying Agent Agreement or appointed pursuant to Section
2.05(a) hereof.
"Paying Agent Agreement" means the Paying Agent Agreement, dated as of the
first issue date of the ANZ Preference Shares, between the Paying Agent and the
Trust and any substitute agreement therefor entered into pursuant to Section
2.05(a) hereof.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency or instrumentality thereof or any other
entity whatsoever.
"Prospectus" means the prospectus of the Trust relating to the offering of
the TrUEPrS and constituting a part of the Registration Statement, as first
filed with the Commission pursuant to Rule 497(h) under the Securities Act, and
as subsequently amended or supplemented by the Trust.
"Purchase Agreement" means the Purchase Agreement among the Trust, the
Company and the Underwriters named therein relating to the issue and sale of the
TrUEPrS, as described in the Prospectus.
"Qualifying Exchange Event" shall have the meaning set forth in Section
2.06(a).
"Record Date" means, with respect to each Dividend Payment Date, the
January 1, April 1, July 1 or October 1, as the case may be, immediately
preceding such Dividend Payment Date.
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"Registration Statement" means the Registration Statement on Form N-2
(Registration Nos. 333-65849 and 811-09069) of the Trust, as amended.
"Securities Act" means the Securities Act of 1933, as amended from time to
time; each reference herein to any section of such Securities Act or any rule or
regulation thereunder shall constitute a reference to any successor provision
thereto.
"Security and Pledge Agreements" means, collectively, the ADRs Security and
Pledge Agreement, dated as of the first issue date of the ANZ Preference Shares,
among the Trust, the U.K. Company, the Jersey Subsidiary and the Collateral
Agent, securing the respective obligations of the U.K. Company under the Debt
Securities and the Jersey Subsidiary under the Jersey Preference Shares and the
ADRs Purchase Contract, and the Jersey Preference Shares Security and Pledge
Agreement, dated as of the first issue date of the ANZ Preference Shares, among
the Trust, the U.K. Company and the Collateral Agent, securing the obligations
of the U.K. Company under the Debt Securities, each as amended pursuant to the
terms thereof.
"Sponsor" has the meaning specified in the introductory paragraph hereof.
"Support Agreement" means the support agreement, dated as of the first
issue date of the ANZ Preference Shares, between the Company and the ANZ
Affiliate.
"Tier 1 capital" means capital which is regarded as "tier 1 capital" for
the purposes of the capital adequacy guidelines of APRA.
"Tier 1 Capital Ratio" means the ratio of Tier 1 capital to risk weighted
assets (on a consolidated group basis) prescribed by APRA in its capital
adequacy guidelines for Australian banks, as modified from time to time.
"Total Capital Adequacy Ratio" means the total capital adequacy ratio as
prescribed by APRA in its capital adequacy guidelines for Australian banks, as
modified from time to time.
"TrUEPrS" means Trust Units Exchangeable for Preference Shares, each
representing a Holder's proportionate share of an undivided beneficial interest
in the assets of the Trust and right to receive a pro rata portion of any
distribution upon the occurrence of an Exchange Event or the payment of any non-
cumulative dividends on the TrUEPrS.
"TrUEPrS Subscription Agreement" means the TrUEPrS Subscription Agreement,
dated as of November 6, 1998, between the Trust and the Sponsor, as amended
pursuant to the terms thereof.
"Trust" has the meaning specified in the introductory paragraph hereof.
"Trust Account" means the non-interest bearing account created pursuant to
Section 3.01 hereof.
"Trust Estate" means (i) the Debt Securities and any distributions thereon
and redemption proceeds therefrom, (ii) the Jersey Preference Shares, if any,
purchased by the Trust pursuant to the terms of the Debt Securities and the
redemption proceeds therefrom, (iii) the
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ADRs Purchase Contract and (iv) the ADSs, if any, purchased by the Trust
pursuant to the terms of the ADRs Purchase Contract, in each case held at any
time by the Trust.
"Trust Expense Agreement" means the Trust Expense Agreement, dated as of
the first issue date of the ANZ Preference Shares, between The Bank of New York,
as Administrator, Custodian and Paying Agent of the Trust, and the Jersey
Holding Company, as amended pursuant to the terms thereof.
"Trust Reimbursement Agreement" means the Trust Reimbursement Agreement,
dated as of the first issue date of the ANZ Preference Shares, between the Trust
and Merrill Lynch & Co., Inc., as amended pursuant to the terms thereof.
"Trustees" has the meaning specified in the introductory paragraph hereof.
"U.K. Company" means Aldobrandini (UK) Company, a special purpose unlimited
company incorporated under the laws of England and Wales and domiciled in the
United Kingdom.
"Underwriters" means the several Underwriters named in the Purchase
Agreement.
ARTICLE II.
TRUST DECLARATION; PURPOSES, POWERS
AND DUTIES OF THE TRUSTEES; ADMINISTRATION
Section 2.01. NAME. The Trust is named ANZ Exchangeable Preferred Trust II,
----
as such name may be modified from time to time by the Trustees following written
notice to the Holders. The Trust's activities may be conducted under the name of
the Trust or any other name deemed advisable by the Trustees.
Section 2.02. OFFICE. The address of the principal office of the Trust is
------
c/o Puglisi & Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19715.
On ten Business Days' written notice to the Holders the Trustees may designate
another principal office.
Section 2.03. RATIFICATION AND APPROVAL OF ACTION OF THE TRUSTEES. The
---------------------------------------------------
Sponsor hereby ratifies and approves any and all actions taken by the Trustees
on behalf of the Trust on or prior to the date hereof in connection with the
registration of the Trust under the Investment Company Act, in connection with
the registration of the offer and sale of the TrUEPrS under the Securities Act,
or otherwise incident to, or connected with, or necessary to accomplish, the
foregoing or the offer and sale of the TrUEPrS by the Underwriters and the
operation of the Trust as described in the Prospectus.
Section 2.04. DECLARATION OF TRUST; PURPOSES OF THE TRUST. The Sponsor
-------------------------------------------
hereby creates the Trust solely so that it may issue and sell the TrUEPrS to the
Sponsor and the Underwriters, invest all the proceeds from each such sale in an
equivalent principal amount of the Debt Securities issued by the U.K. Company,
hold the Trust Estate in trust for the use and benefit of all present and future
Holders and otherwise carry out the terms and conditions of this Trust
Agreement, all for the purpose of achieving the investment objectives set forth
in the Prospectus. The Trustees hereby declare that they will accept and hold
the Trust Estate for
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the use and benefit of all present and future Holders. The Depositor has
heretofore deposited with the Trustees the sum of US$1 to accept and hold in
trust hereunder until the issuance and sale of the TrUEPrS to the Underwriters,
whereupon such sum shall be donated to an organization satisfying the
requirements of Section 170(c)(2) of the Code selected by unanimous consent of
the Trustees.
Section 2.05. GENERAL POWERS AND DUTIES OF THE TRUSTEES. In furtherance of
-----------------------------------------
the provisions of Section 2.04 hereof, the Sponsor authorizes and directs the
Trustees, in the name and on behalf of the Trust:
(a) to enter into and perform, or cause the Administrator to enter into
and perform, (and, in accordance with Section 7.04(c) hereof, amend) the
Security and Pledge Agreements, the Purchase Agreement, the Expense and
Indemnity Agreement, the Custodian Agreement, the Administration Agreement, the
Paying Agent Agreement, the Trust Reimbursement Agreement, the Trust Expense
Agreement, the TrUEPrS Subscription Agreement, the Debt Securities Subscription
Agreement, the ADRs Purchase Contract and the License Agreement and to perform
all obligations of the Trust (including the obligation to provide indemnity
hereunder and thereunder) and enforce all rights and remedies of the Trust under
each of such agreements, the Debt Securities and the Support Agreement; and if
any of such agreements terminates or the agent of the Trust thereunder resigns
or is discharged, to appoint a substitute agent and enter into a new agreement
with such substitute agent containing provisions substantially similar to those
contained in the agreement being terminated; provided that in any such new
agreement (i) the Custodian and the Paying Agent shall each be a commercial bank
or trust company organized and existing under the laws of the United States of
America or any state therein, shall have full trust powers and shall have
minimum capital, surplus and retained earnings of not less than US$100,000,000;
and (ii) the Administrator and the Collateral Agent shall each be a reputable
financial institution eligible and qualified in all respects to carry out its
obligations under the Administration Agreement or the Security and Pledge
Agreements, as the case may be;
(b) to hold the Trust Estate in trust, to create and administer the
Trust Account, to direct payments received by the Trust to the Trust Account and
to make payments out of the Trust Account as set forth in Article III hereof;
(c) to issue and sell to (i) the Underwriters an aggregate of up to
____________ TrUEPrS (including those TrUEPrS subject to the over-allotment
option of the Underwriters provided for in the Purchase Agreement) pursuant to
the Purchase Agreement and as contemplated by the Prospectus and (ii) the
Sponsor an aggregate of 4,000 TrUEPrS pursuant to the TrUEPrS Subscription
Agreement;
(d) to select and, subject to the provisions of Section 7.05 hereof, to
engage independent public accountants;
(e) to select and engage legal counsel and, to the extent required by
Section 2.07 hereof, to engage professional advisors and pay reasonable
compensation thereto;
(f) to defend any action commenced against the Trustees or the Trust
and to prosecute any action which the Trustees deem necessary to protect the
Trust and the rights and interests of Holders, and to pay the costs thereof;
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(g) to delegate any or all of its powers and duties hereunder as
contemplated by the Custodian Agreement, the Paying Agent Agreement and the
Administration Agreement, in each case to the extent permitted by applicable
law;
(h) to adopt the fundamental policies set forth in the Prospectus, to
adopt and amend by-laws, and to take any and all such other actions as necessary
or advisable to carry out the purposes of the Trust, subject to the provisions
hereof and applicable law, including, without limitation, the Investment Company
Act;
(i) to arrange for the bonding of officers and employees of the Trust
if and as required by Section 17(g) of the Investment Company Act and the rules
and regulations thereunder;
(j) to prepare, execute and file with the New York Stock Exchange an
application for listing thereon of the TrUEPrS; to prepare, execute and file any
and all amendments, certificates, documents or letters to such listing as the
Trustees deem appropriate; and to enter into other agreements that are necessary
to effect such listing;
(k) whenever the holder of the ADRs, the ANZ Preference Shares or the
Jersey Preference Shares is entitled to vote on any matter, to perform such
acts, including without limitation, calling a special meeting of Holders,
obtaining Holders' consents and obtaining Holders' instructions, as necessary or
required for purposes of Section 7.01;
(l) to prepare, execute and file, and make related payments, with the
National Association of Securities Dealers, Inc. (the "NASD") in accordance with
Rule 2710 of the rules of conduct of the NASD and to prepare, execute and file
any and all amendments, certificates, documents, certificates, documents or
letters to such listing as the Trustees deem appropriate;
(m) to set up a special pricing committee (the "Special Pricing
Committee"), which committee shall consist of one of the Trustees and shall have
the authority to approve and set the final offering price per TrUEPrS and all
other final terms of the offering of the TrUEPrS; and
(n) to perform all other acts which are necessary and incidental to
carrying out the aforementioned powers.
Section 2.06. PORTFOLIO ACQUISITION. In furtherance of the provisions of
---------------------
Section 2.04 hereof, the Sponsor further specifically authorizes and directs the
Trustees, acting in the name and on behalf of the Trust:
(a) to use all the proceeds from the sale of the TrUEPrS on each Issue
Date pursuant to the TrUEPrS Subscription Agreement and the Purchase Agreement
to subscribe for and purchase on such Issue Date from the U.K. Company Debt
Securities with an aggregate principal amount equal to such proceeds and (1)
upon the occurrence of an Exchange Event (other than an Exchange Event resulting
from the redemption or Buy-Back of the ANZ Preference Shares for cash with
respect to which the Exchange Rate Condition is satisfied (a "Qualifying
Exchange Event")) to (A) apply the cash proceeds or the right of the Trust to
receive the cash proceeds payable upon the redemption of the Debt Securities
(other than the Interest Portion thereof, if any) to purchase from the U.K.
Company, subject to and in accordance with
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the terms and conditions of the Debt Securities, as soon as possible on the
Exchange Date, Jersey Preference Shares owned by the U.K. Company with an
aggregate stated liquidation value equal to the aggregate principal amount of
Debt Securities so redeemed and (B) distribute the Interest Portion, if any, of
such cash redemption proceeds to Holders in accordance with Section 2.07(b)
hereof, and (2) upon the occurrence of a Qualifying Exchange Event, to
distribute the cash proceeds from the redemption of the Debt Securities to
Holders in accordance with Section 2.07(b) hereof;
(b) to enter into the ADRs Purchase Contract and upon the occurrence of
any Exchange Event other than a Qualifying Exchange Event, (1) if the Exchange
Event does not result from the redemption or Buy-Back of the ANZ Preference
Shares for cash, to (A) apply the cash proceeds or the right of the Trust to
receive the cash proceeds payable upon the redemption of the Jersey Preference
Shares acquired as contemplated in Section 2.06(a)(1) to purchase, in accordance
with and subject to the terms and conditions of the ADRs Purchase Contract, ADSs
representing the ANZ Preference Shares owned by the Jersey Subsidiary with an
aggregate liquidation value equal to the aggregate liquidation value of the
Jersey Preference Shares so redeemed, as soon as possible on the Exchange Date,
and (B) to distribute the ADSs so purchased to Holders in accordance with
Section 2.07(a) hereof, or (2) if the Exchange Event results from the redemption
or Buy-Back of the ANZ Preference Shares for cash and the Exchange Rate
Condition is not satisfied with respect to such Exchange Event, to distribute
the cash proceeds from the redemption of the Jersey Preference Shares to Holders
in accordance with Section 2.07(b) hereof.
Section 2.07. PORTFOLIO ADMINISTRATION. In furtherance of the provisions of
------------------------
Section 2.04 hereof, the Sponsor further specifically authorizes and directs the
Trustees:
(a) DISTRIBUTION OF ADSs UPON THE OCCURRENCE OF AN EXCHANGE EVENT. To
distribute ADSs, if any, to the Holders as soon as possible after they are
received by the Trust pursuant to the ADRs Purchase Contract as follows:
(i) if the TrUEPrS are evidenced by one or more global
Certificates and the ADSs received by the Trust are to be evidenced by one or
more global Certificates, then such ADSs will be delivered to, and registered in
the name of, DTC or its nominee for the benefit of the beneficial owners of
interests in the TrUEPrS;
(ii) if the TrUEPrS are evidenced by one or more global
Certificates and the ADSs received by the Trust are to be in the form of
definitive Certificates, then such ADSs will be delivered to, and registered in
the name of, such persons and at such addresses as DTC or its nominee shall
direct in writing; or
(iii) if the TrUEPrS are evidenced by definitive Certificates and
the ADSs received by the Trust are to be in the form of definitive Certificates,
then such ADSs will be delivered to, and registered in the name of, the Holders
at their respective addresses set forth in the register maintained by the Paying
Agent.
The Trust may require the Holders to pay a sum sufficient to cover any tax or
other governmental charges that may be imposed with respect to any such
distribution.
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(b) DISTRIBUTION OF CASH UPON THE OCCURRENCE OF AN EXCHANGE EVENT. If
the Exchange Event is the redemption or Buy-Back of the ANZ Preference Shares
for cash, to distribute to the Holders as soon as possible after receipt by the
Trust, the cash distributable to Holders upon the redemption of the Debt
Securities and/or the Jersey Preference Shares pursuant to Sections
2.06(a)(1)(B), 2.06(a)(2) and/or 2.06(b)(2) on the basis of US$25 per TrUEPrS
plus accrued interest thereon from and including the last Interest Payment Date
immediately preceding the Exchange Date to but excluding the Exchange Date. The
Trust may require the Holders to pay a sum sufficient to cover any tax or other
governmental charges that may be imposed with respect to any such distribution.
(c) RECORD DATE. The distributions described in paragraphs (a) and (b)
shall be made to Holders of record as of the opening of business on the Exchange
Date.
Section 2.08. LIMITATIONS ON TRUSTEES' POWERS. The Trustees, acting in the
-------------------------------
name and on behalf of the Trust, are not permitted:
(a) to purchase or hold any securities, instruments or other property
except for the Trust Estate;
(b) to dispose of the Trust Estate other than the distributions
provided for in Sections 2.06, 2.07 and 3.02;
(c) to issue any securities or instruments other than the TrUEPrS sold
to the Sponsor and to be sold pursuant to the Purchase Agreement upon full
payment therefor as provided therein, or issued in accordance with Section 5.02
or 5.03;
(d) to make short sales or purchases on margin;
(e) to write put or call options;
(f) to borrow money;
(g) to underwrite securities;
(h) to purchase or sell real estate, commodities or commodities
contracts;
(i) to purchase restricted securities;
(j) to make loans;
(k) to take any action, or direct or permit the Administrator, the
Paying Agent or the Custodian to take any action, that would vary the investment
of the Holders within the meaning of Treasury Regulation Section 301.7701-4(c),
or otherwise take any action or direct or permit any action to be taken that
would or could cause the Trust not to be a "grantor trust" under the Code; or
(l) to take any other action not specifically authorized by
Section 2.05.
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ARTICLE III.
ACCOUNTS AND PAYMENTS
Section 3.01. THE TRUST ACCOUNT. The Trustees shall, upon issuance of the
-----------------
TrUEPrS, establish with the Paying Agent an account to be called the "Trust
Account". All moneys received by the Trustees in respect of the Debt Securities
and the Jersey Preference Shares, and all moneys received from the sale of the
TrUEPrS to the Sponsor, shall be credited to the Trust Account, which shall be
non-interest bearing.
Section 3.02. DISTRIBUTIONS TO HOLDERS. On each Dividend Payment Date the
------------------------
Trustees shall distribute to each Holder of record at the close of business on
the immediately preceding Record Date, at the post office address of the Holder
appearing on the register maintained by the Trust or the Paying Agent or by any
other means mutually agreed upon by the Holder and the Trustees, non-cumulative
dividend distributions to be payable quarterly in arrears. If any Dividend
Payment Date is not a Business Day, then (notwithstanding any other provision
herein) payment of dividends otherwise payable on such Dividend Payment Date
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the Dividend Payment Date. On
and after an Exchange Date, dividends on the TrUEPrS shall cease to accrue and
accrued but unpaid dividends on the TrUEPrS shall no longer be payable; provided
that the foregoing shall not affect the obligation to make the distributions
provided for in Sections 2.06 and 2.07.
Section 3.03. SEGREGATION. All moneys and other assets deposited or
-----------
received by the Trustees hereunder shall be held by them in trust as part of the
Trust Estate until required to be disbursed or otherwise disposed of in
accordance with the provisions of this Trust Agreement, and the Trustees shall
handle such moneys and other assets in such manner as shall constitute the
segregation and holding in trust within the meaning of the Investment Company
Act.
Section 3.04. EXPENSES. The organization costs of the Trust and the costs
--------
associated with the initial registration and offering of the TrUEPrS will be
paid by the Administrator on behalf of the Trust out of the facility fee to be
paid to the Trust by the U.K. Company in connection with the investment by the
Trust in the Debt Securities. Any such expenses paid by Merrill Lynch & Co.,
Inc. shall be reimbursed by the Administrator on behalf of the Trust pursuant to
the Trust Reimbursement Agreement. Certain ongoing expenses of the Trust such as
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 Administrator, the Custodian and the Paying Agent, fees
and expenses of the Trustees, accounting costs, brokerage costs, litigation,
mailing and other expenses properly payable by the Trust will be paid by the
Administrator out of funds to be provided to the Administrator on behalf of the
Trust by the Jersey Holding Company pursuant to the Trust Expense Agreement.
Expenses of the Trust not covered by the Trust Expense Agreement and that are
reasonably related to the conduct of its business consistent with the provisions
of Article II hereof will be paid by the Administrator on behalf of the Trust
out of funds, if any, paid by the ANZ Affiliate pursuant to the Expense and
Indemnity Agreement. In no event shall any expenses of the Trust be payable out
of the Trust Estate.
Section 3.05. APPLICATION OF PAYMENTS UNDER TRUST EXPENSE AGREEMENT AND
---------------------------------------------------------
EXPENSE AND INDEMNITY AGREEMENT. To the extent the
- -------------------------------
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Administrator, on behalf of the Trust, receives money under the Expense and
Indemnity Agreement, the Debt Securities Subscription Agreement or the Trust
Expense Agreement, pending the use of such money by the Administrator to pay the
Trust's expenses under this Agreement, the Administration Agreement, the
Custodian Agreement, the Paying Agent Agreement or the Debt Securities
Subscription Agreement or any of its other expenses, such money shall be
deposited and held in a non-interest bearing account maintained by the
Administrator that is separate from the Trust Account. Upon dissolution of the
Trust, any money held in such account, less any expenses of the Trust, shall be
paid to the ANZ Affiliate pursuant to the Expense and Indemnity Agreement as an
Additional Indemnity Fee (as defined in such agreement).
ARTICLE IV.
REDEMPTION
Section 4.01. REDEMPTION. The Trustees shall have no right or obligation to
----------
redeem TrUEPrS.
ARTICLE V.
ISSUANCE OF CERTIFICATES;
REGISTRY; TRANSFER OF TrUEPrS
Section 5.01. FORM OF CERTIFICATE. Each Certificate evidencing TrUEPrS
-------------------
shall be executed manually or by facsimile by the Managing Trustee and
countersigned manually by the Paying Agent in substantially the form of Exhibit
A hereto with the blanks appropriately filled in, shall be dated the date on
which they are countersigned and delivered by the Paying Agent and shall
represent a fractional undivided interest in the assets of the Trust, the
numerator of which fraction shall be the number of TrUEPrS set forth on the face
of such Certificate and the denominator of which shall be the total number of
TrUEPrS outstanding at that time. All TrUEPrS shall be issued in registered form
and shall be numbered serially. Certificates bearing the manual or facsimile
signatures of any individual who was at any time the Managing Trustee shall bind
the Trust, notwithstanding that such individual ceased to hold such office prior
to the countersignature and delivery of such Certificates or did not hold such
position at the date of such Certificates. No Certificate shall be entitled to
any benefits hereunder or be valid or obligatory for any purpose unless such
Certificate shall have been countersigned by the Paying Agent as provided above,
and such countersignature upon any Certificate shall be conclusive evidence, and
the only evidence, that such Certificate has been duly countersigned and
delivered hereunder. Pending the preparation of definitive Certificates, the
Trustees may execute and the Paying Agent shall countersign and deliver
temporary Certificates (printed, lithographed, typewritten or otherwise
reproduced, in each case in form satisfactory to the Paying Agent). The
Certificates to be delivered to the Underwriters pursuant to the Purchase
Agreement will be issued in the form of a global Certificate or Certificates
evidencing the TrUEPrS to be issued to the Underwriters, which will be delivered
to DTC or its nominee by or on behalf of the Trust. Such global Certificate or
Certificates shall initially be registered on the register maintained by the
Paying Agent in the name of Cede & Co., the nominee of DTC, and no beneficial
owner of an interest in such TrUEPrS will receive a definitive Certificate
representing such beneficial owner's interest in such TrUEPrS, except as
provided in the next paragraph. Unless and until
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definitive Certificates have been issued pursuant to the next paragraph, the
Trust shall be entitled to deal with DTC for all purposes of this Agreement as
the Holder and the sole Holder of the Certificates and shall have no obligation
to the beneficial owners of interest therein, and neither the Trust, the
Trustees, the Paying Agent nor any agent of any of the foregoing shall have any
liability with respect to or responsibility for the records of DTC or its
participants.
If DTC elects to discontinue its services as securities depository, then
definitive Certificates shall be prepared by the Trust. Upon surrender of the
global Certificate or Certificates and accompanied by registration instructions
from DTC, the Trustees shall cause definitive Certificates to be registered in
the names and delivered to the persons set forth in DTC's instructions. Neither
the Trustees, the Trust, the Paying Agent nor any agent of any of the foregoing
shall be liable for any delay by DTC in delivering such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions.
Temporary Certificates shall be issuable as registered Certificates
substantially in the form of the definitive Certificates but with such
omissions, insertions and variations as may be appropriate for temporary
Certificates, all as may be determined by the Trustees. Every temporary
Certificate shall be executed by the Managing Trustee and be countersigned by
the Paying Agent upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Certificates. Without unreasonable
delay the Managing Trustee shall execute and shall furnish definitive
Certificates and thereupon temporary Certificates may be surrendered in exchange
therefor without charge at each office or agency of the Paying Agent and the
Paying Agent shall countersign and deliver in exchange for such temporary
Certificates definitive Certificates for a like aggregate number of TrUEPrS.
Until so exchanged, the temporary Certificates shall be entitled to the same
benefits hereunder as definitive Certificates.
Section 5.02. TRANSFER OF TrUEPrS; ISSUANCE, TRANSFER AND EXCHANGE OF
-------------------------------------------------------
CERTIFICATES. The registration and registration of transfer of TrUEPrS will be
- ------------
made in the register maintained by the Paying Agent for such purpose. Subject
to the satisfaction of any conditions imposed by applicable law, TrUEPrS may be
transferred by the Holder thereof by presentation and surrender of Certificates
at the office of the Paying Agent, accompanied by such documents as the Paying
Agent deems necessary to evidence the legality of the transfer. Certificates
issued pursuant to this Trust Agreement are exchangeable for one or more other
Certificates evidencing an equal aggregate number of TrUEPrS as may be requested
by the Holder. All Certificates shall be issued in denominations of one TrUEPrS
or any multiple thereof. All Certificates issued upon any registration of
transfer or exchange shall evidence the same fractional undivided interest in
the assets of the Trust, and be entitled to the same benefits, as the
Certificates surrendered upon such registration of transfer or exchange.
Prior to the due presentment for registration of transfer, the Paying Agent
may deem and treat the person in whose name any TrUEPrS shall be registered in
the register maintained by the Paying Agent as the owner of such TrUEPrS for all
purposes hereunder and neither the Trust, the Trustees, the Paying Agent nor any
agent of any of the foregoing shall be affected by any notice to the contrary.
The transfer books maintained by the Paying Agent for the purposes of this
Section 5.02 shall include the name and address of the record owners of the
TrUEPrS and shall be closed in connection with the dissolution of the Trust
pursuant to Section 7.03 hereof. A sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such exchange or
transfer shall be paid to the Paying Agent by the Holder. A Holder may be
16
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required to pay a fee for each new Certificate to be issued pursuant to this
paragraph in such amount as may be specified by the Paying Agent and approved by
the Trustees. All Certificates surrendered for registration of transfer or
exchange shall be promptly cancelled by the Paying Agent. No Certificates shall
be countersigned in lieu of or in exchange for any Certificates cancelled as
provided in this Section, except as expressly permitted by this Agreement. All
Certificates cancelled pursuant to this Trust Agreement may be voided by the
Paying Agent in accordance with the usual practice of the Paying Agent or in
accordance with the instructions of the Trustees; provided, however, that the
Paying Agent shall not be required to destroy cancelled Certificates. The
Paying Agent may adopt other reasonable rules and regulations for the
registration, transfer and tender of TrUEPrS as it may, in its discretion, deem
necessary.
Section 5.03. REPLACEMENT OF CERTIFICATES. In case any Certificate shall
---------------------------
become mutilated or be destroyed, stolen or lost, then, in the absence of notice
to the Paying Agent that such certificate has been acquired by a protected
purchaser, the Managing Trustee shall execute and upon its request, the Paying
Agent shall countersign and deliver a new Certificate of like tenor, bearing a
number not contemporaneously outstanding, in exchange and substitution therefor
upon the Holder's furnishing the Paying Agent with proper identification and
complying with such other reasonable regulations and conditions as the Paying
Agent may prescribe and paying such expenses and charges, including any bonding
fee, as the Paying Agent may incur or reasonably impose; provided, however, that
in the case of a destroyed, stolen or lost Certificate, prior to the Paying
Agent countersigning and delivering a new Certificate in exchange or
substitution therefor, there shall be delivered to the Paying Agent (i) evidence
to its satisfaction of such destruction, loss or theft and (ii) such security or
indemnity as may be required by it to hold it and any of its agents harmless.
Any mutilated Certificate shall be duly surrendered and cancelled before any
duplicate Certificate shall be issued in exchange and substitution therefor.
Upon issuance of any duplicate Certificate pursuant to this Section 5.03, the
original Certificate claimed to have been lost, stolen or destroyed shall become
null and void and of no effect, and any protected purchaser thereof shall have
only such rights as are afforded under Article 8 of the Uniform Commercial Code
to a Holder presenting a Certificate for transfer in the case of an overissue.
Upon the issuance of any new Certificate under this Section, the Trust may
require the payment of a sum sufficient to cover any tax or other governmental
charges that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustees and the Paying Agent) connected
therewith. The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
of mutilated, destroyed, lost or stolen Certificates.
Section 5.04. LIMITATION ON LIABILITY. Pursuant to (S)3803(a) of the
-----------------------
Delaware Business Trust Act, 12 Del. C. (S)3801, et seq., the Holders of the
------- -- ----
TrUEPrS shall be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
Section 5.05. GENERAL PROVISIONS REGARDING THE TrUEPrS.
----------------------------------------
(a) The consideration received by the Trust for the issuance of the
TrUEPrS shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(b) Upon issuance of the TrUEPrS as provided in this Trust Agreement,
the TrUEPrS so issued shall be deemed to be validly issued, fully paid and non-
assessable. The issuance of the TrUEPrS will not be subject to preemptive or
other similar rights.
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(c) Every person, by virtue of having become a Holder in accordance
with the terms of this Trust Agreement, shall be deemed to have expressly
assented and agreed to the terms of, and shall be bound by, this Trust
Agreement.
ARTICLE VI.
TRUSTEES
Section 6.01. TRUSTEES. The Trust shall have three Trustees, each of which
--------
shall be residents of the United States. One Trustee shall be the Managing
Trustee and, as such, is authorized to execute documents and instruments on
behalf of the Trust. The Managing Trustee will be appointed by resolution of the
Trustees. Each Trustee shall serve until the next meeting of Holders called for
the purpose of electing Trustees and, then, until such Trustee's successor is
duly elected and qualified. Holders may not cumulate their votes in the election
of Trustees. Each Trustee shall not be considered to have qualified for the
office unless such Trustee shall agree to be bound by the terms of this Trust
Agreement and shall evidence his consent by executing this Trust Agreement or a
supplement hereto.
Section 6.02. VACANCIES. Any vacancy in the office of a Trustee may be
---------
filled in compliance with Sections 10 and 16 of the Investment Company Act by
the vote, within 30 days, of the remaining Trustees; provided that if required
by Section 16 of the Investment Company Act, the Trustees shall forthwith cause
to be held as promptly as possible and in any event within 60 days (unless the
Commission by order shall extend such period) a meeting of Holders for the
purpose of electing Trustees in compliance with Sections 10 and 16 of the
Investment Company Act. Until a vacancy in the office of any Trustee is filled
as provided above, the remaining Trustees in office, regardless of their number,
shall have the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Trust Agreement. Election shall be by the
affirmative vote of Holders of a majority of the TrUEPrS entitled to vote
present in person or by proxy at a special meeting of Holders called for the
purpose of electing any Trustee. Each individual Trustee shall be at least 21
years of age and shall not be under any legal disability. No Trustee who is an
"interested person", as defined in the Investment Company Act, may assume office
if it would cause the composition of the Trustees of the Trust not to be in
compliance with the percentage limitations on interested persons in Section 10
of the Investment Company Act. Trustees need not be Holders. Notice of the
appointment or election of a successor Trustee shall be mailed promptly after
acceptance of such appointment by the successor Trustee to each Holder.
Section 6.03. POWERS. The Trust will be managed solely by the Trustees, who
------
will, subject to the provisions of Article II hereof, have complete and
exclusive control over the management, conduct and operation of the Trust's
business, and shall have the rights, powers and authority of a board of
directors of a corporation organized under Delaware law. The Trustees shall
have fiduciary responsibility for the safekeeping and use of all funds and
assets of the Trust and shall not employ, or permit another to employ, such
funds or assets in any manner except for the exclusive benefit of the Trust and
except in accordance with the terms of this Trust Agreement. Subject to the
continuing supervision of the Trustees and as permitted by applicable law, the
functions of the Trust shall be performed by the Custodian, the Paying Agent,
the Administrator and such other entities engaged to perform such functions as
the Trustees may determine, including, without limitation, any or all
administrative functions.
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Section 6.04. MEETINGS. Meetings of the Trustees shall be held from time to
--------
time upon the call of any Trustee on not less than 48 hours notice (which may be
waived by any or all of the Trustees in writing either before or after such
meeting or by attendance at the meeting unless the Trustee attends the meeting
for the express purpose of objecting to the transaction of any business on the
ground that the meeting has not been lawfully called or convened). The Trustees
shall act either by majority vote of the Trustees present at a meeting at which
at least a majority of the Trustees then in office are present or by a unanimous
written consent of the Trustees without a meeting. Except as otherwise required
under the Investment Company Act, all or any of the Trustees may participate in
a meeting of the Trustees by means of a conference telephone call or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to such
communications equipment shall constitute presence in person at such meeting.
Section 6.05. RESIGNATION AND REMOVAL. Any Trustee may resign and be
-----------------------
discharged of the trust created by the Trust Agreement by executing an
instrument in writing resigning as Trustee, filing the same with the
Administrator and sending notice thereof to the remaining Trustees, and such
resignation shall become effective immediately unless otherwise specified
therein. Any Trustee may be removed in the event of incapacity by vote of the
remaining Trustees and for any reason by written declaration or vote of the
Holders of more than 66 2/3% of the outstanding TrUEPrS, notice of which vote
shall be given to the remaining Trustees and the Administrator. The
resignation, removal or failure to reelect any Trustee shall not cause the
termination of the Trust.
Section 6.06. LIABILITY. The Trustees shall not be liable to the Trust or
---------
any Holder for any action taken or for refraining from taking any action except
in the case of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties of their office. Specifically, without limitation, the
Trustees shall not be responsible for or in respect of the recitals herein or
the validity or sufficiency of this Trust Agreement or for the due execution
hereof by any other Person, or for or in respect of the validity or sufficiency
of TrUEPrS or Certificates representing TrUEPrS and shall in no event assume or
incur any liability, duty or obligation to any Holder or to any other Person,
other than as expressly provided for herein. The Trustees may employ agents,
attorneys, administrators, accountants and auditors, and shall not be answerable
for the default or misconduct of any such Persons if such Persons shall have
been selected and retained with reasonable care. Action in good faith may
include action taken in good faith in accordance with an opinion of counsel. In
no event shall any Trustee be personally liable for any expenses with respect to
the Trust. Each Trustee shall, to the fullest extent permitted by applicable
law, be indemnified by the Trust with respect to any claim, liability or loss
arising out of or in connection with such Trustee's acting as Trustee of the
Trust and with respect to all reasonable costs and expenses (including the
reasonable costs of investigation, preparation for and defense of legal and/or
administrative proceedings relating to a claim against such Trustee and
reasonable attorneys' fees and disbursements) incurred in connection with any
such claim, liability or loss, except in the case of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties of his office.
Notwithstanding the foregoing, it is understood that (i) the Trust shall not, in
respect of the legal expenses of any Trustee in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel), (ii)
the Trust shall not be liable for any settlement of any proceeding effected
without the written consent of the Trust, but if settled with such consent or if
there be a final judgment for the third party claimant, the Trust agrees to
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indemnify the Trustees from and against any loss or liability by reason of such
settlement or judgment, (iii) the Trust shall only be obligated to pay any
amounts owing to the Trustees under this Section 6.06 from payments it receives
pursuant to the Expense and Indemnity Agreement and not out of the Trust Estate
and (iv) the Trust shall not be liable for any loss, damages, cost, liability or
claim or any expense (including the reasonable costs of investigation,
preparation for and defense of legal and/or administrative proceedings related
to a claim against the Trustees and reasonable attorneys' fees and
disbursements) in an amount in excess of the amount actually received by the
Trust under the Expense and Indemnity Agreement in connection with such loss,
damages, cost, liability or claim.
Section 6.07. COMPENSATION. Each Trustee, other than a Trustee who is a
------------
director, officer or employee of the Sponsor, any Underwriter, or the
Administrator or any affiliate thereof, shall receive a quarterly fee of US$900
payable on January 15, April 15, July 15 and October 15 of each year, provided
the first quarterly fee of $900 for January 15, 1999 shall be payable at Closing
Time. The Managing Trustee, other than a Managing Trustee who is a director,
officer or employee of the Sponsor, any Underwriter or any affiliate thereof,
shall receive an additional quarterly fee of $300 payable on January 15, April
15, July 15 and October 15 of each year, provided the first additional quarterly
fee of $300 for January 15, 1999 shall be payable at Closing Time. The Trustees
will not receive any pension or retirement benefits. In the event of the
resignation or removal of a Trustee or the occurrence of an Exchange Event, such
Trustee shall remit to the Trust the portion of its fee ratable for the period
from the day of such resignation or removal or the date on which an Exchange
Event occurs to the day immediately preceding the first day of the next quarter.
The Trustees will only be entitled to receive compensation pursuant to this
Section 6.07 out of payments received pursuant to the Trust Expense Agreement
and the Expense and Indemnity Agreement and not out of the Trust Estate.
ARTICLE VII.
MISCELLANEOUS
Section 7.01. MEETINGS OF HOLDERS.
-------------------
(a) The Trustees shall not hold annual or regular meetings of Holders
except as set forth herein. A special meeting may be called at any time by the
Trustees or upon petition of Holders of more than 50% of the TrUEPrS outstanding
(unless substantially the same matter was voted on during the preceding 12
months), and shall be called as required by the Investment Company Act or
pursuant to paragraph (v)(B) of the definition of Exchange Event and the rules
and regulations thereunder, including, without limitation, when requested by the
Holders of not less than 10% of the TrUEPrS outstanding for the purposes of
voting upon the question of the removal of any Trustee or Trustees. The Trustees
shall establish, and notify the Holders in writing of, the record date for each
such meeting which shall be not less than 10 nor more than 50 days before the
meeting date. Holders at the close of business on the record date will be
entitled to vote at the meeting. The Administrator shall, as soon as possible
after any such record date (or prior to such record date if appropriate), mail
by first class mail to each Holder a notice of meeting and a proxy statement and
form of proxy in the form approved by the Trustees and complying with the
Investment Company Act and the rules and regulations thereunder. Except as
otherwise specified herein, in the Prospectus (including, without limitation,
changes to the
20
<PAGE>
Trust's fundamental policies set forth in the Prospectus) or in any provision of
the Investment Company Act and the rules and regulations thereunder, any action
may be taken by vote of Holders of a majority of the TrUEPrS outstanding present
in person or by proxy if Holders of a majority of TrUEPrS outstanding on the
record date are so represented. Each TrUEPrS shall have one vote and may be
voted in person or by duly executed proxy; provided, however, that any
investment company registered under the Investment Company Act and any company
excepted from the definition of "Investment Company" pursuant to Section 3(c)(l)
or 3(c)(7) of the Investment Company Act owning TrUEPrS in excess of the limits
imposed by Sections 12(d)(1)(A)(i) and 12(d)(1)(C) of the 1940 Act must vote
their TrUEPrS in proportion to the vote of all other Holders of TrUEPrS that are
not such investment companies registered under the Investment Company Act. Any
proxy may be revoked by notice in writing, by a subsequently dated proxy or by
voting in person at the meeting, and no proxy shall be valid after eleven months
following the date of its execution.
(b) Whenever the holders of the ADRs or the ANZ Preference Shares are
entitled to vote on any matter,
(i) the Trustees shall call a special meeting of the Holders in
accordance with the procedures described in Section 7.01(a) hereof so that
the Holders can indicate how the ADSs or the ANZ Preference Shares should
be voted pursuant to the voting rights granted in the Security and Pledge
Agreements, the Deposit Agreement or the terms of the ANZ Preference
Shares; or
(ii) in lieu of a special meeting of the Holders, such Holders
may provide a written consent, in the manner required by the Investment
Company Act and the rules and regulations thereunder, in which such Holders
will instruct the Trustees of the Trust as to the exercise of the voting
rights pertaining to the ADSs or the ANZ Preference Shares.
Such vote shall be taken a sufficient time before the vote of the ADSs
or the ANZ Preference Shares so that the Trustees can determine the results of
such vote and direct the Jersey Subsidiary, the Collateral Agent or the
Depositary to vote the ADSs or the ANZ Preference Shares in accordance with such
results.
(c) Whenever the holder of the Jersey Preference Shares is entitled to
vote on any matter,
(i) the Trustees shall call a special meeting of the Holders in
accordance with the procedures described in Section 7.01(a) hereof so that
the Holders can indicate how the Jersey Preference Shares should be voted
pursuant to the voting rights granted in the Jersey Preference Shares
Security and Pledge Agreement; or
(ii) in lieu of a special meeting of the Holders, such Holders
may provide a written consent, in the manner required by the Investment
Company Act and the rules and regulations thereunder, in which such Holders
will instruct the Trustees of the Trust as to the exercise of the voting
rights pertaining to the Jersey Preference Shares.
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Such vote shall be taken a sufficient time before the vote of the
Jersey Preference Shares so that the Trustees can determine the results of such
vote and direct the U.K. Company to vote the Jersey Preference Shares in
accordance with such results.
Section 7.02. BOOKS AND RECORDS; REPORTS.
--------------------------
(a) The Trustees shall keep a certified copy or duplicate original of
this Trust Agreement on file at the office of the Trust and the office of the
Administrator available for inspection at all reasonable times during its usual
business hours by any Holder. The Trustees shall keep proper books of record and
account for all the transactions under this Trust Agreement at the office of the
Trust and the office of the Administrator, and such books and records shall be
open to inspection by any Holder at all reasonable times during usual business
hours. The Trustees shall retain all books and records in compliance with
Section 31 of the Investment Company Act and the rules and regulations
thereunder.
(b) With each payment to Holders the Paying Agent shall set forth,
either in the instruments by means of which payment is made or in a separate
statement, the amount being paid from the Trust Account expressed as a U.S.
dollar amount per TrUEPrS and the other information required under Section 19 of
the Investment Company Act and the rules and regulations thereunder. The
Trustees shall prepare and file or distribute reports as required by Section 30
of the Investment Company Act and the rules and regulations thereunder. The
Trustees shall prepare and file such reports as may from time to time be
required to be filed or distributed to Holders under any applicable state or
Federal statute or rule or regulation thereunder, and shall file such tax
returns as may from time to time be required under any applicable state or
Federal statute or rule or regulation thereunder. One of the Trustees shall be
designated by resolution of the Trustees to make the filings and give the
notices required by Rule 17g-1 under the Investment Company Act.
(c) In calculating the net asset value of the Trust as required by the
Investment Company Act, the value of the Debt Securities will be determined in
good faith by the Trustees pursuant to procedures adopted by them.
Section 7.03. DISSOLUTION. The Trust created hereby shall dissolve, and its
-----------
affairs be wound up, upon the earliest of (i) the date 90 days after the
execution of this Trust Agreement if (x) the TrUEPrS have not theretofore been
issued or (y) the net worth of the Trust is not at least US$100,000 at such
time, (ii) the Business Day after the distributions of ADSs or cash pursuant to
Section 2.07, and (iii) the date which is 21 years less 91 days after the death
of the last survivor of all of the descendants of Joseph P. Kennedy Sr., the
former United States Ambassador to the Court of St. James, living on the date
hereof. The Trust is irrevocable, the Sponsor has no right to withdraw any
assets constituting a portion of the Trust Estate, and the dissolution of the
Sponsor shall not operate to dissolve the Trust. The death or incapacity of any
Holder shall not operate to terminate this Trust Agreement, nor entitle his
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, and shall
not otherwise affect the rights, obligations and liabilities of the parties
hereto.
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Section 7.04. AMENDMENT AND WAIVER.
--------------------
(a) This Trust Agreement may be amended from time to time by the
Trustees for any purpose prior to the issuance and sale to the Underwriters of
the TrUEPrS and thereafter without the consent of any of the Holders (i) to cure
any ambiguity or to correct or supplement any provision contained herein or
therein which may be defective or inconsistent with any other provision
contained herein or therein; (ii) to change any provision hereof or thereof as
may be required by applicable law or the Commission or any successor
governmental agency exercising similar authority; or (iii) to make such other
provisions in regard to matters or questions arising hereunder or thereunder as
shall not materially adversely affect the interests of the Holders (as
determined in good faith by the Trustees, who may rely on an opinion of
counsel); provided, however, that no such amendment may be made if it would
cause an Exchange Event to occur.
(b) This Trust Agreement may also be amended from time to time by the
Trustees (or the performance of any of the provisions of the Trust Agreement may
be waived) with the consent by the required vote of the Holders in accordance
with Section 7.01(a) hereof; provided that this Trust Agreement may not be
amended (i) without the consent by vote of the Holders of all TrUEPrS then
outstanding, so as to increase the number of TrUEPrS issuable hereunder above
the number of TrUEPrS specified in Section 2.05(c) hereof or such lesser number
as may be outstanding at any time during the term of this Trust Agreement, (ii)
to reduce the interest in the Trust represented by TrUEPrS without the consent
of the Holders of such TrUEPrS, (iii) if such amendment is prohibited by the
Investment Company Act or other applicable law, (iv) without the consent by vote
of the Holders of all TrUEPrS then outstanding, if such amendment would effect a
change in Sections 2.04, 2.05, 2.06, 2.07, 2.08 or 3.02 hereof or in the voting
requirements set forth in Section 7.01 hereof or this Section 7.04 or (v) in
such a manner as would cause an Exchange Event to occur.
(c) Any of the agreements referred to in Section 2.05(a) hereof may be
amended from time to time by the Trustees and the other parties thereto for any
purpose without the consent of any of the Holders.
(d) Promptly after the execution of any amendment, the Trustees shall
furnish written notification of the substance of such amendment to each Holder
and the ANZ Affiliate.
(e) Notwithstanding subsections (a) and (b) of this Section 7.04, no
amendment hereof shall permit the Trust, the Trustees, the Administrator, the
Paying Agent or the Custodian to take any action or direct or permit any Person
to take any action that (i) would vary the investment of Holders within the
meaning of Treasury Regulation Section 301.7701-4(c), or (ii) would or could
cause the Trust, or direct or permit any action to be taken that would or could
cause the Trust, not to be a "grantor trust" under the Code.
Section 7.05. ACCOUNTANTS.
-----------
(a) The Trustees shall, in accordance with Section 30 of the Investment
Company Act, file annually with the Commission such information, documents and
reports as investment companies having securities registered on a national
securities exchange are required to file annually pursuant to Section 13(a) of
the Exchange Act and the rules and regulations issued thereunder. The Trustees
shall transmit to the Holders, at least semi-annually, the reports required by
Section 30(d) of the Investment Company Act and the rules and regulations
23
<PAGE>
thereunder, including, without limitation, a balance sheet accompanied by a
statement of the aggregate value of investments on the date of such balance
sheet, a list showing the amounts and values of such investments owned on the
date of such balance sheet, and a statement of income for the period covered by
the report. Financial statements contained in such annual reports shall be
accompanied by a certificate of independent public accounts based upon an audit
not less in scope or procedures than that which independent public accountants
would ordinarily make for the purpose of complying with generally accepted
auditing standards and shall contain such information as the Commission may
prescribe. Each such report shall state that such independent public accountants
have verified investments owned, either by actual examination or by receipt of a
certificate from the Custodian.
(b) The independent public accountants referred to in subsection (a)
above shall be selected at a meeting held within 30 days before or after the
beginning of the fiscal year by the vote, cast in person, of a majority of the
Trustees who are not "interested persons" as defined in the Investment Company
Act and such selection shall be submitted for ratification at the first meeting
of Holders to be held as set forth in Section 7.01 hereof, and thereafter as
required by the Investment Company Act and the rules and regulations thereunder.
The employment of any independent public accountant for the Trust shall be
conditioned upon the right of the Holders by a vote of the lesser of (i) 67% or
more of the TrUEPrS present at a special meeting of Holders, if Holders of more
than 50% of TrUEPrS outstanding are present or represented by proxy at such
meeting or (ii) more than 50% of the TrUEPrS outstanding to terminate such
employment at any time without penalty.
(c) The foregoing provisions of this Section 7.05 are in addition to
any applicable requirements of the Investment Company Act and the rules and
regulations thereunder.
Section 7.06. NATURE OF HOLDER'S INTEREST. Each Holder holds at any given
---------------------------
time a proportionate undivided beneficial interest in the Trust Estate, but does
not have any title or right to take title or possession of any portion of the
Trust Estate. Each Holder expressly waives any right he may have under any rule
of law, the provisions of any statute or otherwise, to require the Trustees at
any time to account, in any manner other than as expressly provided in this
Trust Agreement, for the Trust Estate or any component thereof. No Holder shall
have any right except as provided herein to control or determine the operation
and management of the Trust or the obligations of the parties hereto. Nothing
set forth herein or in the Certificates shall be construed to constitute the
Holders from time to time as partners, joint venturers or members of an
association.
Section 7.07. NO RECOURSE. Notwithstanding anything to the contrary
-----------
contained herein, no recourse shall be had, whether by levy or execution or
otherwise, for any claim based on this Trust Agreement or in respect hereof
against any incorporator, shareholder or affiliate of the Trust or the Trustees,
the Administrator, the Custodian or the Paying Agent or any predecessor,
successor or affiliate of the Trust and of the aforesaid persons, or any of
their assets, or against any principal, partner, incorporator, shareholder,
officer, director, agent or employee of any of the aforesaid persons, under any
rule of law, equitable principle, statute or constitution, or by the enforcement
of any assessment or penalty, or otherwise, nor shall any of such persons be
personally liable for any such amounts or claims, or liable for any deficiency
judgment based thereon or with respect thereto, and that all such liability of
the aforesaid persons is expressly waived and released as a condition of, and as
consideration for, the execution of this Trust
24
<PAGE>
Agreement by the Trust; provided, however, that the foregoing shall not relieve
any of such persons or entities from liability for, or prevent recourse against
such persons or entities in respect of, their willful misfeasance, bad faith,
gross negligence or reckless disregard of their duties under this Agreement or
the other agreements referred to herein. Notwithstanding anything to the
contrary contained herein, nothing in this Section shall be construed to affect
or limit the Trust's obligations under this Trust Agreement.
Section 7.08. ENFORCEMENT OF RIGHTS. The Trust will enforce its rights with
---------------------
respect to any payment of money under the Fundamental Trust Agreements (as
defined in the Purchase Agreement) and will enforce its rights with respect to
any actions, omissions or other non-monetary matters against any or all parties
to the aforesaid Fundamental Trust Agreements and the Support Agreement.
Section 7.09. DELAWARE LAW TO GOVERN. This Trust Agreement is executed and
----------------------
delivered in the State of Delaware, and all laws or rules of construction of the
State of Delaware, without regard to principles of conflict of laws, shall
govern the rights of the parties hereto and the Holders and the construction,
validity and effect of the provisions hereof.
Section 7.10. NOTICES. Any notice, demand, direction or instruction to be
-------
given to the Sponsor hereunder shall be in writing and shall be duly given if
mailed or delivered to ML IBK Positions, Inc. at World Financial Center, North
Tower, New York, New York 10281, or at such other address as shall be specified
by the Sponsor to the other parties hereto in writing. Any notice, demand,
direction or instruction to be given to the Trust and the Trustees hereunder
shall be in writing and shall be duly given if mailed or delivered to the Trust
c/o The Bank of New York at 101 Barclay Street, New York, New York 10286, and to
each Trustee at such Trustee's address set forth beneath its signature below, or
such other address as shall be specified to the other parties hereto by such
party in writing. Any notice to be given to a Holder shall be duly given if
mailed, first class postage prepaid, or by such other substantially equivalent
means as the Trustees may deem appropriate, or delivered to such Holder at the
address of such Holder appearing on the registry of the Paying Agent. Notice to
be given to the ANZ Affiliate pursuant to Section 7.04(d) shall be duly given if
mailed or delivered to Minerva House, Montague Close, London SE1 9DH, England,
or at such other address as shall be specified by the ANZ Affiliate to the
parties hereto in writing.
Section 7.11. SEVERABILITY. If any one or more of the covenants,
------------
agreements, provisions or terms of this Trust Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
and terms of this Trust Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Trust Agreement or of the
Certificates, or the rights of the Holders thereof.
Section 7.12. COUNTERPARTS. This Trust Agreement may be executed in several
------------
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 7.13. SUCCESSORS AND ASSIGNS. Whenever in this Trust Agreement any
----------------------
of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Trust Agreement by the Sponsor
25
<PAGE>
and Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether or not so expressed.
26
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
ML IBK POSITIONS, INC.
By:________________________________________
Name:
Title:
TRUSTEES:
__________________________________________
Name: Donald J. Puglisi
Address: 850 Library Avenue, Suite 204
Newark, Delaware 19715
__________________________________________
Name: William R. Latham III
Address: 850 Library Avenue, Suite 204
Newark, Delaware 19715
__________________________________________
Name: James B. O'Neill
Address: 850 Library Avenue, Suite 204
Newark, Delaware 19715
27
<PAGE>
EXHIBIT A-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ANZ EXCHANGEABLE
PREFERRED TRUST II OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. (OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN. THIS CERTIFICATE MAY BE EXCHANGED BY AN AUTHORIZED REPRESENTATIVE OF
DTC IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, REGISTERED IN THE
NAMES OF SUCH HOLDERS AS SUCH REPRESENTATIVE OF DTC SHALL SPECIFY, IN WHICH
CASE, A NEW CERTIFICATE WILL BE ISSUED IN THE NAME OF CEDE & CO. (OR IN SUCH
OTHER NAME AS IS REQUESTED BY SUCH AUTHORIZED REPRESENTATIVE OF DTC)
REPRESENTING THE SECURITIES NOT ISSUED IN DEFINITIVE FORM.
THIS CERTIFICATE IS ISSUED UNDER AND IS SUBJECT TO THE TERMS, PROVISIONS AND
CONDITIONS OF THE TRUST AGREEMENT REFERRED TO BELOW TO WHICH THE HOLDER OF THIS
CERTIFICATE BY VIRTUE OF THE ACCEPTANCE HEREOF ASSENTS AND IS BOUND.
TrUEPrS
ANZ EXCHANGEABLE PREFERRED TRUST II
CUSIP NO. ___________
NO._______________________ _____________________ TRUST UNITS
EXCHANGEABLE FOR PREFERENCE SHARES/SM/
THIS CERTIFIES THAT CEDE & CO. IS THE RECORD OWNER OF ___________ TRUST UNITS
EXCHANGEABLE FOR PREFERENCE SHARES ("TrUEPrSSM") CONSTITUTING A PROPORTIONATE
UNDIVIDED BENEFICIAL INTEREST IN THE ASSETS OF ANZ EXCHANGEABLE PREFERRED TRUST
II, A TRUST GOVERNED BY THE LAWS OF THE STATE OF DELAWARE PURSUANT TO A SECOND
AMENDED AND RESTATED TRUST AGREEMENT (THE "TRUST AGREEMENT") AMONG ML IBK
POSITIONS, INC., THE TRUSTEES NAMED THEREIN AND THE HOLDERS (AS DEFINED
THEREIN). THIS CERTIFICATE IS ISSUED UNDER, AND IS SUBJECT TO THE TERMS,
PROVISIONS AND CONDITIONS OF, THE TRUST AGREEMENT TO WHICH THE HOLDER OF THIS
CERTIFICATE BY VIRTUE OF THE ACCEPTANCE HEREOF ASSENTS AND IS BOUND, A COPY OF
WHICH TRUST AGREEMENT IS AVAILABLE AT THE OFFICE OF THE TRUST'S ADMINISTRATOR
AND PAYING AGENT, THE BANK OF NEW YORK, 101 BARCLAY STREET, NEW YORK, NEW YORK
10286. THIS CERTIFICATE IS TRANSFERABLE AND EXCHANGEABLE BY THE REGISTERED
OWNER IN PERSON AT THE OFFICE OF THE PAYING AGENT UPON PRESENTATION AND
SURRENDER OF THIS CERTIFICATE ACCOMPANIED BY ANY DOCUMENTS
__________________________________
/SM/ Service mark of Merrill Lynch & Co., Inc.
A-1-1
<PAGE>
THAT THE PAYING AGENT MAY REQUIRE FOR TRANSFER, IN FORM SATISFACTORY TO THE
PAYING AGENT AND PAYMENT OF THE FEES AND EXPENSES PROVIDED IN THE TRUST
AGREEMENT.
THIS CERTIFICATE IS NOT VALID UNLESS MANUALLY COUNTERSIGNED BY THE PAYING
AGENT.
WITNESS THE FACSIMILE SIGNATURE OF THE MANAGING TRUSTEE.
ANZ Exchangeable Preferred Trust II
Dated: __________, 1998
By: ______________________________________
Donald J. Puglisi
Managing Trustee
COUNTERSIGNED:
THE BANK OF NEW YORK
as Paying Agent
By: ____________________________
Authorized Signature
A-1-2
<PAGE>
EXHIBIT A-2
ANZ EXCHANGEABLE PREFERRED TRUST II
NO. ____________ _________ TRUST UNITS
EXCHANGEABLE FOR PREFERENCE SHARES/SM/
CUSIP NO. ___________
THIS CERTIFIES THAT _______________ IS THE RECORD OWNER OF _____________ FULLY
PAID AND NON-ASSESSABLE TRUST UNITS EXCHANGEABLE FOR PREFERENCE SHARES
("TrUEPrSSM") CONSTITUTING A PROPORTIONATE UNDIVIDED BENEFICIAL INTEREST IN THE
ASSETS OF ANZ EXCHANGEABLE PREFERRED TRUST II, A TRUST GOVERNED BY THE LAWS OF
THE STATE OF DELAWARE PURSUANT TO A SECOND AMENDED AND RESTATED TRUST AGREEMENT
(THE "TRUST AGREEMENT") AMONG ML IBK POSITIONS, INC., THE TRUSTEES NAMED THEREIN
AND THE HOLDERS (AS DEFINED THEREIN). THIS CERTIFICATE IS ISSUED UNDER, AND IS
SUBJECT TO THE TERMS, PROVISIONS AND CONDITIONS OF, THE TRUST AGREEMENT, AS THE
SAME MAY BE AMENDED FROM TIME TO TIME, TO WHICH THE HOLDER OF THIS CERTIFICATE
BY VIRTUE OF THE ACCEPTANCE HEREOF ASSENTS AND IS BOUND, A COPY OF WHICH TRUST
AGREEMENT IS AVAILABLE AT THE OFFICE OF THE TRUST'S PAYING AGENT, THE BANK OF
NEW YORK, 101 BARCLAY STREET, NEW YORK, NEW YORK 10286. THIS CERTIFICATE IS
TRANSFERABLE AND EXCHANGEABLE BY THE REGISTERED OWNER IN PERSON AT THE OFFICE OF
THE PAYING AGENT UPON PRESENTATION AND SURRENDER OF THIS CERTIFICATE ACCOMPANIED
BY ANY DOCUMENTS THAT THE PAYING AGENT MAY REQUIRE FOR TRANSFER, IN FORM
SATISFACTORY TO THE PAYING AGENT AND PAYMENT OF THE FEES AND EXPENSES PROVIDED
IN THE TRUST AGREEMENT.
THIS CERTIFICATE IS NOT VALID UNLESS MANUALLY COUNTERSIGNED BY THE PAYING
AGENT.
WITNESS THE FACSIMILE SIGNATURE OF THE MANAGING TRUSTEE.
DATED:
ANZ EXCHANGEABLE PREFERRED TRUST II
By:________________________________
Donald J. Puglisi
Managing Trustee
COUNTERSIGNED:
THE BANK OF NEW YORK
as Paying Agent
By: ______________________________
Authorized Signature
_________________________________
SM Service mark of Merrill Lynch & Co., Inc.
A-2-1
<PAGE>
THIS CERTIFICATE IS ISSUED UNDER AND IS SUBJECT TO THE TERMS, PROVISIONS AND
CONDITIONS OF A SECOND AMENDED AND RESTATED TRUST AGREEMENT AMONG ML IBK
POSITIONS, INC., THE TRUSTEES NAMED THEREIN AND THE HOLDERS (AS DEFINED
THEREIN), AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME, TO WHICH THE
HOLDER OF THIS CERTIFICATE BY VIRTUE OF THE ACCEPTANCE HEREOF ASSENTS AND IS
BOUND.
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM--as tenants in common UNIF GIFT MIN ACT--___Custodian___ UNIF TRAN MIN ACT--___Custodian__
TEN ENT--as tenants by the entireties (Cust) (Minor) (Cust) (Minor)
JT TEN-- as joint tenants with right under Uniform Gifts to under Uniform Transfers to
of survivorship and not as Minors Act _________ Minors Act _________
tenants in common (State) (State)
</TABLE>
Additional abbreviations also may be used though not in the above list.
For value received, _______________________ hereby sell, assign and transfer
unto
Please insert social securities or
other identifying number of assignee
___________________________________________________
___________________________________________________
________________________________________________________________________________
(Please Print or Typewrite Name and Address, Including Postal Zip Code, of
Assignee) ______________ TrUEPrS of a proportionate undivided beneficial
interest represented by the within Certificate, and do hereby irrevocably
constitute and appoint _________ Attorney to transfer the said TrUEPrS on the
books of the within-named Trust with full power of substitution in the premises.
Dated: ______________________
_______________________________________________
NOTICE: The Signature to this assignment must correspond with the name as
written upon the face of the Certificate in every particular, without
alteration or enlargement or any change whatever.
Signature Guaranteed:_______________________________________
The Signature(s) should be guaranteed by an eligible
guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C. Rule
17Ad-15.
<PAGE>
EXHIBIT 99 (L)
Brown & Wood LLP
One World Trade Center
New York, New York 10048-0557
November 13, 1998
ANZ Exchangeable Preferred Trust II
c/o Puglisi & Associates
850 Library Avenue
Suite 204
Newark, Delaware 19715
Ladies and Gentlemen:
We have acted as counsel for ANZ Exchangeable Preferred Trust II, a
Delaware business trust (the "Trust"), in connection with the registration of
Trust Units Exchangeable for Preference Shares(SM) ("TrUEPrS(SM)"), under the
Securities Act of 1933, as amended, pursuant to a registration statement on Form
N-2 to be filed with the Securities and Exchange Commission on the date hereof
(the "Registration Statement").
As counsel for the Trust, we are familiar with the proceedings taken by the
Trust in connection with the authorization, issuance and sale of the TrUEPrS. In
addition, we have examined and are familiar with the Certificate of Trust of the
Trust, the Restated Certificate of Trust, the form of Second Amended and
Restated Trust Agreement of the Trust and such other documents as we have deemed
relevant to the matters referred to in this opinion.
Based upon the foregoing, we are of the opinion that the TrUEPrS, upon
issuance and sale in the manner referred to in the Registration Statement, will
be legally issued, fully paid and non-assessable TrUEPrS of the Trust.
In rendering this opinion, we have relied as to matters of Delaware law
upon an opinion of Richards, Layton & Finger, P.A. rendered to the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Prospectus constituting
a part thereof.
Very truly yours,
/s/Brown & Wood LLP
________________________________
(SM) Service mark of Merrill Lynch & Co., Inc.
<PAGE>
EXHIBIT 99 (N)(2)
[LETTERHEAD OF PRICEWATERHOUSECOOPERS]
ANZ Exchangeable Preferred Trust II
c/o Puglisi & Associates
850 Library Avenue, Suite 204
Newark, Delaware 19715
U.S.A.
13 November 1998
Ladies and Gentlemen
Registration Statement on Form N-2
----------------------------------
File Nos. 333-65849 and 811-09069
---------------------------------
We have acted as tax counsel to the ANZ Exchangeable Preferred Trust II (the
"Trust") in connection with the registration of its Trust Units Exchangeable for
Preference Shares(SM) (TrUEPrS(SM)). In connection therewith, we have prepared
the discussion set forth under the captions "Summary Information - Q&A - What
about Australian taxes?" and "Taxation - Certain Australian Tax Considerations"
(the "Discussion") in the Prospectus (the "Prospectus") that is part of
Pre-Effective Amendment No. 2 to the Registration Statement on Form N-2 (File
Nos. 333-65849 and 811-09069) (the "Registration Statement") filed by the Trust
with the Securities and Exchange Commission on 13 November 1998.
We hereby confirm our opinion as set forth in the Discussion. In rendering our
opinion, we have examined the form of Second Amended and Restated Trust
Agreement of the Trust and those transaction documents we considered relevant to
our opinion, each in the form filed as an exhibit to the Registration Statement,
and have assumed that the obligations contemplated thereunder will be performed
in accordance with their terms.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Taxation -
Certain Australian Tax Considerations" in the Prospectus. The issuance of such
consent does not concede that we are an "expert" for the purposes of the
Securities Act of 1933.
Very truly yours
/s/ A.E. Clemens
- ---------------------------------------------
(SM) Service mark of Merrill Lynch & Co., Inc.
