<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 14, 1996
REGISTRATION NO. 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AND
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3 REGISTRATION STATEMENT
NO. 33-49719
---------------
PROVIDIAN CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 51-0108922
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
ROBERT L. WALKER
SENIOR VICE PRESIDENT--FINANCE AND
CHIEF FINANCIAL OFFICER
PROVIDIAN CORPORATION
PROVIDIAN CENTER
400 WEST MARKET STREET
LOUISVILLE, KENTUCKY 40202
(502) 560-3250
PROVIDIAN CENTER (NAME, ADDRESS, INCLUDING ZIP CODE,
400 WEST MARKET STREET AND TELEPHONE NUMBER, INCLUDING AREA
LOUISVILLE, KENTUCKY 40202 CODE, OF AGENT FOR SERVICE)
(502) 560-2000
(ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES)
---------------
COPIES TO:
C. CRAIG BRADLEY, JR., ESQ. ROBERT M. THOMAS, JR., ESQ.
STITES & HARBISON SULLIVAN & CROMWELL
400 WEST MARKET STREET 125 BROAD STREET
LOUISVILLE, KENTUCKY 40202 NEW YORK, NEW YORK 10004
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement as determined
in light of market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
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
of the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED PRICE (1)(3) FEE (4)
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<S> <C> <C>
Debt securities............................................... $389,000,000(2) $134,138
</TABLE>
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(1) Or its equivalent in any other currency or composite currency.
(2) Or, if securities are issued at original issue discount, such greater
amount as shall result in aggregate proceeds of $389,000,000 to the
Registrant.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
(4) Pursuant to Rule 429 under the Securities Act of 1933, $111,000,000 of
Debt Securities are being carried forward from the Form S-3 Registration
Statement No. 33-49719 of the Registrant for inclusion in the Prospectus
filed herewith. A registration fee of $34,688 has been paid with respect
to such Debt Securities.
---------------
This Registration Statement, which is a new Registration Statement, also
constitutes Post-Effective Amendment No. 1 to Registration Statement No. 33-
49719 of the Registrant, which was declared effective on January 12, 1994.
Such Post-Effective Amendment shall hereafter become effective concurrently
with the effectiveness of this Registration Statement and in accordance with
Section 8(c) of the Securities Act of 1933. Pursuant to Rule 429 under the
Securities Act of 1933, the Prospectus filed as part of this Registration
Statement also constitutes a Prospectus for the Form S-3 Registration
Statement No. 33-49719; the $111,000,000 of Debt Securities remaining unsold
from Registration Statement No. 33-49719 will be combined with the
$389,000,000 aggregate amount of Debt Securities to be registered pursuant to
this Registration Statement to enable the Registrant to offer an aggregate
amount of $500,000,000 of Debt Securities pursuant to the combined Prospectus.
---------------
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 THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
LOGO
$500,000,000
PROVIDIAN CORPORATION
DEBT SECURITIES
----------------
The Company may from time to time offer Debt Securities consisting of
debentures, notes, and/or other unsecured evidences of indebtedness in one or
more series at an aggregate initial public offering price not to exceed
$500,000,000 or its equivalent in any other currency or composite currency. The
Debt Securities may be offered as separate series in amounts, at prices, and on
terms to be determined at the time of sale. The accompanying Prospectus
Supplement sets forth with regard to the series of Debt Securities in respect
of which this Prospectus is being delivered the title, aggregate principal
amount, denominations (which may be in United States dollars, in any other
currency or in a composite currency), maturity, rate, if any (which may be
fixed or variable), time of payment of any interest, any terms for redemption
at the option of the Company or the holder, any terms for sinking fund
payments, any listing on a securities exchange, the initial public offering
price, and any other terms in connection with the offering and sale of such
series of Debt Securities.
The Company may sell Debt Securities to or through underwriters, and also may
sell Debt Securities directly to other purchasers or through agents. Such
underwriters may include Goldman, Sachs & Co. or may be a group of underwriters
represented by firms which may include Goldman, Sachs & Co. Goldman, Sachs &
Co. and other persons may also act as agents. The accompanying Prospectus
Supplement sets forth the names of any underwriters or agents involved in the
sale of the series of Debt Securities in respect of which this Prospectus is
being delivered, the principal amounts, if any, to be purchased by
underwriters, and the compensation, if any, of such underwriters or agents.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
GOLDMAN, SACHS & CO.
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The date of this Prospectus is , 1996.
<PAGE>
FOR NORTH CAROLINA RESIDENTS ONLY: THE COMMISSIONER OF INSURANCE OF THE STATE
OF NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THE OFFERING, NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
----------------
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the "SEC")
a Registration Statement on Form S-3 (herein, together with all amendments and
exhibits, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Debt Securities. This
Prospectus does not contain all information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the SEC. Reference is hereby made to the Registration Statement
for further information on the Company and the Debt Securities.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information under the
Exchange Act with the SEC. Such reports, proxy statements, and other
information can be inspected and copied at the SEC, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at its regional offices at 7 World
Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies may also be obtained from the SEC's
Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Copies of such material and other information about the
Company can also be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005; and the Pacific Stock
Exchange, 301 Pine Street, San Francisco, California.
----------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company with the SEC (File No. 1-6701)
under the Exchange Act, are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the year ended December
31, 1995 (which incorporates by reference certain portions of the 1995
Annual Report to Stockholders and the Proxy Statement for the Annual
Meeting of Stockholders held on May 1, 1996);
(b) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996; and
(c) the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996.
All documents filed by the Company under Sections 13(a), 13(c), 14, or 15(d)
of the Exchange Act after the date of this Prospectus and before the
termination of the offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part of it from the respective dates such documents
are filed. Any statement contained in a document all or a portion of which is
incorporated or deemed to be incorporated by reference in this Prospectus shall
be deemed to be modified or superseded for the purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statements so modified shall
not be deemed to be a part of this Prospectus, except as so modified, and any
statement so superseded shall not be deemed to constitute part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered (including any beneficial owner), on written or oral
request, a copy of any or all of the documents incorporated in this Prospectus
by reference, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests should be
made to Providian Corporation, P.O. Box 32830, Louisville, Kentucky 40232,
Attention: Office of the Secretary, Telephone: (502) 560-2000.
2
<PAGE>
PROVIDIAN CORPORATION
Providian Corporation (formerly Capital Holding Corporation) (the "Company")
is a diversified insurance and financial services company. The Company markets
products and services through its subsidiaries, one or more of which is
licensed to do business in all 50 states, in Puerto Rico, and in the District
of Columbia.
The Company is incorporated under the laws of the State of Delaware. Its
principal executive offices are located in the Providian Center, 400 West
Market Street, Louisville, Kentucky 40202, and its telephone number is (502)
560-2000.
BUSINESS SEGMENTS
The operations of the Company and its subsidiaries have been classified into
five business segments: Providian Bancorp, Providian Direct Insurance,
Providian Agency Group, Providian Capital Management, and Corporate and Other.
Providian Bancorp
Providian Bancorp ("Bancorp") markets consumer loans, deposit products and
other banking services using mail, telephone and other direct response
channels. Consumer loans include unsecured credit cards, unsecured revolving
lines, revolving secured home equity loans, closed end mortgages, a credit card
primarily secured by an interest-bearing savings account and insurance premium
financing loans. In addition to lending products, Bancorp provides money market
deposit accounts to retail customers and certificates of deposit to both retail
and institutional customers and provides certain fee-based products and
services to its customers. Bancorp does business primarily through First
Deposit National Bank ("FDNB") and Providian National Bank ("PNB").
Bancorp's unsecured consumer loans are principally generated through direct
mail and telephone solicitations directed to a prescreened list of prospective
accountholders, followed by credit verification. Four principles guide
development of specific underwriting criteria for each mailing: (i) sufficient
credit history; (ii) demonstrated responsible use of credit; (iii) necessary
income qualification; and (iv) no recent significant increase in revolving
indebtedness.
Key profit drivers for Bancorp's spread-based businesses are portfolio asset
growth, the level of credit losses, the cost to acquire customers, pricing
(rates offered to borrowers) and funding costs. Bancorp limits its exposure to
changes in interest rates through various asset/liability management
strategies. As a result of these strategies and the relatively stable cost of
funds, asset growth, credit losses and acquisition costs have a much stronger
influence on the profitability of the spread-based businesses than cost of
funds. Key profit drivers for Bancorp's fee-based businesses (including its
consumer lending businesses which generate significant fee income) include the
number of customer relationships, pricing, servicing costs, persistency, and
the cost to acquire customers. Bancorp's strategy is to profitably build
sustainable, long-term customer relationships generating both spread- and fee-
based income.
Providian Direct Insurance
Providian Direct Insurance ("PDI") markets life, health and personal lines
property and casualty insurance and related fee-based products to individuals
directly and through third-party organizations primarily using television,
direct mail and telephone. PDI also markets its products to retired and active
duty military service personnel through the agency field force of Academy
Insurance Group, Inc. ("Academy"), a subsidiary of the Company. Academy has the
endorsement of the Non-Commissioned Officers Association, providing its
agents/counselors with preferred access to military personnel.
3
<PAGE>
The more significant profit drivers for PDI's business include the overall
level of sales and persistency as well as claims and operating expense
management. PDI's practice is to design profitability into its products through
its underwriting and rate structuring activities, while actively managing its
markets. This approach includes first looking for high-potential markets and
then identifying the types of products that can profitably serve needs in those
markets.
Providian Agency Group
Providian Agency Group ("PAG") markets traditional and interest-sensitive
individual life insurance products, health insurance products and related
services through home service representatives of the Company's following life
insurance subsidiaries: Commonwealth Life Insurance Company; Peoples Security
Life Insurance Company; and Capital Security Life Insurance Company. PAG is a
market-focused distributor of insurance products committed to meeting the needs
of low and middle income families, primarily in the Southeastern and Mid-
Atlantic states. In addition, PAG leverages its insurance capabilities by
marketing insurance products in partnerships with several third-party insurance
and marketing organizations.
Substantially all of PAG's home service representatives are employees of the
Company and do not represent other insurers. Such representatives receive
compensation from sales commissions and from renewal and service commissions.
The compensation arrangement is designed to reward representatives who not only
sell new policies, but who also effectively maintain and service in-force
business to meet Company sales and persistency objectives.
Premium growth, interest spreads, spending levels and underwriting margins
are key drivers of PAG's profitability. Premium growth is driven by three
important factors: the number and retention of agents in the field, agent
productivity and policy persistency. The individual life insurance business is
a mature market in which first year premiums are expected to grow slowly as the
primary insurance-buying population decreases slightly over the next several
years. In response, PAG has reduced its spending levels by streamlining
operations and strengthening its risk management capabilities. PAG has also
been successful in retaining its current business and in generating a
relatively stable stream of earnings.
Providian Capital Management
Providian Capital Management ("PCM") is responsible for the marketing and
management of spread- and fee-based retirement and savings products issued
through the Company's life insurance subsidiaries as well as the management of
all insurance-related invested assets. In the spread-based management business,
PCM receives deposits from customers, and in most situations, guarantees to
return the full principal plus interest at a specified or formula-driven rate.
These funds are invested to earn income and capital appreciation sufficient to
cover customer guarantees, pay expenses and produce a profit. In the fee-based
business, PCM assumes little, if any, investment risk. Fee-based products
provide certain liquidity and withdrawal benefits or tax advantages to
customers but generally do not guarantee the performance of underlying assets.
PCM offers a broad array of financial products, including floating and fixed
rate guaranteed investment contracts (GICs), Trust GIC (synthetic GICs) and
separate account products offered to pension funds, banks, mutual funds and
other organizations. These contracts have stated as well as indeterminant
maturities. PCM markets individual annuities including fixed and variable
contracts and immediate life annuities (primarily structured settlements) to
customers through banks, securities brokerage firms, financial planners and
third-party marketing organizations.
The level of PCM's profits is a function of a number of business and economic
factors which may change in importance from time to time given market
conditions and management's perspective of and tolerance for risk.
4
<PAGE>
Profits on spread-based products represent the excess of investment earnings
over the interest credited on policyholder deposits and related costs. Profits
are primarily driven by changes in interest rates, product growth, mix of
assets and liabilities, credit experience and spending levels. Interest rate
exposure is controlled through asset/liability strategies designed to
appropriately manage the estimated durations of both assets and liabilities. To
control credit risk, PCM maintains strict underwriting standards and emphasizes
a diverse investment portfolio. The current asset/liability mix will result
over time in lower spread margins in a rising interest rate environment and
higher spread margins in a falling interest rate environment.
Corporate and Other
Corporate and Other includes activities of a general corporate nature such as
debt service, corporate-wide marketing programs, intersegment eliminations, an
allocation of net investment income for the capital allocated to business
segments, adjustments given to the business segments for tax preferenced
investments, intercompany service fees, real estate development activities and
certain staff functions. This category also includes the results of businesses
that have not yet been integrated into the Company's other business segments.
The following summary of operations by business segment sets forth amounts
for the years ended December 31, 1995, 1994 and 1993.
REVENUES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------
SEGMENT 1995 1994 1993
- ------- -------- -------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Providian Bancorp:
Interest income................................. $ 457.1 $ 322.0 $ 316.8
Other income.................................... 335.8 269.6 223.1
-------- -------- --------
Total....................................... 792.9 591.6 539.9
Providian Direct Insurance:
Premiums:
Life.......................................... 320.3 307.6 298.9
Health........................................ 180.1 186.1 198.0
Property and casualty......................... 174.8 176.5 143.7
Other product lines........................... 6.5 6.4 7.1
-------- -------- --------
Total premiums.............................. 681.7 676.6 647.7
Investment and other income, net of expenses.... 104.8 103.1 109.5
-------- -------- --------
Total....................................... 786.5 779.7 757.2
Providian Agency Group:
Premiums:
Life.......................................... 359.6 347.8 344.4
Health........................................ 59.6 62.4 65.5
Other product lines........................... 28.1 30.1 37.3
-------- -------- --------
Total premiums.............................. 447.3 440.3 447.2
Investment and other income, net of expenses.... 295.8 286.0 287.6
-------- -------- --------
Total....................................... 743.1 726.3 734.8
Providian Capital Management:
Premiums........................................ 65.6 24.7 71.1
Investment and other income, net of expenses.... 1,019.0 883.5 761.7
-------- -------- --------
Total....................................... 1,084.6 908.2 832.8
Corporate and Other:
Realized investment loss........................ (68.5) (100.3) (20.2)
Other........................................... 49.8 53.6 34.5
-------- -------- --------
Total....................................... (18.7) (46.7) 14.3
-------- -------- --------
Consolidated...................................... $3,388.4 $2,959.1 $2,879.0
======== ======== ========
</TABLE>
5
<PAGE>
INCOME BEFORE FEDERAL INCOME TAX
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31
------------------------
SEGMENT 1995 1994 1993
- ------- ------- ------- ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Providian Bancorp.................................... $ 187.9 $ 150.0 $117.7
Providian Direct Insurance:
Life............................................... 72.1 64.5 56.5
Health............................................. 36.5 41.8 45.8
Property and casualty.............................. 9.3 10.1 8.2
Other product lines................................ (5.4) (6.4) (12.6)
------- ------- ------
112.5 110.0 97.9
Providian Agency Group:
Life............................................... 175.9 179.0 185.7
Health............................................. 2.9 4.0 3.9
Other product lines................................ 3.3 (1.0) 4.1
------- ------- ------
182.1 182.0 193.7
Providian Capital Management:
Spread-based....................................... 118.6 130.7 131.3
Fee-based.......................................... 16.4 5.9 2.8
------- ------- ------
135.0 136.6 134.1
Corporate and Other:
Realized investment loss, net of related
amortization...................................... (68.2) (106.1) (21.9)
Other.............................................. (43.0) (32.0) (34.4)
------- ------- ------
(111.2) (138.1) (56.3)
------- ------- ------
Consolidated......................................... $ 506.3 $ 440.5 $487.1
======= ======= ======
</TABLE>
REGULATORY ENVIRONMENT
Banking
The primary regulator of the Company's principal consumer lending
subsidiaries, FDNB and PNB, is the Office of the Comptroller of the Currency
("OCC"). The banks' deposits are insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation ("FDIC") and, accordingly, the banks are
subject to certain regulations of the FDIC. As members of the Federal Reserve
System, the banks are also subject to regulation by the Board of Governors of
the Federal Reserve System. Regulations of the OCC and other applicable federal
regulatory agencies affect many areas of banking operations, including capital
ratios, reserve requirements, the payment of dividends and permitted
investments.
FDNB must comply with certain restrictions under the Bank Holding Company Act
in order to maintain its grandfathered status. These restrictions include a
limitation on its ability to engage in certain new activities and a 7% annual
cap on its asset growth. PNB's charter limits its activities to credit card
operations.
Notwithstanding their direct or indirect ownership of FDNB and PNB, neither
the Company nor any of its subsidiaries is a "bank holding company" within the
meaning of the Bank Holding Company Act of 1956, as amended.
The relationship between the Company's consumer banking subsidiaries and
their customers is extensively regulated by federal and state consumer
protection laws. The most significant laws include the federal Truth-in-
Lending, Equal Credit Opportunity, Fair Credit Reporting and Truth-in-Savings
Acts.
6
<PAGE>
These laws impose disclosure requirements when a consumer credit loan is
advertised, when it is extended and in connection with monthly billing
statements, limit the liability of credit card holders for unauthorized use,
prohibit certain discriminatory practices and limit the manner in which
consumer credit reports may be used.
Insurance
The business of the Company's insurance subsidiaries is subject to regulation
and supervision by the insurance regulatory authority of each state in which
the subsidiaries are licensed to do business. Such regulators grant licenses to
transact business; regulate trade practices; approve policy forms; license
agents; approve certain premium rates; establish minimum reserve and loss ratio
requirements; review form and content of required financial statements;
prescribe the type and amount of investments permitted; and assure that
capital, surplus and solvency requirements are met. Insurance companies can
also be required under the solvency or guaranty laws of most states in which
they do business to pay assessments up to prescribed limits to fund
policyholder losses or liabilities of insolvent insurance companies. They are
also required to file detailed annual reports with supervisory agencies, and
records of their business are subject to examination at any time. Under the
rules of the National Association of Insurance Commissioners (the "NAIC"), a
self-regulatory organization of state insurance commissioners, insurance
companies are examined periodically by one or more of the supervisory agencies.
In 1992, the NAIC adopted the "Risk Based Capital for Life and/or Health
Insurers Model Act" (the "Model Act") which was designed to identify
inadequately capitalized life and health insurers. The Model Act defines two
key measures: (i) Total Adjusted Capital, which equals an insurer's statutory
capital and surplus plus its Asset Valuation Reserve, plus half its liability
for policyholder dividends, and (ii) Risk Based Capital. Risk Based Capital is
determined by a complex formula which is intended to take into account the
various risks assumed by an insurer. The NAIC adopted a similar, though more
elaborate model act for property/casualty insurers in 1993. Should an insurer's
Adjusted Capital fall below certain prescribed levels (defined in terms of its
Risk Based Capital), the Model Act provides for four different levels of
regulatory attention:
"Company Action Level": Triggered if an insurer's Adjusted Capital is less
than 100% but greater than or equal to 75% of its Risk Based Capital; requires
the insurer to submit a plan to the appropriate regulatory authority that
discusses proposed corrective action.
"Regulatory Action Level": Triggered if an insurer's Adjusted Capital is less
than 75% but greater than or equal to 50% of its Risk Based Capital; authorizes
the regulatory authority to perform a special examination of the insurer and to
issue an order specifying corrective actions.
"Authorized Control Level": Triggered if an insurer's Adjusted Capital is
less than 50% but greater than or equal to 35% of its Risk Based Capital;
authorizes the regulatory authority to take whatever action it deems necessary.
"Mandatory Control Level": Triggered if an insurer's Adjusted Capital falls
below 35% of its Risk Based Capital; requires the regulatory authority to place
the insurer under its control.
Since the Total Adjusted Capital levels of the Company's insurance
subsidiaries currently exceed all of the action levels as defined by the NAIC's
Model Acts, these Model Acts currently have no impact on the Company's
operations or financial condition.
Although the federal government does not directly regulate insurance
business, except with respect to Medicare supplement plans, legislation and
administration policies concerning premiums, age and gender discrimination,
financial services and taxation, among other areas, can significantly affect
the insurance business.
7
<PAGE>
Insurance Holding Company
States have enacted legislation requiring registration and periodic reporting
by insurance companies domiciled within their respective jurisdictions that
control or are controlled by other corporations so as to constitute a holding
company system. The Company and its subsidiaries have registered as a holding
company system pursuant to such legislation in Kentucky, Missouri, North
Carolina, New York, Illinois and New Jersey.
Insurance holding company system statutes and rules impose various
limitations on investments in subsidiaries and may require prior regulatory
approval for the payment of dividends and other distributions in excess of
statutory net gain from operations on an annual noncumulative basis by the
registered insurance company to the holding company or its affiliates. The NAIC
is seeking changes in state law which would further restrict the amount of
dividends which could be paid without prior approval.
Separate Accounts
Separate accounts of the Company's subsidiaries that offer individual
variable annuities are registered with the SEC under the Investment Company Act
of 1940 and are governed by the provisions of the Internal Revenue Code of
1986, as amended, pertaining to the tax treatment of annuities.
COMPETITION
Banking
The credit card and consumer revolving loan business is highly competitive.
The industry has recently experienced rising charge-offs and continued
competitive pressure. Competitors continually refine their use of advertising,
target marketing, balance transfers, pricing competition, incentive programs
and changes in the terms of certain credit cards, including lowering the rate
of interest charged on balances and adopting "tiered" or "risk-adjusted" or
"performance-based" rates under which the annual percentage rate is lowered or
raised for the issuer's most or least creditworthy customers.
In response to the competitive environment, Bancorp has implemented a variety
of new programs to attract and retain customers, including reducing interest
rates on selected accounts and marketing additional fee-based products. Bancorp
has generally retained the right to alter various charges, fees and other terms
with respect to consumer credit accounts. In addition, Bancorp has experienced
steady growth in its secured loan products and is increasing its efforts to
offer additional products to underserved markets.
Insurance
The insurance industry is highly competitive with over 2,000 life insurance
companies competing in the United States, some of which have substantially
greater financial resources, broader product lines and larger staffs than the
Company's insurance subsidiaries. Additionally, life insurance companies face
increasing competition from banks, mutual funds and other financial entities
for attracting investment funds.
The Company's insurance subsidiaries differentiate themselves through
progressive marketing techniques, product features, price, customer service,
stability and reputation, as well as competitive credit ratings. The insurance
subsidiaries maintain their competitive position by their focus on lower risk
markets and efficient cost structure. Other competitive strengths include
integrated asset/liability management, risk management and innovative product
engineering.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of Debt Securities
offered hereby for general corporate purposes.
8
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
The following summary consolidated financial data presents the consolidated
results of operations of the Company and its subsidiaries. The summary
information should be read in conjunction with and is qualified in its
entirety by the detailed information and financial statements, including the
notes thereto, contained in the documents incorporated by reference in this
Prospectus. See "Incorporation of Certain Documents by Reference." The Summary
Consolidated Financial Data for the six-month periods ended June 30, 1996 and
1995, are unaudited and reflect all adjustments which are, in the opinion of
management, necessary to a fair presentation for the interim periods. All such
adjustments are of a normal recurring nature. The results of operations for
the six-month period ended June 30, 1996 are not necessarily indicative of the
results to be expected for the full year ending December 31, 1996.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
-------------------- ----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS EXCEPT PER COMMON AND COMMON EQUIVALENT SHARE AND
RATIO DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF STATEMENTS OF
INCOME:
Premiums and other
considerations......... $ 605.5 $ 606.0 $ 1,194.6 $ 1,141.2 $ 1,167.7 $ 1,190.0 $ 1,056.0
Investment income, net
of expenses............ 936.2 932.0 1,861.4 1,595.6 1,461.4 1,453.5 1,479.9
Consumer loan servicing
fees................... 121.2 98.3 250.2 206.8 172.8 140.3 110.0
Realized investment gain
(loss)................. (0.6) (50.3) (68.5) (100.3) (20.1) 6.5 (18.8)
Other income, net....... 100.3 67.9 150.7 115.8 97.2 47.3 33.3
--------- --------- --------- --------- --------- --------- ---------
Total revenues....... 1,762.6 1,653.9 3,388.4 2,959.1 2,879.0 2,837.6 2,660.4
Total benefits and
expenses............... 1,469.8 1,428.9 2,882.1 2,518.6 2,391.9 2,385.6 2,314.5
Federal income tax...... 87.6 68.3 155.2 135.9 164.4 129.5 95.7
Dividends on Company-
obligated mandatorily
redeemable preferred
securities of Providian
LLC.................... 2.9 2.9 5.8 3.7 -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net income.............. 202.3 153.8 345.3 300.9 322.7 322.5 250.2
Dividends on
nonconvertible
preferred stock........ -- -- -- 1.2 6.8 6.8 8.6
--------- --------- --------- --------- --------- --------- ---------
Net income applicable to
common stock........... $ 202.3 $ 153.8 $ 345.3 $ 299.7 $ 315.9 $ 315.7 $ 241.6
========= ========= ========= ========= ========= ========= =========
Net income per common
and common equivalent
share.................. $ 2.16 $ 1.59 $ 3.60 $ 3.02 $ 3.12 $ 3.14 $ 2.66
========= ========= ========= ========= ========= ========= =========
SELECTED DATA FROM
STATEMENTS OF FINANCIAL
CONDITION:
Cash and investments.... $21,407.0 $20,880.9 $21,924.6 $19,268.9 $18,734.4 $16,791.3 $15,661.7
Total assets............ 26,824.3 25,742.2 26,838.6 23,613.4 22,929.0 20,588.3 18,873.0
Total policy
liabilities............ 16,407.4 17,439.5 16,751.5 16,509.8 15,500.5 13,928.8 12,877.5
Long-term debt issued
by:
Corporate.............. 745.6 754.3 720.8 694.3 589.3 589.3 611.2
Bancorp................ 50.0 -- -- -- -- -- --
Company-obligated
mandatorily redeemable
preferred securities of
Providian LLC.......... 100.0 100.0 100.0 100.0 -- -- --
Realized shareholders'
equity (1)............. 2,715.0 2,485.0 2,596.4 2,431.3 2,478.7 2,195.7 1,947.1
Total shareholders'
equity (2)............. 2,781.2 2,653.1 2,961.0 2,121.9 2,492.9 2,185.9 1,930.9
RATIO OF EARNINGS TO
FIXED CHARGES (3)...... 5.6 4.8 5.1 5.7 7.0 6.0 4.7
RATIO OF EARNINGS TO
FIXED CHARGES,
INCLUDING INTEREST ON
BANKING DEPOSITS (4)... 3.2 3.0 3.2 3.8 4.6 3.9 2.9
RATIO OF EARNINGS TO
FIXED CHARGES,
INCLUDING INTEREST ON
BANKING DEPOSITS,
ANNUITIES AND OTHER
FINANCIAL PRODUCTS (5). 1.5 1.3 1.4 1.5 1.6 1.5 1.4
</TABLE>
- -------
(1) Realized shareholders' equity excludes from total shareholders' equity the
net unrealized investment gain (loss) on debt securities and redeemable
preferred stocks, net of adjustments for deferred acquisition costs and
deferred income taxes.
(2) Effective January 1, 1994, the Company adopted SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities," which increased
shareholders' equity by $261.4 million as of that date.
(3) For the purpose of computing the ratio of earnings to fixed charges,
earnings have been calculated by adding to pretax income from continuing
operations the amount of fixed charges reduced for capitalized interest
and increased for amortization of previously capitalized interest. Fixed
charges consists of interest on debt and a portion of net rental expense,
approximately one-third, deemed to represent interest.
(4) Computation of this ratio is the same as described in note (3) above
except that fixed charges also include interest on banking deposits.
(5) Computation of this ratio is the same as described in note (3) above
except that fixed charges also include interest on banking deposits,
annuities and other financial products.
9
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities") and the
extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in that Prospectus Supplement. The term
"Debt Securities," as used in this caption, refers to all Securities issued
under the Indenture (as defined below) and includes any Offered Debt
Securities.
The Offered Debt Securities are to be issued under an Indenture dated as of
January 1, 1994 (the "Indenture"), between the Company and First Trust of New
York, National Association (successor to Morgan Guaranty Trust Company of New
York), as Trustee (the "Trustee"), which is incorporated by reference as an
exhibit to the Registration Statement. The following summaries of certain
provisions of the Debt Securities and the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the Indenture, including the definitions therein of
certain terms. Wherever particular provisions or defined terms of the Indenture
are referred to, such provisions or defined terms are incorporated herein by
reference. Section or Article references are to the Indenture. Capitalized
terms not otherwise defined herein shall have the meaning given them in the
Indenture.
GENERAL
The Debt Securities will be unsecured obligations of the Company and will
rank equally and ratably with other unsecured and unsubordinated indebtedness
of the Company. The Indenture does not limit the amount of debentures, notes,
or other evidences of indebtedness that may be issued under it. Debt Securities
may be issued from time to time in one or more series up to the aggregate
amount authorized by the Company.
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Debt Securities offered thereby for the following terms and
additional provisions, where applicable, of the Offered Debt Securities: (1)
the title of the Offered Debt Securities; (2) any limit on their aggregate
principal amount; (3) the Person to whom any interest on any Offered Debt
Security shall be payable if other than to the Person in whose name the Offered
Debt Security is registered at the Regular Record Date; (4) the price(s)
(expressed as a percentage of the aggregate principal amount thereof) at which
they will be issued; (5) the date(s), or the methods by which to determine such
date(s), on which the principal of the Offered Debt Securities will be payable;
(6) the rate(s) (which may be fixed or variable) at which they will bear
interest, if any, and the date from which such interest will accrue and the
dates on which such interest will be payable and the Regular Record Dates for
such Interest Payment Dates; (7) the Place(s) of Payment for the principal,
premium, if any, and interest on the Offered Debt Securities; (8) any mandatory
or optional sinking fund or analogous provisions; (9) any index used to
determine the amount of payments of principal of and premium, if any, and
interest; (10) the date, if any, after which, the terms upon which and the
price(s) at which the Company may redeem them at its option; (11) the currency
or currencies (including composite currencies) of payment of principal of and
premium, if any, and interest thereon if other than U.S. dollars; (12) whether
the Indenture provisions relating to defeasance and/or covenant defeasance will
apply to them; (13) whether they are to be issuable in the form of one or more
Global Securities; (14) the denominations of the Offered Debt Securities, if
other than in denominations of $1,000 and any integral multiple thereof; (15)
the portion of the principal (if other than all principal Outstanding) due upon
a declaration of acceleration of the Offered Debt Security; and (16) any other
terms.
Unless otherwise indicated in the Prospectus Supplement, principal (and
premium, if any) and interest, if any, on the Offered Debt Securities will be
payable, and transfers of the Offered Debt Securities will be registrable, at
the Corporate Trust Office of the Trustee; provided that, at the
10
<PAGE>
Company's option, interest may be paid by (i) check mailed to the address of
the Person entitled thereto as it appears in the Security Register or (ii) wire
transfer to an account maintained by such Person located in the United States.
(Sections 301, 305, 307, 308 and 1002) Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any interest due on any Offered
Debt Security will be payable to the Person in whose name such Offered Debt
Security is registered at the close of business on the Regular Record Date for
such interest. (Sections 307 and 308)
Unless the Prospectus Supplement otherwise indicates, the Offered Debt
Securities will be issued in registered form without coupons in denominations
of $1,000 and any integral multiple thereof. (Section 302) No service charge
will be made for any registration of transfer or exchange of Offered Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge imposed in connection therewith, other
than for certain exchanges not involving any transfer. (Section 305) The
Indenture provides that Debt Securities may be issuable in the form of one or
more Global Securities. (Sections 205, 301 and 305) See "--Global Securities."
Debt Securities may be issued as Original Issue Discount Securities to be
offered and sold at a substantial discount from their stated principal amount.
Special United States federal income tax and other considerations applicable to
Offered Debt Securities issued at an original issue discount, including
Original Issue Discount Securities, and special United States federal income
tax considerations applicable to any Offered Debt Securities that are
denominated in other than U.S. dollars are described under "United States
Taxation."
GLOBAL SECURITIES
If any Offered Debt Securities are issuable in the form of one or more Global
Securities, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
Offered Debt Security issuable in the form of one or more Global Securities may
exchange such interests for Offered Debt Securities of such series and of like
tenor and principal amount in any authorized form and denomination. (Sections
101, 301 and 305) Principal of and any premium and interest on Offered Debt
Securities issuable in the form of one or more Global Securities will be
payable in the manner described in the applicable Prospectus Supplement.
RESTRICTIVE COVENANTS
Limitations on Liens on Restricted Subsidiaries' Capital Stock
The Company will not, and it will not permit any Restricted Subsidiary
(defined below) at any time directly or indirectly to, create, assume, incur,
or permit to exist any indebtedness secured by a pledge, lien, or other
encumbrance on the capital stock of any Restricted Subsidiary without making
effective provision whereby the Debt Securities then outstanding (and, if the
Company so elects, any other indebtedness ranking on a parity with the Debt
Securities) shall be equally and ratably secured with such secured indebtedness
so long as such other indebtedness shall be secured; provided, however, that
this covenant shall not be applicable to liens (as defined in Section 1007) of
(i) taxes or assessments or governmental charges or levies not then due and
delinquent or the validity of which is being contested in good faith or which
is less than $5,000,000, (ii) liens created by or resulting from any litigation
or legal proceeding being contested in good faith or involving claims of less
than $5,000,000, or (iii) deposits to secure (or in lieu of) surety, stay,
appeals or custom bonds. (Section 1007)
Limitations on Sales of Restricted Subsidiaries' Capital Stock
The Company is restricted from disposing of in any way any shares of capital
stock of a Restricted Subsidiary (other than for directors' qualifying shares
or dispositions to a Subsidiary), and Restricted
11
<PAGE>
Subsidiaries are restricted from disposing of in any way any shares of capital
stock of any other Restricted Subsidiary (other than for directors' qualifying
shares or dispositions to the Company or to a Subsidiary), except the entire
capital stock of such Restricted Subsidiary owned by the Company for a
consideration which, in the opinion of the Board of Directors, is at least
equal to the fair value thereof. (Section 1008) Unless otherwise specified in
the Prospectus Supplement, the term "Restricted Subsidiary" means any
Subsidiary of the Company with assets greater than or equal to 5% of all assets
of the Company and its Subsidiaries (excluding the assets of Providian Bancorp,
Inc. and its subsidiaries), computed and consolidated in accordance with
generally accepted accounting principles. The term "Restricted Subsidiary" does
not include Providian Bancorp, Inc. (a subsidiary of the Company) or any of its
subsidiaries. (Section 101)
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides, if such provision is made applicable to the Debt
Securities of any series pursuant to Section 301 of the Indenture, that the
Company may elect either:
(a) to defease and be discharged from any and all obligations with
respect to Outstanding Debt Securities of such series (except for the
obligations to register the transfer or exchange of such Debt Securities;
to replace temporary or mutilated, destroyed, lost, or stolen Debt
Securities; to maintain an office or agency in respect of the Debt
Securities; and to hold moneys for payment in trust) ("defeasance"); or
(b)(1) to be released from its obligations with respect to the
Outstanding Debt Securities of such series under Sections 801(3)
(limitation on creation of liens in connection with mergers or
consolidations of the Company, etc.), 1006 (payment of taxes and other
claims), 1007 (limitation on creation of liens on capital stock of
Restricted Subsidiaries), and 1008 (limitation on sales of capital stock of
Restricted Subsidiaries) of the Indenture; and (2) that the occurrence of
an event specified in Section 501(4) (with respect to Sections 801(3),
1007, and 1008) or Section 501(5), as described in clauses (d) and (e)
under "Events of Default," shall not be deemed to be an Event of Default
under the Indenture with respect to such Debt Securities ("covenant
defeasance"),
upon the irrevocable deposit with the Trustee (or other qualifying trustee), in
trust for such purpose, of money and/or U.S. Government Obligations (as
defined) that through the payment of principal and interest in accordance with
their terms will provide money in an amount sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of (and premium, if any) and interest on such series of Debt
Securities, and any mandatory sinking funds or analogous payments thereon, on
the scheduled due dates therefor.
Such a trust may be established only if, among other things, the Company has
delivered to the Trustee an opinion of counsel (as specified in the Indenture)
to the effect that the Holders of such series of Debt Securities will not
recognize income, gain, or loss for federal income tax purposes as a result of
the deposit, defeasance (and discharge of such series of Debt Securities) or
covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner, and at the same times as would have been the case
if such deposit, defeasance (and discharge of such series of Debt Securities)
or covenant defeasance had not occurred. Such opinion, in the case of
defeasance under clause (a) above, must refer to and be based upon a ruling of
the Internal Revenue Service or a change in applicable federal income tax law
occurring after the date of the Indenture. The Prospectus Supplement may
further describe the provisions, if any, permitting such defeasance and/or
covenant defeasance with respect to the Debt Securities of a particular series.
In the event the Company exercises its option to omit compliance with certain
covenants of the Indenture with respect to any series of Debt Securities and
the Debt Securities of such series are declared due and payable because of the
occurrence of any Event of Default, the amount of money and U.S. Government
Obligations on deposit with the Trustee will be sufficient to pay amounts due
on
12
<PAGE>
the Debt Securities of such series at the time of their Stated Maturity but may
not be sufficient to pay amounts due on the Debt Securities of such series at
the time of the acceleration resulting from such Event of Default. However, the
Company shall remain liable for such payments.
The Prospectus Supplement will state if the defeasance and/or the covenant
defeasance provisions will apply to the Offered Debt Securities. (Article
Thirteen)
EVENTS OF DEFAULT
The following are Events of Default with respect to Debt Securities of any
series: (a) failure to pay any interest on any Debt Security of that series
when due, continued for 30 days; (b) failure to pay any principal of or
premium, if any, on any Debt Security of that series when due; (c) failure to
deposit any sinking fund payment, when due, in respect of any Debt Security of
that series; (d) default in the performance, or breach, of any other covenant
or warranty of the Company in the Indenture (other than a covenant or warranty
included solely for the benefit of any series of Debt Securities other than
that series), continued for 60 days after written notice as provided in the
Indenture; (e) default in and acceleration of any indebtedness for money
borrowed by the Company or any Restricted Subsidiary in excess of an aggregate
principal amount of $10,000,000 under the terms of the instrument under which
such indebtedness is issued or secured, if such acceleration is not rescinded
or annulled within 10 days after written notice as provided in the Indenture;
(f) certain events in bankruptcy, insolvency, or reorganization; and (g) any
other Event of Default provided with respect to Debt Securities of that series.
(Section 501)
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25% in principal amount of the Outstanding Debt Securities of that
series may declare the principal amount (or, if the Debt Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Debt
Securities of that series to be due and payable immediately. At any time after
a declaration of acceleration with respect to Debt Securities of any series has
been made, but before a judgment or decree based on acceleration has been
obtained by the Trustee, the Holders of a majority in principal amount of the
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration. (Section 502)
The Trustee will be under no obligation, subject to the provisions of the
Indenture relating to the duties of the Trustee in the case an Event of Default
shall occur and be continuing, to exercise any of its rights or powers under
the Indenture at the request or direction of any of the Holders of the Debt
Securities, unless such Holder shall have offered to the Trustee reasonable
indemnity. (Sections 601 and 603) Subject to such indemnification provisions,
the Holders of a majority in principal amount of the Outstanding Debt
Securities of any series affected will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debt Securities of that series. (Section 512)
No Holder of any Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written notice of
a continuing Event of Default with respect to Debt Securities of that series
and unless also the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in aggregate principal amount of the Outstanding Debt Securities of that series
a direction inconsistent with such request and shall have failed to institute
such proceeding within 60 days. (Section 507) However, the Holder of any Debt
Security will have an absolute and unconditional right to receive payment of
the principal of (and premium, if any) and interest on such Debt Security on or
after the due dates expressed in such Debt Security and to institute suit for
the enforcement of any such payment. (Section 508)
13
<PAGE>
The Company will be required to furnish to the Trustee within 120 days after
the end of each fiscal year of the Company a statement as to any default in the
performance and observance of any of the terms, provisions and conditions of
the Indenture or any Board Resolution adopted with respect to the issuance of
any series of Debt Securities under Section 301 of the Indenture. (Section
1004)
MODIFICATION AND WAIVER
The Company and the Trustee may modify or amend the Indenture with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of each series affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the Holder of each affected Outstanding Debt Security
affected thereby: (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Debt Security; (b) reduce the
principal amount of, or the premium (if any) or interest payable upon the
redemption of any Debt Security; (c) change the Place of Payment where, or the
coin or currency in which, any Debt Security or the premium (if any) or
interest thereon is payable; (d) reduce the amount of principal of an Original
Issue Discount Debt Security payable upon acceleration of the Maturity thereof;
(e) impair the right to institute suit for the enforcement of any payment on or
with respect to any Debt Security on or after the Stated Maturity or Redemption
Date thereof; or (f) reduce the percentage in principal amount of Outstanding
Debt Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults. (Section
902)
The Company may omit in any particular instance to comply with certain
restrictive provisions set forth in the Indenture (Sections 1004 to 1008,
inclusive) with respect to the Debt Securities of any series if before the time
for such compliance the Holders of at least a majority in principal amount of
the Outstanding Debt Securities of such series shall by the Act of such Holders
either expressly waive such compliance in such instance or generally waive
compliance with such term, provision, covenant or condition. (Section 1009) The
Holders of not less than a majority in principal amount of the Outstanding Debt
Securities of any series may on behalf of the Holders of all Debt Securities of
that series waive any past default under the Indenture with respect to that
series, except a default in the payment of the principal of (or premium, if
any) or interest on any Debt Security of that series or in respect of a
provision that under the Indenture cannot be modified or amended without the
consent of the Holder of each Outstanding Debt Security of that series
affected. (Section 513)
The Indenture provides that, in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver
thereunder: (a) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
acceleration of the Maturity thereof to such date; and (b) the principal amount
of a Debt Security denominated in other than U.S. dollars shall be the U.S.
dollar equivalent, determined in the manner contemplated by Section 301 of the
Indenture on the date of original issuance of such Debt Security, of the
principal amount of such Debt Security (or, in the case of an Original Issue
Discount Debt Security, the U.S. dollar equivalent on the date of original
issuance of such Debt Security of that amount determined as provided in clause
(a) above of such Debt Security). (Section 101)
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Indenture provides that the Company, without the consent of any Holders
of Outstanding Debt Securities, may (i) consolidate or merge with or into any
Person, or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, or permit any Person to consolidate with or merge
into the Company, or (ii) permit any Person to convey, transfer or lease its
properties and
14
<PAGE>
assets substantially as an entirety to the Company (collectively, the
"Transactions"), provided that in any such case: (a) the successor Person, in
connection with any Transaction, is organized under the laws of any United
States jurisdiction and assumes the Company's obligations on the Debt
Securities and under the Indenture; (b) after giving effect to a Transaction,
no Event of Default (and no event which, after notice or lapse of time or both,
would become an Event of Default) shall have happened and be continuing; (c)
if, as a result of any Transaction, properties or assets of the Company would
become subject to a mortgage, pledge, lien, security interest or other
encumbrance which would not be permitted by the Indenture, the Company or such
successor Person, as the case may be, shall take steps as shall be necessary
effectively to secure the Debt Securities equally and ratably with (or prior
to) all indebtedness secured thereby; and (d) certain other conditions, with
respect to the Transactions described in clause (i) of this paragraph, are met.
(Article Eight)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEE
Under the Indenture, First Trust of New York, National Association, as
successor Trustee to Morgan Guaranty Trust Company of New York, any future
successor Trustee thereto under the Indenture, or any other Trustee under the
Indenture, is required to satisfy certain continuing eligibility criteria,
including the maintenance of certain ratings assigned to the long-term debt of
any such Trustee (or the long-term debt of the holding company of which such
Trustee is a subsidiary if no such ratings for such Trustee are available), in
order to be and remain a trustee under the Indenture. (Section 609) No
resignation or removal of the Trustee and appointment of a successor Trustee
will be effective until the acceptance of appointment by a successor Trustee
pursuant to the provisions of the Indenture. (Sections 610 and 611)
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters and also may
sell Debt Securities directly to other purchasers or through agents. Such
underwriters or agents may include Goldman, Sachs & Co. or a group of
underwriters represented by firms including Goldman, Sachs & Co., and will be
named in the Prospectus Supplement. Goldman, Sachs & Co. may also act as
agents.
The distribution of the Debt Securities may be affected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities, for whom
they may act as agents, in the form of discounts, concessions, or commissions.
Underwriters may sell Debt Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions, or commissions
from the underwriters and/or commissions from the purchasers for whom they act
as agents. Underwriters, dealers, and agents that participate in the
distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions they receive from the Company, and any profit on the
resale of Debt Securities they realize may be deemed to be underwriting
discounts and commissions under the Securities Act. Any such underwriter or
agent will be identified, and any such compensation received from the Company
will be described, in the Prospectus Supplement.
15
<PAGE>
Each series of Offered Debt Securities will be a new issue with no
established trading market. The Company may elect to list any series of Offered
Debt Securities on an exchange, but is not obligated to do so. It is possible
that one or more underwriters may make a market in a series of Offered Debt
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, no assurance can be given as to
the liquidity of the trading market for the Debt Securities.
Under agreements the Company may enter into, underwriters, dealers, and
agents who participate in the distribution of Debt Securities may be entitled
to indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with, and perform services for the Company in the
ordinary course of business.
VALIDITY OF DEBT SECURITIES
Unless otherwise specified in the Prospectus Supplement with respect to the
Offered Debt Securities, the validity of the Debt Securities will be passed
upon for the Company by Stites & Harbison, Louisville, Kentucky, and if sold to
or through underwriters or agents, by Sullivan & Cromwell, New York, New York.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, and the related schedules included therein, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements and related schedules are incorporated herein
by reference in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration Fee.............................................. $134,138
Trustee's Fees and Expenses................................... 2,500*
Printing and Engraving Expenses............................... 50,000*
Rating Agency Fees............................................ 130,000*
Accountants' Fees and Expenses................................ 50,000*
Legal Fees and Expenses....................................... 100,000*
Blue Sky Fees and Expenses.................................... 20,000*
Miscellaneous................................................. 13,362*
--------
Total..................................................... $500,000*
========
</TABLE>
- --------
*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is a Delaware corporation. Section 145 of the Delaware General
Corporation Law empowers a corporation, with limitations, to indemnify its
directors, officers, employees, and agents against expenses (including
attorneys' fees), judgments, fines, and certain settlements actually and
reasonably incurred by them in connection with any suit or proceeding to which
they are a party so long as they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation (and, with respect to a criminal action or proceeding, so long as
they had no reasonable cause to believe their conduct to have been unlawful).
The Company has purchased insurance coverage for its directors and officers
with respect to certain liabilities incurred in their capacities as such, and
insuring the Company against any payments which it is obligated to make to such
persons under the above indemnification provisions.
The Delaware General Corporation Law allows Delaware corporations to include
in their certificates of incorporation provisions (a) to eliminate or limit
their directors' personal liability to the Company and its shareholders for
monetary damages for violations of their fiduciary duty of care in certain
cases (including gross negligence) and (b) to enhance the scope of authorized
indemnification (including the advancing of litigation expenses) for its
directors, officers, employees, and agents. Further, a corporation can entitle
an individual to an advance of expenses associated with a legal proceeding
before its conclusion, if that individual agrees to repay the expenses advanced
if it is ultimately determined that indemnification was not warranted.
The Company's Certificate of Incorporation (a) limits Company directors'
liability in certain circumstances, (b) enhances indemnification rights for its
directors, officers, employees, and agents to the fullest extent permitted by
Delaware law in the manner described above, and (c) entitles an individual to
an advance of expenses as described above. Section 6.1 of the Company's By-Laws
provides that the Company's officers, directors, employees, and agents shall
have such rights to indemnification as are provided for in the Company's
Certificate of Incorporation.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<C> <S> <C>
1.1 --Form of Underwriting Agreement.
4.1* --Indenture, dated as of January 1, 1994, between the Company
and First Trust of New York, National Association, (successor
to Morgan Guaranty Trust Company of New York), as Trustee.
5.1 --Opinion of Stites & Harbison as to validity of Debt
Securities, and including consent.
12.1 --Computation of Ratio of Earnings to Fixed Charges.
23.1 --Consent of Ernst & Young LLP.
23.2 --Consent of Stites & Harbison (included in Exhibit 5.1).
24.1 --Certified copy of resolution of the Board of Directors of
the Company authorizing the corporation and its officers to
name attorneys-in-fact to sign on their behalf this
registration statement and any and all amendments (including
post-effective amendments) thereto.
24.2 --Powers of attorney authorizing Robert L. Walker, Elaine J.
Robinson and R. Michael Slaven to sign the registration
statement and any and all amendments (including post-
effective amendments) to the registration statement on behalf
of the Company and its respective directors and applicable
officers.
25.1 --Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939, as amended, of First Trust
of New York, National Association
</TABLE>
- --------
*Incorporated herein by reference to Exhibit 4.4 to the Registrant's annual
report on Form 10-K (File No. 1-6701) for the year ended December 31, 1993.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933, as amended (the "Act");
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that the undertakings set forth in paragraphs (i)
and (ii) above do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that are incorporated by reference in this registration
statement;
II-2
<PAGE>
(2) that for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of its annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the 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 such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(d) Insofar as indemnification for liabilities under the Act may be permitted
to directors, officers, and controlling persons of the registrant under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the 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 director, officer, or controlling person of such
registrant in the successful defense of any action, suit, or proceeding) is
asserted against the registrant by such director, officer, or controlling
person in connection with the securities being registered, such 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 Act and will be governed by the final adjudication of such
issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF LOUISVILLE AND COMMONWEALTH OF KENTUCKY, ON THIS
13TH DAY OF AUGUST, 1996.
Providian Corporation
By: Irving W. Bailey II*
Chairman of the Board
and Chief Executive Officer
/s/ R. Michael Slaven
*By: ________________________________
R. Michael Slaven
Attorney-in-fact for
Irving W. Bailey II
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED
ON THIS 13TH DAY OF AUGUST, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
Irving W. Bailey II Chairman of the Board and Chief Executive
___________________________________________ Officer (Principal Executive Officer)
Irving W. Bailey II*
Robert L. Walker* Senior Vice President--Finance and Chief
___________________________________________ Financial Officer (Principal Financial
Robert L. Walker Officer)
Steven T. Downey* Vice President and Controller
___________________________________________ (Principal Accounting Officer)
Steven T. Downey
John L. Clendenin* Director
___________________________________________
John L. Clendenin
John M. Cranor, III* Director
___________________________________________
John M. Cranor, III
Lyle Everingham* Director
___________________________________________
Lyle Everingham
Raymond V. Gilmartin* Director
___________________________________________
Raymond V. Gilmartin
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
J. David Grissom* Director
___________________________________________
J. David Grissom
Watts Hill, Jr.* Director
___________________________________________
Watts Hill, Jr.
Ned C. Lautenbach* Director
___________________________________________
Ned C. Lautenbach
F. Warren McFarlan* Director
___________________________________________
F. Warren McFarlan
Shailesh J. Mehta* President, Chief Operating Officer
___________________________________________ and Director
Shailesh J. Mehta
Director
___________________________________________
Martha R. Seger
Larry D. Thompson* Director
___________________________________________
Larry D. Thompson
</TABLE>
/s/ R. Michael Slaven
*By: ________________________________
R. Michael Slaven
Attorney-in-fact
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
<C> <S>
1.1 --Form of Underwriting Agreement.
4.1* --Indenture, dated as of January 1, 1994, between the Company and
First Trust of New York, National Association (successor to Morgan
Guaranty Trust Company of New York),
as Trustee.
5.1 --Opinion of Stites & Harbison as to validity of Debt Securities, and
including consent.
12.1 --Computation of Ratio of Earnings to Fixed Charges.
23.1 --Consent of Ernst & Young LLP.
23.2 --Consent of Stites & Harbison (included in Exhibit 5.1).
24.1 --Certified copy of resolution of the Board of Directors of the
Company authorizing the corporation and its officers to name
attorneys-in-fact to sign on their behalf this registration
statement and any and all amendments (including post-effective
amendments) thereto.
24.2 --Powers of attorney authorizing Robert L. Walker, Elaine J. Robinson
and R. Michael Slaven to sign the registration statement and any and
all amendments (including post-effective amendments) to the
registration statement on behalf of the Company and its respective
directors and applicable officers.
25.1 --Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of First Trust of New York,
National Association.
</TABLE>
- --------
* Incorporated herein by reference to Exhibit 4.4 to the Registrant's annual
report on Form 10-K (File No. 1-6701) for the year ended December 31, 1993.
<PAGE>
Providian Corporation
Debt Securities
Underwriting Agreement
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
, 199__
Ladies and Gentlemen:
From time to time Providian Corporation, a Delaware corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and to sell to the firm or firms
named in Schedule I to the applicable Pricing Agreement (such firm or firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its debt securities (the "Securities")
as specified in Schedule II to such Pricing Agreement (with respect to such
Pricing Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated Securities shall
be as specified in the Pricing Agreement related thereto and in or pursuant to
the indenture (the "Indenture") identified in such Pricing Agreement.
1. Particular sales of Designated Securities may be made from time to time to
the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase the Securities. The obligation of the
Company to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the
<PAGE>
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Securities to be
purchased by each Underwriter and shall set forth the date, time and manner of
delivery of such Designated Securities and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Indenture and
the registration statement and prospectus with respect thereto) the terms of
such Designated Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission device
designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) Two registration statements on Form S-3 (file nos. 33-49719 and 333-_____)
(the "Initial Registration Statements") in respect of the Securities have been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statements and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to the Representatives and,
excluding exhibits to the Initial Registration Statements, but including all
documents incorporated by reference in the prospectus contained in the latest
Initial Registration Statement, to the Representatives for each of the other
Underwriters, have been declared effective by the Commission in such form; other
than a registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to the Initial Registration Statements or
document incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission (other than prospectuses filed
pursuant to Rule 424(b) of the rules and regulations of the Commission under the
Act, each in the form heretofore delivered to the Representatives); and no stop
order suspending the effectiveness of the Initial Registration Statements, any
post-effective amendment thereto or the Rule 462(b) Registration Statement, if
any, has been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the Initial
Registration Statements or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Act being hereafter called
a "Preliminary Prospectus"; the various parts of the Initial Registration
Statements and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in the Initial Registration Statements at the time such part of the
Initial Registration Statements became effective, but excluding Form T-1, each
as amended at the time such part of the Initial Registration Statements became
effective, or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective being hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Securities, in the form
in which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter called
the "Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or the Prospectus, as
the case may be; any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date
of the Initial Registration Statements that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the form in
which it is filed with the Commission pursuant to Rule 424(b) under the Act, in
accordance with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing);
-2-
<PAGE>
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to such
Securities;
(d) Neither the Company nor any of its Subsidiaries (as hereinafter defined)
has sustained since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or any of its Subsidiaries or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and its
Subsidiaries, otherwise than as set forth or contemplated in the Prospectus (the
term "Subsidiary" as used in this Agreement referring respectively to
Commonwealth Life Insurance Company, Providian Bancorp, Inc., Peoples Security
Life Insurance Company, Providian Life and Health Insurance Company and any
other subsidiary of the Company that would constitute a "significant subsidiary"
of the Company under Rule 1.02(v) of Regulation S-X under the Act);
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable;
and all of the issued shares of capital stock of each Subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and non-
assessable and (except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims;
-3-
<PAGE>
(g) The Securities have been duly authorized, and, when Designated Securities
are issued and delivered pursuant to this Agreement and the Pricing Agreement
with respect to such Designated Securities, such Designated Securities will have
been duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the benefits
provided by the Indenture, which will be substantially in the form filed as an
exhibit to the Registration Statement; the Indenture has been duly authorized
and duly qualified under the Trust Indenture Act and, at the Time of Delivery
(as defined in Section 4 hereof) for such Designated Securities the Indenture
will be duly qualified under the Trust Indenture Act and will constitute a valid
and legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles; and the Indenture conforms, and the Designated
Securities will conform, to the descriptions thereof contained in the Prospectus
as amended or supplemented with respect to such Designated Securities;
(h) The issue and sale of the Securities and the compliance by the Company
with all of the provisions of the Securities, the Indenture, this Agreement and
any Pricing Agreement, and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound, nor will such action
result in any violation of the provisions of the Certificate of Incorporation,
as amended, or the By-Laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its Subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Company of the other
transactions contemplated by this Agreement or any Pricing Agreement or the
Indenture except such as have been, or will have been prior to the Time of
Delivery, obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities, insurance or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(i) There are no legal or governmental proceedings pending to which the
Company or any of its Subsidiaries is a party or of which any property of the
Company or any of its Subsidiaries is the subject, other than as set forth in
the Prospectus and other than litigation incident to the kind of business
conducted by the Company and its Subsidiaries which, in the judgment of the
Company, would not individually or in the aggregate have a material adverse
effect on the financial position, shareholders' equity or results of operations
of the Company and its Subsidiaries; to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others; the amounts accrued for taxes on the latest consolidated
statement of financial condition of the Company and its subsidiaries included or
incorporated by reference in the Prospectus are sufficient for the payment of
all federal, state, county and local taxes of the Company and its Subsidiaries,
whether or not disputed, which are properly accruable; and all federal, state,
county and local taxes due and payable by the Company, any of its Subsidiaries
or Capital Liberty, L.P. have been paid or adequate provision has been made for
such payment;
(j) The statements set forth in the Prospectus under the captions "Description
of Debt Securities" (and in the corresponding caption in the Prospectus as
amended or supplemented), insofar as they purport to constitute a summary of the
terms of the Securities, are accurate, complete and fair;
-4-
<PAGE>
(k) The Company is not and, after giving effect to the offering and sale of
the Securities, will not be an "investment company" or an entity "controlled" by
an "investment company", as such terms are defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act");
(l) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes; and
(m) Ernst & Young LLP, who have certified certain financial statements of the
Company and its subsidiaries, are independent certified public accountants as
required by the Act and the rules and regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Securities and authorization by the Representatives of the release of such
Designated Securities, the several Underwriters propose to offer such Designated
Securities for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to the
Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer,
payable to the order of the Company in the funds specified in such Pricing
Agreement, all at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as the Representatives and
the Company may agree upon in writing, such time and date being herein called
the "Time of Delivery" for such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended and supplemented in relation to the
applicable Designated Securities in a form approved by the Representatives and
to file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of the Pricing Agreement relating to the applicable
Designated Securities or, if applicable, such earlier time as may be required by
Rule 424(b); to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of the Pricing
Agreement relating to such Securities and prior to the Time of Delivery for such
Securities which shall be disapproved by the Representatives for such Securities
promptly after reasonable notice thereof; to advise the Representatives promptly
of any such amendment or supplement after such Time of Delivery and furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Securities, and during such same
period to advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been filed or
become effective or any supplement to the Prospectus or any amended Prospectus
has been filed with the Commission, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any prospectus
relating to the Securities, of the suspension of the qualification of such
Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any such stop order or of any such order preventing or suspending the use of any
prospectus relating to the Securities or suspending any such qualification, to
use promptly its best efforts to obtain its withdrawal;
-5-
<PAGE>
(b) Promptly from time to time to take such action as the Representatives may
reasonably request to qualify such Securities for offering and sale under the
securities and insurance laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of such Securities, provided that in connection
therewith the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the business day next
succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in New York City as amended or
supplemented in such quantities as the Representatives may reasonably request,
and, if the delivery of a prospectus is required at any time in connection with
the offering or sale of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus or to file under the Exchange
Act any document incorporated by reference in the Prospectus in order to comply
with the Act, the Exchange Act or the Trust Indenture Act, to notify the
Representatives and upon their request to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in securities as
many copies as the Representatives may from time to time reasonably request of
an amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after (i) the
effective date of the Registration Statement (as defined in Rule 158(c)), (ii)
the effective date of each post-effective amendment to the Registration
Statement, and (iii) the date of each filing by the Company with the Commission
of an Annual Report on Form 10-K that is incorporated by reference in the
Registration Statement, an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement for
such Designated Securities and continuing to and including the later of (i) the
termination of trading restrictions for such Designated Securities, as notified
to the Company by the Representatives and (ii) the Time of Delivery for such
Designated Securities, not to offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company which mature more than one year after such
Time of Delivery and which are substantially similar to such Designated
Securities, without the prior written consent of the Representatives; and
(f) If the Company elects to rely upon Rule 462(b) under the Act, the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) under the Act by 10:00 P.M., Washington, D.C. time,
on the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee pursuant
to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the reasonable cost of printing, preparing by
word processor or reproducing any Agreement among Underwriters, this Agreement,
any Pricing Agreement, any Indenture, any Blue Sky and Legal Investment
Memoranda and any other documents in connection with the offering, purchase,
sale and delivery of the
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Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities and insurance laws as
provided in Section 5(b) hereof, including the reasonable fees and disbursements
of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (iv) any fees charged
by securities rating services for rating the Securities; (v) any filing fees
incident to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of
preparing the Securities; (vii) the fees and expenses of any Trustee and any
agent of any Trustee and the fees and disbursements of counsel for any Trustee
in connection with any Indenture and the Securities; and (viii) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, Section 8 and Section 11
hereof, the Underwriters will pay all of their own costs and expenses, including
the fees of their counsel, transfer taxes on resale of any of the Securities by
them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under the
Pricing Agreement relating to such Designated Securities shall be subject, in
the discretion of the Representatives, to the condition that all representations
and warranties and other statements of the Company in or incorporated by
reference in the Pricing Agreement relating to such Designated Securities are,
at and as of the Time of Delivery for such Designated Securities, true and
correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus as amended or supplemented in relation to the applicable
Designated Securities shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the rules
and regulations under the Act and in accordance with Section 5(a) hereof; if the
Company has elected to rely upon Rule 462(b) under the Act, the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the Representatives'
reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have furnished to
the Representatives such opinion or opinions, dated the Time of Delivery for
such Designated Securities, with respect to this agreement, the incorporation of
the Company, the validity of the Indenture, the Designated Securities, the
Registration Statement, the Prospectus as amended or supplemented and other
related matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters;
(c) Stites & Harbison, counsel for the Company, or other counsel for the
Company satisfactory to the Representatives, shall have furnished to the
Representatives their written opinion, dated the Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued, and are
fully paid and non-assessable;
(iii) The Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business, so
as to require such qualification (such counsel being entitled to rely in respect
of the opinion in
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this clause upon opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company, provided that such counsel shall
state that they believe that both the Representatives and they are justified in
relying upon such opinions and certificates);
(iv) Each Subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification; each Subsidiary has
all necessary authorizations, approvals, orders, licenses, certificates and
permits of and from all governmental regulatory officials and bodies (including,
without limitation, each insurance commission having jurisdiction over any
insurance Subsidiary of the Company) to own or lease its properties and to
conduct its business as described in the Prospectus; and all of the issued
shares of capital stock of each such Subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable, and (except for
directors' qualifying shares) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in this clause upon opinions of
local counsel and in respect of matters of fact upon certificates of officers of
the Company or its Subsidiaries, provided that such counsel shall state that
they believe that both the Representatives and they are justified in relying
upon such opinions and certificates);
(v) To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Company or any of its Subsidiaries
is a party or of which any property of the Company or any of its Subsidiaries is
the subject, other than as set forth in the Prospectus as amended or
supplemented and other than litigation incident to the kind of business
conducted by the Company and its Subsidiaries, which, in the opinion of such
counsel, individually and in the aggregate is not material to the Company and
its Subsidiaries; to the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others; and, to the best of such counsel's knowledge, and, in the opinion of
such counsel, the Company, its Subsidiaries and Capital Liberty, L.P. are in
substantial compliance with all applicable federal and state tax statutes,
regulations and official rulings and interpretations;
(vi) The Agreement and the Pricing Agreement with respect to the Designated
Securities have been duly authorized, executed and delivered by the Company;
(vii) The Designated Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the Indenture;
and the Designated Securities and the Indenture conform to the descriptions
thereof in the Prospectus as amended or supplemented;
(viii) The Indenture has been duly authorized, executed and delivered by
the parties thereto and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles; and
the Indenture has been duly qualified under the Trust Indenture Act;
(ix) The issue and sale of the Designated Securities and the compliance by
the Company with all of the provisions of the Designated Securities, the
Indenture, this Agreement and the Pricing Agreement with respect to the
Designated Securities and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, (a) any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company is a party or by which the
Company is bound or (b) any indenture, mortgage, deed of trust, loan agreement,
financing agreement or instrument, lease or agreement relating to an acquisition
or divestiture known to such counsel to which any of the Subsidiaries of the
Company is a party or by which any
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<PAGE>
of the Subsidiaries of the Company is bound, nor will such action result in any
violation of the provisions of the Certificate of Incorporation, as amended, of
the Company or the By-Laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its Subsidiaries or any of their
properties;
(x) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Designated Securities or the consummation
by the Company of the other transactions contemplated by this Agreement or such
Pricing Agreement or the Indenture, except such as have been obtained under the
Act and the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities,
insurance or Blue Sky laws in connection with the purchase and distribution of
the Designated Securities by the Underwriters;
(xi) The statements set forth in the Prospectus under the caption
"Description of Debt Securities" (and in the corresponding caption in the
Prospectus as amended or supplemented), insofar as they purport to constitute a
summary of the terms of the Securities, and under the captions "Taxation" and
"Plan of Distribution" (and in the corresponding captions in the Prospectus as
amended or supplemented), insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and fair
(provided that such counsel need express no opinion with respect to statements
set forth in the Prospectus under the caption "Plan of Distribution" (and in the
corresponding caption in the Prospectus as amended or supplemented) but only to
the extent such statements are made in reliance upon and conformity with
information furnished in writing to the Company by an Underwriter of Designated
Securities through the Representatives expressly for use in the Prospectus as
amended or supplemented relating to such Securities);
(xii) The Company is not and, after giving effect to the offering and sale
of the Securities, will not be an "investment company" or an entity "controlled"
by an "investment company", as such terms are defined in the Investment Company
Act;
(xiii) The documents incorporated by reference in the Prospectus as amended
or supplemented (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be, complied as to
form in all material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission thereunder;
and they have no reason to believe that any of such documents, when they became
effective or were so filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act, an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or, in the
case of other documents which were filed under the Act or the Exchange Act with
the Commission, an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such documents were so filed,
not misleading; and
(xiv) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made by the
Company prior to the Time of Delivery for the Designated Securities (other than
the financial statements and related schedules therein, as to which such counsel
need express no opinion) comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the rules and
regulations thereunder; although they do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to in the
opinion in subsection (xi) of this Section 7(c), they have no reason to believe
that, as of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to the Time of Delivery (other than
the financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further amendment or supplement
thereto made by the Company
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prior to the Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company prior to the Time of
Delivery (other than financial statements and related schedules therein, as to
which such counsel need express no opinion) contains an untrue statement of
material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading;
and they do not know of any amendment to the Registration Statement required to
be filed or any contracts or other documents of a character required to be filed
as an exhibit to the Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference or described as
required;
(d) James V. Elliott, General Counsel of the Company, shall have furnished to
the Representatives his written opinion, dated the Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect that the issue and sale of the Designated
Securities and the compliance by the Company with all of the provisions of the
Designated Securities, the Indenture, this Agreement and the Pricing Agreement
with respect to the Designated Securities and the consummation of the
transactions herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to him to which any of the Subsidiaries of the
Company is a party or by which any of the Subsidiaries of the Company is bound
(such counsel being entitled to rely in respect of any matters of fact upon
certificates of officers of the Subsidiaries and of public officials, provided
that such counsel shall state that he believes that both the Representatives and
he are justified in relying upon such certificates);
(e) At the Time of Delivery for such Designated Securities, the independent
certified public accountants of the Company who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to the
Representatives a letter, dated the Time of Delivery, to the effect set forth in
Annex II hereto, and as to such other matters as the Representatives may
reasonably request and in form and substance satisfactory to the
Representatives;
(f) (i) Neither the Company nor any of its Subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended or supplemented any loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented, and (ii) since the
respective dates as of which information is given in the Prospectus as amended
or supplemented there shall not have been any change in the capital stock or
long-term debt of the Company on a consolidated basis or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
the Company and its Subsidiaries, otherwise than as set forth or contemplated in
the Prospectus as amended or supplemented, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Designated Securities on the terms
and in the manner contemplated in the Prospectus as amended or supplemented;
(g) On or after the date of the Pricing Agreement relating to the Designated
Securities there shall not have occurred any of the following: (i) a suspension
or material limitation in trading in securities of the Company in particular or
securities generally on the New York Stock Exchange; (ii) a general moratorium
on commercial banking activities declared by either Federal or New York State
authorities; or (iii) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if
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the effect of any such event specified in this clause (iii) in the judgment of
the Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Securities on the terms and in
the manner contemplated by the Prospectus as amended and supplemented;
(h) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities
certificates of officers of the Company satisfactory to the Representatives, as
to the accuracy of the representations and warranties of the Company herein at
and as of such Time of Delivery, as to the performance by the Company of all of
its obligations hereunder to be performed at or prior to such Time of Delivery,
as to the matters set forth in subsections (a) and (f) of this Section and as to
such other matters as the Representatives may reasonably request;
(i) On or after the date of the Pricing Agreement relating to the Designated
Securities (i) no downgrading shall have occurred in the rating accorded the
Company's debt securities by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities; and
(j) The Company shall have complied with the provisions of Section 5(c) hereof
with respect to the furnishing of prospectuses on the business day next
succeeding the date of this Agreement.
8. (a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred
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by the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. The indemnifying party shall not be required to indemnify the
indemnified party for any amount paid or payable by the indemnified party in the
settlement of any action, proceeding or investigation without the written
consent of the indemnifying party, which consent shall not be unreasonably
withheld.
(d) If the indemnification provided for in this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated Securities
on the other from the offering of the Designated Securities to which such loss,
claim, damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters of the Designated
Securities on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by such Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent
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misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Securities
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Securities and not
joint.
(e) The obligations of the Company under this Section 8 shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act;
and the obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company shall have the right
to postpone the Time of Delivery for such Designated Securities for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the principal
amount of Designated Securities which such Underwriter agreed to purchase under
such Pricing Agreement) of the Designated Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of such defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities as referred to in subsection (b) above, or, if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
-13-
<PAGE>
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive each delivery of and payment for the Securities.
Anything herein to the contrary notwithstanding, the indemnity agreement of
the Company in subsection (a) of Section 8 hereof, the representations and
warranties in subsections (b), (c) and (d) of Section 2 hereof and any
representation or warranty as to the accuracy of the Registration Statement or
the Prospectus contained in any certificate furnished by the Company pursuant to
Section 7 hereof, insofar as they may constitute a basis for indemnification for
liabilities (other than payment by the Company of expenses incurred or paid in
the successful defense of any action, suit or proceeding) arising under the Act,
shall not extend to the extent of any interest therein of a controlling person
or partner of an Underwriter who is a director, officer or controlling person of
the Company when the Registration Statement has become effective, except in each
case to the extent that an interest of such character shall have been determined
by a court of appropriate jurisdiction as not against public policy as expressed
in the Act. Unless in the opinion of counsel for the Company the matter has been
settled by controlling precedent, the Company will, if a claim for such
indemnification is asserted, submit to a court of appropriate jurisdiction the
question whether such interest is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
11. If any Pricing Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter with
respect to Designated Securities covered by such Pricing Agreement except as
provided in Section 6 and Section 8 hereof; but, if for any other reason
Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in writing
or by telegram, telefacsimile or telex if promptly confirmed in writing, and if
to the Underwriters shall be sufficient in all respects if delivered or sent by
registered mail to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be sufficient in all respects if
delivered or sent by registered mail to Providian Corporation, Providian Center,
P.O. Box 32830, Louisville, Kentucky 40232, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall
be delivered or sent by registered mail to such Underwriter at its address set
forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request.
13. This Agreement and each Pricing Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Section 8 and Section 10 hereof, the officers and directors of the
Company and each person who controls the Company, or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
-14-
<PAGE>
14. Time shall be of the essence of each Pricing Agreement. As used herein,
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all of such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us three counterparts hereof.
Very truly yours,
PROVIDIAN CORPORATION
By:
---------------------------------------
Name:
Title:
Accepted as of the date hereof:
- -----------------------------------
(Goldman, Sachs & Co.)
-15-
<PAGE>
ANNEX I
Pricing Agreement
-----------------
Goldman, Sachs & Co.,
[As Representatives of
the several Underwriters named
in Schedule I hereto]
85 Broad Street,
New York, New York 10004.
, 199__
Dear Sirs:
Providian Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated , 1996 (the "Underwriting Agreement"), between the
Company on the one hand and Goldman, Sachs & Co. on the other hand, to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Securities specified in Schedule II hereto (the "Designated Securities"). Each
of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the Prospectus,
as the case may be, relating to the Designated Securities, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the time and place and at a
purchase price to the Underwriters set forth in Schedule II hereto, the
principal amount of Designated Securities set forth opposite the name of such
Underwriters in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us ________ counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance
-16-
<PAGE>
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company. [It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company for examination upon request, but without
warranty on the part of the Representatives as to the authority of the signers
thereof.]
Very truly yours,
PROVIDIAN CORPORATION
By:______________________________________
Name:
Title:
Accepted as of the date hereof:
------------------------------
(Goldman, Sachs & Co.)
[On behalf of each of the Underwriters]
-17-
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
----------
Principal Amount of
Designated
Securities to be
Underwriter Purchased
----------- -------------------
<S> <C>
Goldman, Sachs & Co. ................................... $
[Name(s) of Co-Representative(s)].......................
[Names of other Underwriters]...........................
----------------
Total ....................................... $
================
</TABLE>
-18-
<PAGE>
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes] [Debentures] due
Aggregate principal amount:
$
Price to Public:
% of the principal amount of the Designated Securities, plus accrued
interest, if any, from to [and accrued amortization, if any,
from to ]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued
interest, if any, from to [and accrued amortization, if any,
from to ]
Form of Designated Securities:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian][the Representatives].]
[Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian, to be
made available for checking by the Representatives at least twenty-four hours
prior to the Time of Delivery at the office of DTC.]
Specified funds for payment of purchase price:
Federal (same day) funds
Indenture:
Indenture, dated as of January 1, 1994, between the Company and First Trust of
New York, National Association (successor to Morgan Guaranty Trust Company of
New York), as Trustee.
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
-19-
<PAGE>
[months and dates, commencing , 19 ]
------------ ---
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the sinking
fund, in whole or in part at the option of the Company, in the amount of
$ or an integral multiple thereof, on or after , at the
following redemption prices (expressed in percentages of principal amount).
If [redeemed on or before , %, and if] redeemed during the
12-month period beginning , .
Redemption
Year Price
---- ----------
and thereafter at 100% of their principal amount, together in each case with
accrued interest to the redemption date.]
[on any interest payment date falling in or after , , at the
election of the Company, at a redemption price equal to the principal amount
thereof, plus accrued interest to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire $ principal amount of Designated Securities on in
each of the years through at 100% of their principal amount plus
accrued interest] [, together with [cumulative] [non-cumulative] redemptions
at the option of the Company to retire an additional $ principal
amount of Designated Securities in the years through at
100% of their principal amount plus accrued interest].
[If Securities are extendable debt Securities, insert--
Extendable provisions:
The Designated Securities are repayable on [insert date and years], at the
option of the holder, at their principal amount with accrued interest.
Initial annual interest rate will be %, and thereafter annual interest rate
will be adjusted on , and to a rate not
less than % of the effective annual interest rate on U.S. Treasury
obligations with -year maturities as of the [insert date 15 days prior to
maturity date] prior to such [insert maturity date].]
[If Securities are Floating Rate debt Securities, insert--
-20-
<PAGE>
Floating rate provisions:
Initial annual interest rate will be % through [and thereafter
will be adjusted [monthly] [on each , , and ]
[to an annual rate of % above the average rate for -year [month]
[securities] [certificates of deposit] by and
[insert names of banks].] [and the annual interest rate [thereafter] [from
through ] will be the interest yield equivalent of the
weekly average per annum market discount rate for -month Treasury bills
plus % of Interest Differential (the excess, if any, of (i) then current
weekly average per annum secondary market yield for -month
certificates of deposit over (ii) then current interest yield equivalent of
the weekly average per annum market discount rate for -month Treasury
bills) [from and thereafter the rate will be the then current
interest yield equivalent plus % of Interest Differential].]
Defeasance Provisions:
Time of Delivery:
, a.m. (New York City time)
------
Closing location for delivery of Designated Securities:
Additional Closing Conditions:
Paragraph 7(g) of the Underwriting Agreement should be modified in the event
that the Securities are denominated in, indexed to, or principal or interest
are paid in, a currency other than the U.S. dollar, more than one currency or
in a composite currency. The country or countries issuing such currency should
be added to the banking moratorium and hostilities clauses and the following
additional clause should be added to the paragraph (the entire paragraph
should be restated, as amended):
"; ( ) the imposition of the proposal or exchange controls by any
governmental authority in [insert the country or countries issuing such
currency, currencies or composite currency]".
-21-
<PAGE>
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]: *
- ------------
*A description of particular tax, accounting or other unusual features (such as
the addition of event risk provisions) of the Designated Securities should be
set forth, or referenced to an attached and accompanying description, if
necessary to ensure agreement as to the terms of the Designated Securities to
be purchased and sold. Such a description might appropriately be in the form
in which such features will be described in the Prospectus Supplement for the
offering.
-22-
<PAGE>
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the Company's
independent certified public accountants shall furnish letters to the
Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) (A) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) audited by them and included or
incorporated by reference in the Registration Statement or the Prospectus comply
as to form in all material respects with the applicable accounting requirements
of the Act or the Exchange Act, as applicable, and the related published rules
and regulations thereunder; and (B) if they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of any consolidated interim financial statements, selected financial
data, pro forma financial information and/or condensed financial statements
derived from audited financial statements of the Company included or
incorporated by reference in the Registration Statement or the Prospectus, they
have made such reviews in accordance with standards established by the American
Institute of Certified Public Accountants for the periods specified in such
letter as indicated in their reports thereon, copies of which have been
furnished to the representatives of the Underwriters (the "Representatives");
(iii) They have performed the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial information as
described in SAS No. 71, Interim Financial Information, on the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or included
in the Company's quarterly report on Form 10-Q incorporated by reference into
the Registration Statement and Prospectus; and on the basis of the foregoing
procedure and other specified procedures including inquiries of certain
officials of the Company who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated financial
statements referred to above comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act as it applies
to Form 10-Q and the related published rules and regulations and whether those
unaudited condensed consolidated financial statements are in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited consolidated financial statements
incorporated by reference in the Registration Statement and the Prospectus,
nothing came to their attention that caused them to believe that (a) any
material modifications should be made to such unaudited condensed consolidated
financial statements for them to be in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited consolidated financial statements incorporated by reference in the
Registration Statement and the Prospectus and (b) the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the Exchange
Act as it applies to Form 10-Q and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for the five such fiscal years which were included or incorporated by reference
in the Company's Annual Reports on Form 10-K for such fiscal years;
(v) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred
to below, a reading of the latest available interim financial statements of
the Company and its
-23-
<PAGE>
subsidiaries, inspection of the minute books of the Company, Commonwealth Life
Insurance Company, Peoples Security Life Insurance Company, Providian Life and
Health Insurance Company, Providian National Bank and First Deposit National
Bank (all of which are direct or indirect subsidiaries of the Company) since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of certain officials of the Company
responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention
that caused them to believe that:
(A) any unaudited pro forma consolidated condensed financial statements
included or incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements of
the Act and the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of those statements;
(B) (1) as of a specified date not more than five days prior to the date of
such letter, there have been any changes in the capital stock of the Company
(other than issuances of capital stock upon exercise of options which were
outstanding on the date of the latest statement of financial condition
included or incorporated by reference in the Prospectus) or any change in the
consolidated capital stock (other than any such issuances) or any increase in
the consolidated short-term or long-term debt of the Company and its
consolidated subsidiaries, or (2) as of the date of the most recent
consolidated financial statements available for internal use or otherwise
available on the date which is five days prior to the date of such letter,
there have been any decreases in consolidated total assets, total cash and
investments or shareholders' equity, in each case as compared with amounts
shown in the latest statement of financial condition included or incorporated
by reference in the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(C) for the period from the date of the latest financial statements included
or incorporated by reference in the Prospectus to the date of the most recent
consolidated financial statements available for internal use or otherwise
available on the date which is five days prior to the date of such letter,
there were any decreases in the total or per share amounts of consolidated
income before federal income taxes, consolidated premiums and other
considerations or consolidated investment income, net of expenses, in each
case as compared with the comparable period of the preceding year, except in
each case for increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
(vi) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii), (iv) and (v) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are included in or
can be derived from (a) the audited consolidated financial statements and
related financial statement schedules, or (b) the unaudited condensed
consolidated financial statements, or (c) analyses prepared by the Company from
accounting records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared such amounts, percentages
and financial information with (a) the audited consolidated financial statements
and related financial statement schedules, or (b) the unaudited condensed
consolidated financial statements, or (c) analyses prepared by the Company from
accounting records of the Company and its subsidiaries, and have found them to
be in agreement except as indicated in such letter.
All references in this Annex II to the Prospectus shall be deemed to refer to
the Prospectus as amended or supplemented (including the documents incorporated
by reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
-24-
<PAGE>
STITES & HARBISON
400 WEST MARKET STREET
SUITE 1800
LOUISVILLE, KENTUCKY 40202-3352
TELEPHONE: (502) 587-3400
FACSIMILE: (502) 587-6391
August 14, 1996
Providian Corporation
Providian Center
400 West Market Street
Louisville, Kentucky 40202
Ladies and Gentlemen:
We have acted as counsel to Providian Corporation (the "Company") in
connection with the preparation and filing of a Registration Statement on Form
S-3 (the "Registration Statement") relating to the registration under the
Securities Act of 1933, as amended (the "Act"), of up to $389,000,000 (or its
equivalent in any other currency or composite currency) in aggregate principal
amount of the Company's debt securities (the "Debt Securities"), to be offered
and sold by the Company from time to time in one or more series pursuant to Rule
415 under the Act.
In connection with this opinion, we have considered such matters of law and
examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates and other
instruments as we have deemed necessary or advisable for purposes of this
opinion, including (a) the Certificate of Incorporation, as amended, and Bylaws
of the Company, (b) resolutions adopted by the Board of Directors of the Company
at a meeting held on August 7, 1996 (the "Authorizing Resolutions"), and (c) the
Indenture dated as of January 1, 1994, between the Company and First Trust of
New York, National Association (successor to Morgan Guaranty Trust Company of
New York), as trustee (the "Trustee"), relating to the Debt Securities,
incorporated by reference as an exhibit to the Registration Statement (the
"Indenture"). With respect to various factual matters material to our opinion,
we have relied without independent investigation upon certificates of public
officials and certificates and other representations of officers of the Company.
Based upon and in reliance upon the foregoing, and subject to the
qualifications and assumptions set forth below, it is our opinion that, when, as
and if (a) the Registration Statement to
<PAGE>
Providian Corporation
Page 2
August 14, 1996
be filed with the Securities and Exchange Commission (the "Commission") becomes
effective pursuant to the Act and the rules and regulations of the Commission
thereunder, and subject to compliance with all applicable state securities, blue
sky and insurance laws; (b) the Indenture has been qualified under the Trust
Indenture Act of 1939, as amended; (c) the terms of the Debt Securities have
been established in accordance with the Indenture; and (d) the Debt Securities
have been duly executed by the Company, authenticated by the Trustee in
accordance with the terms and conditions of the Indenture, and sold by the
Company pursuant to the Authorizing Resolutions, all in the manner contemplated
by the Registration Statement and the Authorizing Resolutions, the Debt
Securities will be valid and binding obligations of the Company.
Our opinion is limited by and subject to the following:
(a) Enforceability of the Debt Securities may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent
conveyance or other laws relating to or affecting the enforcement of creditors'
rights generally or by general principles of equity.
(b) In rendering our opinion we have assumed that, at the time of each
issuance and sale of Debt Securities, the Company will be a corporation validly
existing and in good standing under the laws of the state of Delaware and the
Authorizing Resolutions will not have been rescinded or amended in any material
respect and will be in full force and effect.
(c) In our examination of all documents, certificates and records, we have
assumed without investigation the authenticity and completeness of all documents
submitted to us as originals, the conformity to the originals of all documents
submitted to us as copies and the authenticity and completeness of the originals
of all documents submitted to us as copies. We have also assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authority of all persons executing documents on behalf of the parties thereto
other than the Company, and the due authorization, execution and delivery of all
documents by the parties thereto other than the Company.
(d) Our opinion is based solely on and limited to the laws of the
Commonwealth of Kentucky, the Delaware General Corporation Law and the federal
laws of the United States of America. We express no opinion as to the laws of
any other jurisdiction.
<PAGE>
Providian Corporation
Page 3
August 14, 1996
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the section
captioned "Validity of Debt Securities" in the prospectus included as a part of
the Registration Statement.
Very truly yours,
STITES & HARBISON
CCB/plh
<PAGE>
EXHIBIT 12.1
PROVIDIAN CORPORATION
COMPUTATION OF HISTORICAL RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEARS ENDED DECEMBER 31
--------------- --------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------- ------- -------- -------- -------- -------- --------
(AMOUNTS IN MILLIONS EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS AS ADJUSTED:
Pretax Income from
continuing operations.. $ 292.8 $ 225.1 $ 506.3 $ 440.5 $ 487.1 $ 452.0 $ 345.9
Interest expense,
excluding interest on
banking deposits,
annuities and other
financial products..... 60.0 55.6 113.8 87.4 72.9 81.0 88.9
Portion of rent expense
representing the
interest factor........ 3.6 3.8 8.3 7.1 8.1 9.3 5.3
------- ------- -------- -------- -------- -------- --------
Subtotal............ 356.4 284.5 628.4 535.0 568.1 542.3 440.1
Interest expense on
banking deposits....... 66.8 55.1 105.0 61.9 54.0 64.5 87.0
------- ------- -------- -------- -------- -------- --------
Subtotal............ 423.2 339.6 733.4 596.9 622.1 606.8 527.1
Interest expense on
annuities and other
financial products..... 418.9 526.5 1,005.3 754.6 683.0 704.1 756.9
------- ------- -------- -------- -------- -------- --------
Total............... $ 842.1 $ 866.1 $1,738.7 $1,351.5 $1,305.1 $1,310.9 $1,284.0
======= ======= ======== ======== ======== ======== ========
FIXED CHARGES:
Interest incurred,
excluding interest
incurred on banking
deposits, annuities and
other financial
products............... $ 60.0 $ 55.6 $ 113.8 $ 87.4 $ 72.9 $ 81.0 $ 88.9
Portion of rent expense
representing the
interest factor........ 3.6 3.8 8.3 7.1 8.2 9.3 5.3
------- ------- -------- -------- -------- -------- --------
Subtotal............ 63.6 59.4 122.1 94.5 81.1 90.3 94.2
Interest incurred on
banking deposits....... 66.8 55.1 105.0 61.9 54.0 64.5 87.0
------- ------- -------- -------- -------- -------- --------
Subtotal............ 130.4 114.5 227.1 156.4 135.1 154.8 181.2
Interest incurred on
annuities and other
financial products..... 423.6 527.1 1,013.9 756.8 686.2 704.1 756.9
------- ------- -------- -------- -------- -------- --------
Total............... $ 554.0 $ 641.6 $1,241.0 $ 913.2 $ 821.3 $ 858.9 $ 938.1
======= ======= ======== ======== ======== ======== ========
RATIO OF EARNINGS TO
FIXED CHARGES (1)...... 5.6 4.8 5.1 5.7 7.0 6.0 4.7
RATIO OF EARNINGS TO
FIXED CHARGES,
INCLUDING INTEREST ON
BANKING DEPOSITS (2)... 3.2 3.0 3.2 3.8 4.6 3.9 2.9
RATIO OF EARNINGS TO
FIXED CHARGES,
INCLUDING INTEREST
ON BANKING DEPOSITS,
ANNUITIES AND OTHER
FINANCIAL
PRODUCTS (3)........... 1.5 1.3 1.4 1.5 1.6 1.5 1.4
</TABLE>
- --------
(1) For the purpose of computing the ratio of earnings to fixed charges,
earnings have been calculated by adding to pretax income from continuing
operations the amount of fixed charges reduced for capitalized interest and
increased for amortization of previously capitalized interest. Fixed
charges consists of interest on debt and a portion of net rental expense,
approximately one-third, deemed to represent interest.
(2) Computation of this ratio is the same as described in note (1) above except
that fixed charges also include interest on banking deposits.
(3) Computation of this ratio is the same as described in note (1) above except
that fixed charges also include interest on banking deposits, annuities and
other financial products.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) of Providian Corporation for the registration
of $389,000,000 in Debt Securities, the related Post-Effective Amendment No. 1
to Form S-3 Registration Statement No. 33-49719 from which $111,000,000 of
unsold securities are being combined with this registration, and the related
Prospectus relating to $500,000,000 in Debt Securities, and to the
incorporation by reference therein of our report dated February 5, 1996, with
respect to the consolidated financial statements and related schedules of
Providian Corporation included in or incorporated by reference in its Annual
Report (Form 10-K) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
Louisville, Kentucky
August 8, 1996
<PAGE>
PROVIDIAN CORPORATION
Assistant Secretary's Certificate
---------------------------------
I, R. Michael Slaven, hereby certify that I am now, and at all times
mentioned herein have been, the duly elected, qualified and acting Assistant
Secretary of Providian Corporation, a Delaware corporation (the "Company"), and
as such officer have access to and am familiar with the records of the Company
and am duly authorized to certify as to matters pertaining thereto, which
records reflect that:
a. Attached hereto as Exhibit A is a true and complete copy of resolutions
which were duly adopted by the Board of Directors of the Company at a meeting
duly called and held on August 7, 1996, at which a quorum was present and acting
throughout; and
b. Such resolutions have not been amended, modified or rescinded in any
respect and remain in full force and effect on the date hereof.
Dated: August 13, 1996
/s/ R. Michael Slaven
---------------------------
R. Michael Slaven
Assistant Secretary
<PAGE>
EXHIBIT A
RESOLUTIONS OF THE BOARD OF DIRECTORS OF
PROVIDIAN CORPORATION
AUGUST 7, 1996
RESOLVED, that the officers of the Corporation be, and each of them hereby
is, authorized, in the name and on behalf of the Corporation, to prepare,
execute and file, or cause to be prepared and filed, with the Securities and
Exchange Commission (the "SEC") one or more Registration Statements in the
appropriate form or forms with respect to the Securities, under the Securities
Act (including carrying forward the 1992 Unissued Securities into such
Registration Statement or Registration Statements pursuant to Rule 429 (or any
successor rule or regulation) under the Securities Act) of 1933, as amended (the
"Securities Act"), in substantially the form presented at this meeting, with
such changes therein, additions thereto and deletions therefrom as such
officers, or any of them, shall approve, such approval to be conclusively
evidenced by such officer's execution thereof, and any amendments (including,
without limitation, post-effective amendments) or supplements thereto and any
Prospectus, Prospectus Supplement or Pricing Supplement included therein,
together with all documents required as exhibits to said Registration Statement
or Statements, and all certificates, letters, instruments, applications and
other documents which may be required to be filed with the SEC with respect to
the registration and offering of the Securities, and to take any and all actions
that any such officer shall deem necessary or advisable in connection with such
Registration Statements and the qualification of the Indenture between the
Corporation and First Trust of New York (successor-in-interest to Morgan Trust
Company of New York), dated as of January 1, 1994 (the "Indenture"); and
FURTHER RESOLVED, that the officers of the Corporation be, and each of them
hereby is, authorized, in the name and on behalf of the Corporation, to execute
and deliver a power of attorney appointing, and the Corporation hereby appoints,
Robert L. Walker, Elaine J. Robinson and R. Michael Slaven, or any of them,
and/or any other persons designated by the Special Committee to act as
attorneys-in-fact for the Corporation and its directors and officers for the
purpose of executing and filing with the SEC, in its name and on its behalf, any
such Registration Statement and any and all amendments (including, without
limitation, post-effective amendments) or supplements thereto, with any exhibits
thereto and other documents in connection therewith.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, on this 7th day of August, 1996, the
undersigned directors and officers of Providian Corporation (the "Company") each
constitutes and appoints Robert L. Walker, Elaine J. Robinson and R. Michael
Slaven, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and re-substitution, for him or her and in his
or her name, place and stead, in any and all capacities, to sign a Registration
Statement on Form S-3 of the Company relating to the Company's sale of up to
$500,000,000 aggregate principal amount of its Debt Securities, and any and all
amendments thereto (including post-effective amendments), and to file the same,
with all exhibits thereto, and all other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his or her substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has subscribed these presents.
PROVIDIAN CORPORATION
By: /s/ Irving W. Bailey, II
------------------------------
Irving W. Bailey II
Chairman of the Board and
Chief Executive Officer
/s/ Irving W. Bailey, II /s/ Robert L. Walker
- ----------------------------- ------------------------------
Irving W. Bailey II Robert L. Walker
Chairman of the Board and Senior Vice President-Finance
Chief Executive Officer and Chief Financial Officer
/s/ Steven T. Downey /s/ John L. Clendenin
- ----------------------------- ------------------------------
Steven T. Downey John L. Clendenin, Director
Vice President and Controller
<PAGE>
/s/ John M. Cranor, III /s/ Lyle Everingham
- ------------------------------ ------------------------------
John M. Cranor III, Director Lyle Everingham, Director
/s/ Raymond V. Gilmartin /s/ J. David Grissom
- ------------------------------ ------------------------------
Raymond V. Gilmartin, Director J. David Grissom, Director
/s/ Watts Hill, Jr. /s/ Ned C. Lautenbach
- ------------------------------ ------------------------------
Watts Hill, Jr., Director Ned C. Lautenbach, Director
/s/ F. Warren McFarlan /s/ Shailesh J. Mehta
- ------------------------------ ------------------------------
F. Warren McFarlan, Director Shailesh J. Mehta
President, Chief Operating
Officer and Director
/s/ Larry D. Thompson
- ------------------------------ ------------------------------
Martha R. Seger, Director Larry D. Thompson, Director
-2-
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)______
________________
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
United States 13-3781471
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)
100 Wall Street, New York, NY 10005
(Address of principal executive offices) (Zip Code)
______________
FOR INFORMATION, CONTACT:
Dennis J. Calabrese, President
First Trust of New York, National Association
100 Wall Street, 16th Floor
New York, NY 10005
(212) 361-2506
________________
PROVIDIAN CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 51-0108922
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 West Market Street
Louisville, Kentucky 40232
________________
DEBT SECURITIES
(Title of the indenture securities)
<PAGE>
Item 1. GENERAL INFORMATION.
Furnish the following information as to the trustee --
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
---- -------
Comptroller of the Currency Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
Item 2. AFFILIATIONS WITH THE OBLIGORS.
If any obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. LIST OF EXHIBITS.
1. Articles of Association of First Trust of New York, National
Association, incorporated herein by reference to Exhibit 1 of
Form T-1, Registration No. 33-83774.
2. Certificate of Authority to Commence Business for First Trust of
New York, National Association, incorporated herein by reference
to Exhibit 2 of Form T-1, Registration No. 33-83774.
3. Authorization of First Trust of New York, National Association,
to exercise corporate trust powers, incorporated herein by
reference to Exhibit 3 of Form T-1, Registration No. 33-83774.
4. By-Laws of First Trust of New York, National Association,
incorporated herein by reference to Exhibit 4 of Form T-1,
Registration No. 33-83774.
5. Not applicable.
6. Consent of First Trust of New York, National Association,
required by Section 321(b) of the Act, incorporated herein by
reference to Exhibit 6 of Form T-1, Registration No. 33-83774.
<PAGE>
7. Report of Condition of First Trust of New York, National
Association, as of the close of business on June 30, 1996,
published pursuant to law or the requirements of its supervising
or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, First Trust of New York, National Association, a national banking
association organized and existing under the laws of the United States, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of July, 1996.
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION
By: /s/ MARLENE J. FAHEY
--------------------
Marlene J. Fahey
Vice President
<PAGE>
Exhibit 7
---------
FIRST TRUST OF NEW YORK, N.A.
STATEMENT OF FINANCIAL CONDITION
AS OF 06/30/96
($000'S)
<TABLE>
<CAPTION>
06/30/96
--------
<S> <C>
ASSETS
Cash and Due From Depository Institutions $ 29,167
Federal Reserve Stock 3,658
Fixed Assets 707
Intangible Assets 82,730
Other Assets 8,084
--------
TOTAL ASSETS $124,346
LIABILITIES
Other borrowed money (with a remaining maturity of one year or less) 23
Other Liabilities 6,184
--------
TOTAL LIABILITIES 6,207
EQUITY
Common and Preferred Stock 1,000
Surplus 120,932
Undivided Profits (3,793)
--------
TOTAL EQUITY CAPITAL 118,139
TOTAL LIABILITIES AND EQUITY CAPITAL $124,346
--------
</TABLE>
To the best of the undersigned's determination, as of this date the above
financial information is true and correct.
First Trust of New York, N.A
By: /s/ Marlene J. Fahey
--------------------
Vice President
Date: August 5, 1996
