<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 25, 1996
REG. NO. 333-14959, 333-14959-01, 333-14959-02, 333-14959-03
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 4
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
THE CHASE MANHATTAN CORPORATION CHASE CAPITAL I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CHASE CAPITAL II
DELAWARE CHASE CAPITAL III
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (EXACT NAME OF EACH REGISTRANT AS SPECIFIED IN ITS TRUST
ORGANIZATION) AGREEMENT)
13-2624488 DELAWARE
(I.R.S. EMPLOYER IDENTIFICATION NO.) (STATE OR OTHER JURISDICTION OF INCORPORATION
270 PARK AVENUE, NEW YORK, NEW YORK 10017 OR ORGANIZATION OF EACH REGISTRANT)
(212) 270-6000 13-391850
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, 13-391851
INCLUDING AREA CODE, 13-391852
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) (I.R.S. EMPLOYER IDENTIFICATION NO.)
C/O THE CHASE MANHATTAN CORPORATION
270 PARK AVENUE, NEW YORK, NEW YORK 10017
(212) 270-6000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE,
OF EACH REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
------------------------
ANTHONY J. HORAN
CORPORATE SECRETARY
THE CHASE MANHATTAN CORPORATION
270 PARK AVENUE, NEW YORK, NEW YORK 10017
(212) 270-6000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE OF EACH REGISTRANT)
WITH COPIES TO:
<TABLE>
<S> <C>
LEE MEYERSON MARK J. WELSHIMER
SIMPSON THACHER & BARTLETT SULLIVAN & CROMWELL
425 LEXINGTON AVENUE, NEW YORK, NEW YORK 10017 125 BROAD STREET, NEW YORK, NEW YORK 10004
(212) 455-2000 (212) 558-4000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the Registration Statement becomes effective.
------------------------
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 number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Junior Subordinated Deferrable Interest Debentures of
The Chase Manhattan Corporation(2)................. 20,000,000 $25 $500,000,000 $151,515.15
- ----------------------------------------------------------------------------------------------------------------------------------
Preferred Securities of Chase Capital I, Chase
Capital II, Chase Capital III...................... $500,000,000 $25 $500,000,000 NA
- ----------------------------------------------------------------------------------------------------------------------------------
The Chase Manhattan Corporation Guarantee with
respect to Preferred Securities(3)(4).............. NA NA NA NA
- ----------------------------------------------------------------------------------------------------------------------------------
Total................................................ $500,000,000(5) 100% $500,000,000(5) $151,515.15(6)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) The Junior Subordinated Deferrable Interest Debentures will be purchased by
Chase Capital I, Chase Capital II and Chase Capital III with the proceeds of
the sale of the Preferred Securities.
(3) No separate consideration will be received for The Chase Manhattan
Corporation Guarantee.
(4) This Registration Statement is deemed to cover the Junior Subordinated
Deferrable Interest Debentures of The Chase Manhattan Corporation, the
rights of holders of Junior Subordinated Deferrable Interest Debentures of
The Chase Manhattan Corporation under the Indenture, the rights of holders
of Preferred Securities of Chase Capital I, Chase Capital II and Chase
Capital III under each Trust Agreement, the rights of holders of the
Preferred Securities under the Guarantees, which, taken together, fully,
irrevocably and unconditionally guarantee all of the respective obligations
of Chase Capital I; Chase Capital II and Chase Capital III under the
Preferred Securities.
(5) Such amount represents the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at their principal amount and the
issue price rather than the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at an original issue discount. Such
amount also represents the initial public offering price of the Chase
Capital I, Chase Capital II and Chase Capital III Preferred Securities.
(6) Previously paid.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS TO
WHICH IT RELATES SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY
STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 25, 1996
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER , 1996
PREFERRED SECURITIES
CHASE CAPITAL I
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES,
SERIES A (QUIPS)(SM)*
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
THE CHASE MANHATTAN CORPORATION
---------------------
The % Cumulative Quarterly Income Preferred Securities, Series A (the
"Series A QUIPS"), offered hereby represent beneficial ownership interests in
Chase Capital I, a trust created under the laws of the State of Delaware (the
"Series A Issuer"). The Chase Manhattan Corporation, a Delaware corporation (the
"Corporation"), will be the owner of all the beneficial ownership interests
represented by common securities of the Series A Issuer ("Series A Common
Securities" and, collectively with the Series A QUIPS, the "Series A
Securities"). The Bank of New York is the Property Trustee of the
(Continued on next page)
---------------------
SEE "RISK FACTORS" BEGINNING ON PAGE S-6 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES A QUIPS.
---------------------
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY.
---------------------
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 SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
---------------------
<TABLE>
<CAPTION>
PROCEEDS TO
INITIAL PUBLIC UNDERWRITING THE SERIES A
OFFERING PRICE COMMISSION(1) ISSUER(2)(3)
------------------- ---------------------- -------------------
<S> <C> <C> <C>
Per Preferred Security.............. $ (2) $
Total............................... $ (2) $
</TABLE>
- ---------------
(1) The Series A Issuer and the Corporation have each agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(2) In view of the fact that the proceeds of the sale of the Series A QUIPS will
be invested in the Series A Subordinated Debentures, the Corporation has
agreed to pay to the Underwriters as compensation for their arranging the
investment therein of such proceeds $ . per Series A QUIPS (or $
in the aggregate). See "Underwriting."
(3) Expenses of the offering which are payable by the Corporation are estimated
to be $ .
---------------------
The Series A QUIPS offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that the Series A QUIPS will be ready for delivery in book-entry form only
through the facilities of The Depository Trust Company in New York, New York, on
or about , 1996, against payment therefor in immediately available
funds.
- ---------------
* "QUIPS" is a service mark of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
---------------------
The date of this Prospectus Supplement is November , 1996.
LOGO
<PAGE> 3
(cover page continued)
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A QUIPS
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
Series A Issuer. The Series A Issuer exists for the sole purpose of issuing the
Series A QUIPS and the Series A Common Securities and investing the proceeds
thereof in % Junior Subordinated Deferrable Interest Debentures, Series A
(the "Series A Subordinated Debentures"), to be issued by the Corporation. The
Series A Subordinated Debentures will mature on , 2026, which
date may be (i) shortened to a date not earlier than , 2001 or (ii)
extended to a date not later than , 2045, in either case if
certain conditions are met (including, in the case of a shortening of the Stated
Maturity (as defined herein), the Corporation having received prior approval of
the Board of Governors of the Federal Reserve System (the "Federal Reserve") to
do so if then required under applicable capital guidelines or policies). The
Series A QUIPS will have a preference under certain circumstances with respect
to cash distributions and amounts payable on liquidation or redemption over the
Series A Common Securities. See "Description of Preferred
Securities -- Subordination of Common Securities" in the accompanying
Prospectus.
Holders of the Series A QUIPS will be entitled to receive preferential
cumulative cash distributions accruing from the date of original issuance and
payable quarterly in arrears on the last day of March, June, September and
December of each year, commencing March 31, 1997, at the annual rate of %
of the Liquidation Amount (as defined in the accompanying Prospectus) of $25 per
Series A QUIPS ("Distributions"). Subject to certain exceptions, as described
herein, the Corporation has the right to defer payment of interest on the Series
A Subordinated Debentures at any time or from time to time for a period not
exceeding 20 consecutive quarters with respect to each deferral period (each, an
"Extension Period"), provided that no Extension Period may extend beyond the
Stated Maturity of the Series A Subordinated Debentures. Upon the termination of
any such Extension Period and the payment of all interest then accrued and
unpaid (together with interest thereon at the rate of %, compounded
quarterly, to the extent permitted by applicable law), the Corporation may elect
to begin a new Extension Period subject to the requirements set forth herein. If
interest payments on the Series A Subordinated Debentures are so deferred,
Distributions on the Series A QUIPS will also be deferred and the Corporation
will not be permitted, subject to certain exceptions described herein, to
declare or pay any cash distributions with respect to the Corporation's capital
stock or debt securities that rank pari passu with or junior to the Series A
Subordinated Debentures. During an Extension Period, interest on the Series A
Subordinated Debentures will continue to accrue (and the amount of Distributions
to which holders of the Series A QUIPS are entitled will accumulate) at the rate
of % per annum, compounded quarterly from the relevant payment date for
such interest, and holders of Series A QUIPS will be required to accrue interest
income for United States federal income tax purposes. See "Certain Terms of
Series A Subordinated Debentures -- Option to Defer Interest Payments" and
"Certain Federal Income Tax Consequences -- Interest Income and Original Issue
Discount."
The Series A Subordinated Debentures are unsecured and subordinated to all
Senior Debt (as defined in the accompanying Prospectus). At September 30, 1996,
the aggregate amount of Senior Debt outstanding was approximately $17 billion.
Because the Corporation is a holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary, including The Chase
Manhattan Bank, Chase Manhattan Bank USA, National Association, and Texas
Commerce Bank National Association, upon such subsidiary's liquidation or
reorganization or otherwise, is subject to the prior claims of creditors of that
subsidiary, except to the extent that the Corporation may itself be recognized
as a creditor of that subsidiary. Accordingly, the Series A Subordinated
Debentures (and therefore the Series A QUIPS) will be effectively subordinated
to all existing and
S-2
<PAGE> 4
(cover page continued)
future liabilities of the Corporation's subsidiaries, and holders thereof should
only look to the assets of the Corporation for payments on the Series A
Subordinated Debentures. See "Description of Subordinated
Debentures -- Subordination" in the accompanying Prospectus.
The Corporation has, through the Series A Guarantee, the Trust Agreement,
the Series A Subordinated Debentures and the Indenture (each as defined herein),
taken together, fully, irrevocably and unconditionally guaranteed all of the
Series A Issuer's obligations under the Series A QUIPS. See "Relationship Among
the Preferred Securities, the Corresponding Junior Subordinated Debentures and
the Guarantees -- Full and Unconditional Guarantee" in the accompanying
Prospectus. The Series A Guarantee of the Corporation guarantees the payment of
Distributions and payments on liquidation or redemption of the Series A QUIPS,
but only in each case to the extent of funds held by the Series A Issuer, as
described herein (the "Series A Guarantee"). See "Description of Guarantees" in
the accompanying Prospectus. If the Corporation does not make interest payments
on the Series A Subordinated Debentures held by the Series A Issuer, the Series
A Issuer will have insufficient funds to pay Distributions on the Series A
QUIPS. The Series A Guarantee does not cover payment of Distributions when the
Series A Issuer has insufficient funds to pay such Distributions. In such event,
a holder of Series A QUIPS may institute a legal proceeding directly against the
Corporation pursuant to the terms of the Indenture to enforce payment of amounts
equal to such Distributions to such holder. See "Description of Junior
Subordinated Debentures -- Enforcement of Certain Rights By Holders of Preferred
Securities" in the accompanying Prospectus. The obligations of the Corporation
under the Series A Guarantee are subordinate and junior in right of payment to
all Senior Debt of the Corporation.
The Series A QUIPS are subject to mandatory redemption, in whole or in
part, upon repayment of Series A Subordinated Debentures at maturity or their
earlier redemption. Subject to the Corporation having received prior approval of
the Federal Reserve to do so if then required under applicable capital
guidelines or policies, the Series A Subordinated Debentures are redeemable
prior to maturity at the option of the Corporation (i) on or after
, 2001, in whole at any time or in part from time to time, or
(ii) at any time, in whole (but not in part), upon the occurrence and
continuation of a Tax Event or a Capital Treatment Event (each as defined
herein). In any case the redemption price for the Series A QUIPS will be the
aggregate Liquidation Amount of such Series A QUIPS plus accumulated and unpaid
Distributions thereon to the date of redemption. See "Certain Terms of Series A
QUIPS -- Redemption."
The Corporation will have the right at any time to terminate the Series A
Issuer, subject to the Corporation having received prior approval of the Federal
Reserve to do so if then required under applicable capital guidelines or
policies. See "Certain Terms of Series A QUIPS -- Liquidation of Series A Issuer
and Distribution of Series A Subordinated Debentures to Holders." In the event
of the termination of the Series A Issuer, after satisfaction of liabilities to
creditors of the Series A Issuer as required by applicable law, the holders of
the Series A QUIPS will be entitled to receive a Liquidation Amount of $25 per
Series A QUIPS plus accumulated and unpaid Distributions thereon to the date of
payment, which may be in the form of a distribution of such amount in Series A
Subordinated Debentures in exchange therefor, subject to certain exceptions. See
"Description of Preferred Securities -- Liquidation Distribution Upon
Termination" in the accompanying Prospectus.
Application will be made to list the Series A QUIPS on the New York Stock
Exchange under the symbol " ". If Series A Subordinated Debentures are
distributed to the holders of Series A QUIPS in exchange therefor upon the
liquidation of the Series A Issuer, the Corporation will use its best efforts to
list the Series A Subordinated Debentures on the New York Stock Exchange or such
other stock exchanges or automated quotation systems, if any, on which the
Series A QUIPS are then listed or traded.
S-3
<PAGE> 5
(cover page continued)
The Series A QUIPS will be represented by global certificates registered in
the name of The Depository Trust Company ("DTC") or its nominee. Beneficial
interests in the Series A QUIPS will be shown on, and transfers thereof will be
effected only through, records maintained by participants in DTC. Except as
described in the accompanying Prospectus, Series A QUIPS in certificated form
will not be issued in exchange for the global certificates. See "Certain Terms
of Series A QUIPS -- Registration of Series A QUIPS."
S-4
<PAGE> 6
The information in this Prospectus Supplement supplements, and should be
read in conjunction with, the information contained in the accompanying
Prospectus. As used herein, (i) the "Indenture" means the Junior Subordinated
Indenture, as amended and supplemented from time to time, between the
Corporation and The Bank of New York, as trustee (the "Debenture Trustee"), and
(ii) the "Trust Agreement" means the Amended and Restated Trust Agreement
relating to the Series A Issuer among the Corporation, as Depositor, The Bank of
New York, as Property Trustee (the "Property Trustee"), The Bank of New York
(Delaware), as Delaware Trustee (the "Delaware Trustee"), and the Administrative
Trustees named therein (collectively, with the Property Trustee and Delaware
Trustee, the "Issuer Trustees"). Each of the other capitalized terms used in
this Prospectus Supplement and not otherwise defined in this Prospectus
Supplement has the meaning set forth in the accompanying Prospectus.
S-5
<PAGE> 7
RISK FACTORS
Prospective purchasers of the Series A QUIPS should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters.
In addition, because holders of Series A QUIPS may receive Series A Subordinated
Debentures in exchange therefor upon liquidation of the Series A Issuer,
prospective purchasers of Series A QUIPS are also making an investment decision
with regard to the Series A Subordinated Debentures and should carefully review
all the information regarding the Series A Subordinated Debentures contained
herein.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES A GUARANTEE AND THE SERIES
A SUBORDINATED DEBENTURES
The obligations of the Corporation under the Series A Guarantee issued by
the Corporation for the benefit of the holders of Series A Securities and under
the Series A Subordinated Debentures are unsecured and rank subordinate and
junior in right of payment to all Senior Debt of the Corporation. At September
30, 1996, the aggregate amount of Senior Debt of the Corporation outstanding was
approximately $17 billion. Because the Corporation is a holding company, the
right of the Corporation to participate in any distribution of the assets of any
subsidiary, including The Chase Manhattan Bank, Chase Manhattan Bank USA,
National Association, and Texas Commerce Bank National Association, upon such
subsidiary's liquidation or reorganization or otherwise, is subject to the prior
claims of creditors of that subsidiary, except to the extent that the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Series A Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of Series A Subordinated Debentures should look only
to the assets of the Corporation for payments on the Series A Subordinated
Debentures. See "The Chase Manhattan Corporation." None of the Indenture, the
Series A Guarantee or the Trust Agreement places any limitation on the amount of
secured or unsecured debt, including Senior Debt, that may be incurred by the
Corporation. See "Description of Guarantees -- Status of the Guarantees" and
"Description of Junior Subordinated Debentures -- Subordination" in the
accompanying Prospectus.
The ability of the Series A Issuer to pay amounts due on the Series A QUIPS
is solely dependent upon the Corporation making payments on the Series A
Subordinated Debentures as and when required.
OPTION TO DEFER INTEREST PAYMENT; TAX CONSEQUENCES; MARKET PRICE CONSEQUENCES
So long as no event of default under the Indenture has occurred or is
continuing, the Corporation has the right under the Indenture to defer payment
of interest on the Series A Subordinated Debentures at any time or from time to
time for a period not exceeding 20 consecutive quarters with respect to each
Extension Period, provided that no Extension Period may extend beyond the Stated
Maturity of the Series A Subordinated Debentures. As a consequence of any such
deferral, quarterly Distributions on the Series A QUIPS by the Series A Issuer
will also be deferred (and the amount of Distributions to which holders of the
Series A QUIPS are entitled will accumulate additional Distributions thereon at
the rate of % per annum, compounded quarterly from the relevant payment
date for such Distributions) during any such Extension Period. During any such
Extension Period, the Corporation may not, and may not permit any subsidiary of
the Corporation to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Corporation's capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Corporation (including other series of Junior Subordinated Debentures) that rank
pari passu with or junior in interest to the Series A Subordinated Debentures or
(iii) make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation if such
guarantee ranks pari passu with or junior in interest to the Series A
Subordinated Debentures (other than (a) dividends or distributions in capital
stock of the
S-6
<PAGE> 8
Corporation, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan or the redemption or repurchase of
any such rights pursuant thereto, (c) payments under the Series A Guarantee and
(d) purchases of common stock related to the issuance of common stock or rights
under any of the Corporation's benefit plans for its directors, officers or
employees, related to the issuance of common stock or rights under a dividend
reinvestment and stock purchase plan, or related to the issuance of common stock
(or securities convertible into or exchangeable for common stock) as
consideration in an acquisition transaction). Prior to the termination of any
such Extension Period, the Corporation may further defer the payment of
interest, provided that no Extension Period may exceed 20 consecutive quarters
or extend beyond the Stated Maturity of the Series A Subordinated Debentures.
Upon the termination of any Extension Period and the payment of all interest
then accrued and unpaid (together with interest thereon at the annual rate of
%, compounded quarterly from the interest payment date for such interest, to
the extent permitted by applicable law), the Corporation may elect to begin a
new Extension Period subject to the above requirements. There is no limitation
on the number of times that the Corporation may elect to begin an Extension
Period. See "Certain Terms of Series A QUIPS -- Distributions" and "Certain
Terms of Series A Subordinated Debentures -- Option to Defer Interest Payments."
Should an Extension Period occur, a holder of Series A QUIPS will be
required to accrue income (in the form of original issue discount) in respect of
its pro rata share of the Series A Subordinated Debentures held by the Series A
Issuer for United States federal income tax purposes. As a result, a holder of
Series A QUIPS will be required to include such income in gross income for
United States federal income tax purposes in advance of the receipt of cash
attributable to such income, and will not receive the cash related to such
income from the Series A Issuer if the holder disposes of the Series A QUIPS
prior to the record date for the payment of Distributions. See "Certain Federal
Income Tax Consequences -- Interest Income and Original Issue Discount" and
"-- Sales or Redemption of Series A QUIPS."
The Corporation has no current intention of exercising its right to defer
payments of interest on the Series A Subordinated Debentures. However, should
the Corporation elect to exercise such right in the future, the market price of
the Series A QUIPS is likely to be affected. A holder that disposes of its
Series A QUIPS during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its Series A QUIPS.
TAX EVENT OR CAPITAL TREATMENT EVENT -- REDEMPTION
Upon the occurrence and continuation of a Tax Event or Capital Treatment
Event (whether occurring before or after , 2001), the Corporation
has the right to redeem the Series A Subordinated Debentures in whole (but not
in part) prior to December 31, 2006 and within 90 days following the occurrence
of such Tax Event or Capital Treatment Event and thereby cause a mandatory
redemption of the Series A QUIPS. The exercise of such right is subject to the
Corporation having received prior approval of the Federal Reserve to do so if
then required under applicable capital guidelines or policies.
A "Tax Event" means the receipt by the Series A Issuer of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced proposed change) in, the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such proposed change, pronouncement or decision is announced on or after the
date of issuance of the Series A QUIPS under the Trust Agreement, there is more
than an insubstantial risk that (i) the Series A Issuer is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the Series A Subordinated
Debentures, (ii) interest payable by the Corporation on the Series A
Subordinated Debentures is not, or within 90 days of the date of such opinion,
will not be, deductible by the Corporation, in whole or in part, for United
States federal income tax purposes or
S-7
<PAGE> 9
(iii) the Series A Issuer is, or will be within 90 days of the date of the
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
A "Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of any amendment to, or change (including any
proposed change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such proposed change, pronouncement, action or decision is
announced on or after the date of issuance of the Series A QUIPS under the Trust
Agreement, there is more than an insubstantial risk that the Corporation will
not be entitled to treat an amount equal to the Liquidation Amount of the Series
A QUIPS as "Tier 1 Capital" (or the then equivalent thereof) for purposes of the
capital adequacy guidelines of the Federal Reserve, as then in effect and
applicable to the Corporation.
See "Risk Factors -- Possible Tax Law Changes Affecting the Series A QUIPS"
for a discussion of certain legislative proposals that, if adopted, could give
rise to a Tax Event, which may permit the Corporation to cause a redemption of
the Series A QUIPS prior to , 2001.
EXCHANGE OF SERIES A QUIPS FOR SERIES A SUBORDINATED DEBENTURES
The Corporation will have the right at any time to terminate the Series A
Issuer and, after satisfaction of liabilities to creditors of the Series A
Issuer as required by applicable law, cause the Series A Subordinated Debentures
to be distributed to the holders of the Series A QUIPS in exchange therefor upon
liquidation of the Series A Issuer. The exercise of such right is subject to the
Corporation having received prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies. See "Certain Terms of
Series A QUIPS -- Liquidation of Series A Issuer and Distribution of Series A
Subordinated Debentures to Holders."
Under current United States federal income tax law and interpretations and
assuming, as expected, the Series A Issuer is classified as a grantor trust for
such purposes, a distribution of the Series A Subordinated Debentures upon a
liquidation of the Series A Issuer should not be a taxable event to holders of
the Series A QUIPS. However, if a Tax Event were to occur which would cause the
Series A Issuer to be subject to United States federal income tax with respect
to income received or accrued on the Series A Subordinated Debentures, a
distribution of the Series A Subordinated Debentures by the Series A Issuer
could be a taxable event to the Series A Issuer and the holders of the Series A
QUIPS. See "Certain Federal Income Tax Consequences -- Distribution of Series A
Subordinated Debentures to Holders of Series A QUIPS."
SHORTENING OF STATED MATURITY OF SERIES A SUBORDINATED DEBENTURES
The Corporation will have the right at any time to shorten the maturity of
the Series A Subordinated Debentures to a date not earlier than ,
2001 and thereby cause the Series A QUIPS to be redeemed on such earlier date.
The exercise of such right is subject to the Corporation having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies.
EXTENSION OF STATED MATURITY OF SERIES A SUBORDINATED DEBENTURES
The Corporation will also have the right to extend the maturity of the
Series A Subordinated Debentures, whether or not the Series A Issuer is
liquidated and the Series A Subordinated Debentures are distributed to holders
of the Series A QUIPS, to a date no later than the 49th anniversary of the
initial issuance of the Series A QUIPS, provided that the Corporation can extend
the maturity only if at the time such election is made and at the time of such
extension (i) the Corporation is not in bankruptcy, otherwise insolvent or in
liquidation, (ii) the Corporation is not in default in the payment of any
interest or principal on the Series A Subordinated Debentures, (iii) if the
Series A issuer has not been liquidated, the Series A Issuer is not in arrears
on payments of
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Distributions on the Series A QUIPS and no deferred Distributions are
accumulated and (iv) the Series A Subordinated Debentures are rated not less
than BBB- by Standard & Poor's Ratings Services or Baa3 by Moody's Investors
Service, Inc. or the equivalent by any other nationally recognized statistical
rating organization. To the extent that the Stated Maturity of the Series A
Subordinated Debentures is extended at such time as the Series A QUIPS are
outstanding, the Series A QUIPS would remain outstanding until such extended
date or until redeemed at an earlier date.
MARKET PRICES
There can be no assurance as to the market prices for Series A QUIPS or
Series A Subordinated Debentures that may be distributed in exchange for Series
A QUIPS upon liquidation of the Series A Issuer. Accordingly, the Series A QUIPS
that an investor may purchase, whether pursuant to the offer made hereby or in
the secondary market, or the Series A Subordinated Debentures that a holder of
Series A QUIPS may receive on liquidation of the Series A Issuer, may trade at a
discount to the price that the investor paid to purchase the Series A QUIPS
offered hereby. As a result of the existence of the Corporation's right to defer
interest payments, the market price of the Series A QUIPS (which represent
beneficial ownership interests in the Series A Issuer) may be more volatile than
the market prices of other debt securities that are not subject to such optional
deferrals. In addition, because the Corporation has the right (i) to shorten the
Stated Maturity of the Series A Subordinated Debentures (subject to prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies) or (ii) to extend the maturity of the Series A
Subordinated Debentures (subject to the conditions described above), there can
be no assurance that the Corporation will not exercise its option to change the
maturity of the Series A Subordinated Debentures as permitted by the terms
thereof and of the Indenture. See "Certain Terms of Series A Subordinated
Debentures" and "Description of Junior Subordinated Debentures -- Corresponding
Junior Subordinated Debentures" in the accompanying Prospectus.
RIGHTS UNDER THE SERIES A GUARANTEE
The Series A Guarantee guarantees to the holders of the Series A Securities
the following payments, to the extent not paid by the Series A Issuer: (i) any
accumulated and unpaid Distributions required to be paid on the Series A
Securities, to the extent that the Series A Issuer has funds on hand available
therefor at such time, (ii) the redemption price with respect to any Series A
Securities called for redemption, to the extent that the Series A Issuer has
funds on hand available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of the Series A Issuer
(unless the Series A Subordinated Debentures are distributed to holders of the
Series A Securities), the lesser of (a) the aggregate of the Liquidation Amount
and all accumulated and unpaid Distributions to the date of payment, to the
extent that the Series A Issuer has funds on hand available therefor at such
time, and (b) the amount of assets of the Series A Issuer remaining available
for distribution to holders of the Series A Securities after payment of
creditors of the Series A Issuer as required by applicable law. The Series A
Guarantee will be qualified as an indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The Bank of New York will act as
the indenture trustee under the Series A Guarantee (the "Guarantee Trustee") for
the purpose of compliance with the Trust Indenture Act and will hold the Series
A Guarantee for the benefit of the holders of the Series A Securities. The Bank
of New York will also act as Debenture Trustee for the Series A Subordinated
Debentures and as Property Trustee and The Bank of New York (Delaware) will act
as Delaware Trustee under the Trust Agreement.
The holders of not less than a majority in aggregate Liquidation Amount of
the Series A Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Series A Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee under the Series A Guarantee.
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<PAGE> 11
Any holder of the Series A Securities may institute a legal proceeding directly
against the Corporation to enforce its rights under the Series A Guarantee
without first instituting a legal proceeding against the Series A Issuer, the
Guarantee Trustee or any other person or entity. If the Corporation were to
default on its obligation to pay amounts payable under the Series A Subordinated
Debentures, the Series A Issuer would lack funds for the payment of
Distributions or amounts payable on redemption of the Series A Securities or
otherwise, and, in such event, holders of the Series A Securities would not be
able to rely upon the Series A Guarantee for payment of such amounts. Instead,
if an event of default under the Indenture shall have occurred and be continuing
and such event is attributable to the failure of the Corporation to pay interest
on or principal of the Series A Subordinated Debentures on the applicable
payment date, then a holder of Series A Securities may institute a legal
proceeding directly against the Corporation pursuant to the terms of the
Indenture for enforcement of payment to such holder of the principal of or
interest on such Series A Subordinated Debentures having a principal amount
equal to the aggregate Liquidation Amount of the Series A Securities of such
holder (a "Direct Action"). In connection with such Direct Action, the
Corporation will have a right of set-off under the Indenture to the extent of
any payment made by the Corporation to such holder of Series A Securities in the
Direct Action. Except as described herein, holders of Series A Securities will
not be able to exercise directly any other remedy available to the holders of
the Series A Subordinated Debentures or assert directly any other rights in
respect of the Series A Subordinated Debentures. See "Description of Junior
Subordinated Debentures -- Enforcement of Certain Rights by Holders of Preferred
Securities," "-- Debenture Events of Default" and "Description of Guarantees" in
the accompanying Prospectus. The Trust Agreement provides that each holder of
Series A Securities by acceptance thereof agrees to the provisions of the Series
A Guarantee and the Indenture.
LIMITED VOTING RIGHTS
Holders of Series A QUIPS generally will have limited voting rights
relating only to the modification of the Series A QUIPS and the exercise of the
Series A Issuer's rights as holder of Series A Subordinated Debentures and the
Series A Guarantee. Holders of Series A QUIPS will not be entitled to vote to
appoint, remove or replace the Property Trustee, the Delaware Trustee or any
Administrative Trustee, and such voting rights are vested exclusively in the
holder of the Series A Common Securities except, with respect to the Property
Trustee and the Delaware Trustee, upon the occurrence of certain events
described in the accompanying Prospectus. The Property Trustee, the
Administrative Trustees and the Corporation may amend the Trust Agreement
without the consent of holders of Series A QUIPS to ensure that the Series A
Issuer will be classified for United States federal income tax purposes as a
grantor trust unless such action materially and adversely affects the interests
of such holders. See "Description of Preferred Securities -- Voting Rights;
Amendment of Each Trust Agreement" and "-- Removal of Issuer Trustees" in the
accompanying Prospectus.
TRADING CHARACTERISTICS OF SERIES A QUIPS
Application will be made to list the Series A QUIPS on the New York Stock
Exchange. The Series A QUIPS may trade at prices that do not fully reflect the
value of accrued and unpaid interest with respect to the underlying Series A
Subordinated Debenture. See "Certain Federal Income Tax Consequences -- Interest
Income and Original Issue Discount" and "-- Sales or Redemption of Series A
QUIPS" for a discussion of the United States federal income tax consequences
that may result from a taxable disposition of the Series A QUIPS.
As indicated above, application will be made to list the Series A QUIPS on
the New York Stock Exchange. If the Series A QUIPS are not listed on a national
securities exchange or the NASDAQ National Market and the underwriters do not
make a market for the securities, the liquidity of the Series A QUIPS could be
adversely affected.
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POSSIBLE TAX LAW CHANGES AFFECTING THE SERIES A QUIPS
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
released which would, among other things, generally deny interest deductions for
interest on an instrument issued by a corporation that has a maximum weighted
average maturity of more than 40 years. The Bill would also generally deny
interest deductions for interest on an instrument issued by a corporation that
has a maximum term of more than 20 years and that is not shown as indebtedness
on the separate balance sheet of the issuer or, where the instrument is issued
to a related party (other than a corporation), where the holder or some other
related party issues a related instrument that is not shown as indebtedness on
the issuer's consolidated balance sheet. For purposes of determining the
weighted average maturity or the term of an instrument, any right to extend
would be treated as exercised. The above-described provisions of the Bill were
proposed to be effective generally for instruments issued on or after December
7, 1995. If either provision were to apply to the Series A Subordinated
Debentures, the Corporation would not be able to deduct interest on the Series A
Subordinated Debentures. However, on March 29, 1996, the Chairmen of the Senate
Finance and House Ways and Means Committees issued a joint statement (the "Joint
Statement") to the effect that it was their intention that the effective date of
the President's legislative proposals, if adopted, would be no earlier than the
date of appropriate Congressional action. In addition, subsequent to the
publication of the Joint Statement, Senator Daniel Patrick Moynihan and
Representatives Sam M. Gibbons and Charles B. Rangel wrote letters to Treasury
Department officials concurring with the view expressed in the Joint Statement
(the "Democrat Letters"). If the principles contained in the Joint Statement and
the Democrat Letters were followed and the Bill were enacted, such legislation
would not apply to the Series A Subordinated Debentures. There can be no
assurance, however, that current or future legislative proposals or final
legislation will not adversely affect the ability of the Corporation to deduct
interest on the Series A Subordinated Debentures or otherwise affect the tax
treatment of the transaction described herein. Such a change could give rise to
a Tax Event, which would permit the Corporation, upon approval of the Federal
Reserve if then required under applicable capital guidelines or policies, to
cause a redemption of the Series A QUIPS before , 2001. See "Certain
Terms of Series A Subordinated Debentures -- Redemption" in this Prospectus
Supplement and "Description of Preferred Securities -- Redemption or Exchange --
Tax Event Redemption" in the accompanying Prospectus. See also "Certain Federal
Income Tax Consequences -- Possible Tax Law Changes."
CHASE CAPITAL I
Chase Capital I (the "Series A Issuer") is a statutory business trust
created under Delaware law pursuant to (i) the Trust Agreement executed by the
Corporation, as Depositor, The Bank of New York, as Property Trustee, The Bank
of New York (Delaware), as Delaware Trustee, and the Administrative Trustees
named therein, and (ii) the filing of a certificate of trust with the Delaware
Secretary of State on October 28, 1996 and a restated certificate of trust with
the Delaware Secretary of State on November 13, 1996. The Series A Issuer's
business and affairs are conducted by the Issuer Trustees: The Bank of New York,
as Property Trustee, and The Bank of New York (Delaware), as Delaware Trustee,
and two individual Administrative Trustees who are employees or officers of or
affiliated with the Corporation. The Series A Issuer exists for the exclusive
purposes of (i) issuing and selling the Series A QUIPS and Series A Common
Securities, (ii) using the proceeds from the sale of Series A QUIPS and Series A
Common Securities to acquire Series A Subordinated Debentures issued by the
Corporation and (iii) engaging in only those other activities necessary or
incidental thereto (such as registering the transfer of the Series A
Securities). Accordingly, the Series A Subordinated Debentures will be the sole
assets of the Series A Issuer, and payments under the Series A Subordinated
Debentures will be the sole revenue of the Series A Issuer. All of the Series A
Common Securities will be owned by the Corporation. The Series A Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Series A QUIPS, except that upon the occurrence and continuance of an
event of default under the Trust Agreement
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resulting from an event of default under the Indenture, the rights of the
Corporation as holder of the Series A Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Series A QUIPS. See
"Description of Preferred Securities -- Subordination of Common Securities" in
the accompanying Prospectus. The Corporation will acquire Series A Common
Securities in an aggregate Liquidation Amount equal to 3% of the total capital
of the Series A Issuer. The Series A Issuer has a term of 55 years, but may
terminate earlier as provided in the Trust Agreement. The principal executive
office of the Series A Issuer is 270 Park Avenue, New York, New York 10017,
Attention: Secretary, and its telephone number is (212) 270-6000. See "The
Issuers" in the accompanying Prospectus.
It is anticipated that the Series A Issuer will not be subject to the
reporting requirements under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
THE CHASE MANHATTAN CORPORATION
GENERAL
The Corporation is a bank holding company organized under the laws of
Delaware in 1968 and registered under the Bank Holding Company Act of 1956, as
amended. On March 31, 1996, The Chase Manhattan Corporation ("Old Chase") merged
with and into Chemical Banking Corporation, and Chemical Banking Corporation,
which was the surviving corporation in the merger, changed its name to "The
Chase Manhattan Corporation." As a result of the merger, the Corporation has
become the largest banking institution in the United States, with over $300
billion in assets and $20 billion in stockholders' equity.
The principal bank subsidiaries of the Corporation are The Chase Manhattan
Bank, a New York banking corporation (the "Bank"), Chase Manhattan Bank USA,
National Association ("Chase USA"), headquartered in Wilmington, Delaware, and
Texas Commerce Bank National Association ("Texas Commerce").
The merger of Old Chase with and into Chemical Banking Corporation was
accounted for as a pooling-of-interests and, accordingly, the information
presented in this Prospectus Supplement reflects the combined results of Old
Chase and the Corporation as if the merger had been in effect for all periods
presented.
BUSINESS
The activities of the Corporation and its subsidiaries are internally
organized, for management information purposes, into five principal lines of
business. A brief description of each principal line of business is presented
below.
Global Bank
The Global Bank provides banking, financial advisory, trading and
investment services to corporations and public-sector clients worldwide through
a network of offices in 52 countries, including major operations in all key
international financial centers. The Global Bank includes: Global Client
Management (focusing on corporate clients, credit and general advisory); Global
Investment Banking (including acquisition finance, syndicated finance, high
yield finance, private placements, leasing, mergers and acquisitions, and other
global investment banking activities); Global Markets (foreign exchange dealing
and trading, derivatives (including equity and commodity derivatives) trading
and structuring, risk management, securities structuring, underwriting, trading
and sales, and the Corporation's funding and securities investment activities)
and Chase Capital Partners, a venture capital subsidiary of the Corporation
(venture capital and mezzanine finance). In addition, the Global Asset
Management and Private Banking group serves high net worth individuals
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worldwide with banking and investment services, including the Vista family of
mutual funds and Vista unit trust funds.
Regional and Consumer Banking
Regional and Consumer Banking includes: Credit Cards (Chase cardmember
services); Deposits and Investments (consumer banking and commercial and
professional banking); Mortgage Banking; National Consumer Finance (home equity
secured lending, student lending and other consumer lending); International
Consumer (consumer activities in Asia and Latin America); Middle Market and
Community Development (regional commercial banking); Texas Commerce; and the
Corporation's franchise in northeastern New Jersey, where its banking subsidiary
has 39 branches and private banking operations. The Corporation maintains a
leading market share position in serving the financial needs of consumers,
middle market commercial enterprises and small businesses in the New York
metropolitan area. Texas Commerce is a leader in providing financial products
and services to businesses and individuals throughout Texas and is the primary
bank for more large corporations and middle market companies than any other bank
in Texas.
Global Services
Global Services includes custody, cash management, payments, trade
services, trust and other fiduciary services. At December 31, 1995, the
Corporation was custodian or trustee for approximately $2.9 trillion of assets.
Terminal Businesses; Corporate
Terminal Businesses represent discontinued portfolios, which are primarily
the refinancing country debt portfolio and the Corporation's nonperforming
commercial real estate problem asset and nonperforming portfolio, primarily at
the Bank. Corporate includes the management results attributed to the parent
company; the Corporation's investment in The CIT Group Holdings, Inc.; the
impact of credit card securitizations; and some effects remaining at the
corporate level after the implementation of management accounting policies.
The Corporation is a Delaware corporation with its principal office at 270
Park Avenue, New York, New York 10017. Its telephone number is (212) 270-6000.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Corporation's consolidated ratios of
earnings to fixed charges and ratios of earnings to combined fixed charges and
preferred stock dividend requirements for each of the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------- --------------------------------------------
1996 1995 1994 1993 1992 1991
-------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Excluding Interest on Deposits..... 1.59 1.90 1.86 1.62 1.50 1.20
Including Interest on Deposits..... 1.28 1.41 1.42 1.31 1.21 1.07
Earnings to Combined Fixed Charges
and Preferred Stock Dividend
Requirements:
Excluding Interest on Deposits..... 1.53 1.82 1.76 1.52 1.41 1.14
Including Interest on Deposits..... 1.26 1.38 1.38 1.27 1.18 1.05
</TABLE>
For purposes of computing the ratios of earnings to fixed charges and of
earnings to combined fixed charges and preferred stock dividend requirements,
earnings represent net income from
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continuing operations plus total taxes based on income and fixed charges. Fixed
charges, excluding interest on deposits, include interest expense (other than on
deposits), one-third (the proportion deemed representative of the interest
factor) of rents, net of income from subleases, and capitalized interest. Fixed
charges, including interest on deposits, include all interest expense, one-third
(the proportion deemed representative of the interest factor) of rents, net of
income from subleases, and capitalized interest.
USE OF PROCEEDS
All of the proceeds from the sale of the Series A QUIPS will be invested by
the Series A Issuer in Series A Subordinated Debentures. The Corporation intends
that the proceeds from the sale of the Series A Subordinated Debentures will be
added to its general corporate funds and will be used for general corporate
purposes, which may include (depending upon the Corporation's capital
requirements, market conditions and other factors) the repurchase or redemption
of shares of its outstanding common and preferred stock.
The Corporation is required by the Federal Reserve to maintain certain
levels of capital for bank regulatory purposes. On October 21, 1996, the Federal
Reserve announced that cumulative preferred securities having the
characteristics of the Series A QUIPS could be included as Tier 1 capital for
bank holding companies. Such Tier 1 capital treatment, together with the
Corporation's ability to deduct, for federal income tax purposes, interest
payable on the Series A Subordinated Debentures, will provide the Corporation
with a more cost-effective means of obtaining capital for bank regulatory
purposes than if the Corporation were to issue preferred stock.
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<PAGE> 16
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation and its subsidiaries as of September 30, 1996 and as adjusted to
give effect to the consummation of the offering of the Series A QUIPS. The
following data should be read in conjunction with the consolidated financial
statements and notes thereto of the Corporation and its subsidiaries
incorporated herein by reference.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
------------------------
AS
ACTUAL ADJUSTED
-------- --------
<S> <C> <C>
(IN MILLIONS)
Total long-term debt................................ $ 12,379 $
-------- --------
Guaranteed Preferred Beneficial Interests in
Corporation's Junior Subordinated Deferrable
Interest Debentures(a)....................... --
Preferred Stock of Subsidiary.................. 550(b)
-------- --------
Stockholders' Equity
Preferred Stock................................ 2,650
Common Stock................................... 440
Capital Surplus................................ 10,444
Retained Earnings.............................. 8,091
Net Unrealized Loss on Securities Available for
Sale Net of Taxes............................ (480)
Treasury Stock, At Cost........................ (5)
-------- --------
Total Stockholders' Equity................ $ 21,140 $
-------- --------
Total Capitalization................................ $ 34,069 $
======== ========
</TABLE>
- ---------------
(a) As described herein, the sole assets of the Series A Issuer will be
approximately $ principal amount of Series A Subordinated Debentures
issued by the Corporation to the Series A Issuer. The Series A Subordinated
Debentures will bear interest at the rate of % per annum, will mature on
, 2026, which date may be shortened to a date not earlier than
, 2001 or extended to a date not later than , 2045,
in either case if certain conditions are met. The Corporation owns all of the
Series A Common Securities of the Series A Issuer.
It is anticipated that the Series A Issuer will not be subject to the
reporting requirements under the Exchange Act.
(b) Reflects the issuance of preferred stock in September 1996 by Chase
Preferred Capital Corporation, a wholly owned subsidiary of the Bank, which has
elected to be treated for Federal income tax purposes as a real estate
investment trust.
ACCOUNTING TREATMENT
For financial reporting purposes, the Series A Issuer will be treated as a
subsidiary of the Corporation and, accordingly, the accounts of the Series A
Issuer will be included in the consolidated financial statements of the
Corporation. The Series A QUIPS will be presented as a separate line item in the
consolidated balance sheets of the Corporation under the caption "Guaranteed
Preferred Beneficial Interests in Corporation's Junior Subordinated Deferrable
Interest Debentures" and appropriate disclosures about the Series A QUIPS, the
Series A Guarantee and the Series A Subordinated Debentures will be included in
the notes to the consolidated financial statements. For financial reporting
purposes, the Corporation will record Distributions payable on the Series A
QUIPS as an expense in the consolidated statements of income.
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The Corporation has agreed that future financial reports of the Corporation
will: (i) present the Preferred Securities issued by other Issuer trusts on the
Corporation's balance sheet as a separate line term entitled "Guaranteed
Preferred Beneficial Interests in Corporation's Junior Subordinated Deferrable
Interest Debentures"; (ii) include in a footnote to the financial statements
disclosure that the sole assets of the trusts are the Junior Subordinated
Debentures (specifying as to each trust the principal amount, interest rate and
maturity date of Junior Subordinated Debentures held); and (iii) if Staff
Accounting Bulletin 53 treatment is sought, then include, in an audited footnote
to the financial statements, disclosure that (a) the trusts are wholly owned,
(b) the sole assets of the trusts are the Junior Subordinated Debentures
(specifying as to each trust the principal amount, interest rate and maturity
date of the Junior Subordinated Debentures held), and (c) the obligations of the
Corporation under the Junior Subordinated Debentures, the Indenture, the
relevant trust agreement and the Guarantees, in the aggregate, constitute a full
and unconditional guarantee by the Corporation of the trusts' obligations under
the Preferred Securities issued by each trust.
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CERTAIN TERMS OF SERIES A QUIPS
GENERAL
The following summary of certain terms and provisions of the Series A QUIPS
supplements the description of the terms and provisions of the Preferred
Securities set forth in the accompanying Prospectus under the heading
"Description of Preferred Securities," to which description reference is hereby
made. This summary of certain terms and provisions of the Series A QUIPS, which
describes the material provisions thereof, does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, the Trust
Agreement, to which reference is hereby made. The form of the Trust Agreement
has been filed as an exhibit to the Registration Statement of which this
Prospectus Supplement and accompanying Prospectus form a part.
DISTRIBUTIONS
The Series A QUIPS represent beneficial ownership interests in the Series A
Issuer, and Distributions on each Series A QUIPS will be payable at the annual
rate of % of the stated Liquidation Amount of $25, payable quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year, to the
holders of the Series A QUIPS on the relevant record dates. The record dates for
the Series A QUIPS will be, for so long as the Series A QUIPS remain in
book-entry form, one Business Day (as defined in the accompanying Prospectus)
prior to the relevant Distribution payment date and, in the event the Series A
QUIPS are not in book-entry form, the 15th day of the month in which the
relevant Distribution payment date occurs. Distributions will accumulate from
the date of original issuance. The first Distribution payment date for the
Series A QUIPS will be March 31, 1997. The amount of Distributions payable for
any period will be computed on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which Distributions are payable on the
Series A QUIPS is not a Business Day, then payment of the Distributions payable
on such date will be made on the next succeeding day that is a Business Day (and
without any additional Distributions or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date such payment was
originally payable. See "Description of Preferred Securities -- Distributions"
in the accompanying Prospectus.
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture to defer payment
of interest on the Series A Subordinated Debentures at any time or from time to
time for a period not exceeding 20 consecutive quarters with respect to each
Extension Period, provided that no Extension Period may extend beyond the Stated
Maturity of the Series A Subordinated Debentures. As a consequence of any such
deferral of interest payments by the Corporation, quarterly Distributions on the
Series A QUIPS by the Series A Issuer will also be deferred during any such
Extension Period. Distributions to which holders of the Series A QUIPS are
entitled will accumulate additional Distributions thereon at the rate per annum
of % thereof, compounded quarterly from the relevant payment date for such
Distributions. The term "Distributions" as used herein shall include any such
additional Distributions. During any such Extension Period, the Corporation may
not, and may not permit any subsidiary of the Corporation to, (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock,
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including other
series of Junior Subordinated Debentures) that rank pari passu with or junior in
interest to the Series A Subordinated Debentures or (iii) make any guarantee
payments with respect to any guarantee by the Corporation of the debt securities
of any subsidiary of the Corporation if such guarantee ranks pari passu with or
junior in interest to the Series A Subordinated Debentures (other than (a)
dividends or distributions in capital stock of the Corporation, (b) any
declaration of a dividend in connection with the implemen-
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<PAGE> 19
tation of a stockholders' rights plan or the redemption or repurchase of any
such rights pursuant thereto, (c) payments under the Series A Guarantee and (d)
purchases of common stock related to the issuance of common stock or rights
under any of the Corporation's benefit plans for its directors, officers or
employees related to the issuance of common stock or rights under a dividend
reinvestment and stock purchase plan, or related to the issuance of common stock
(or securities convertible into or exchangeable for common stock) as
consideration in an acquisition transaction). Prior to the termination of any
such Extension Period, the Corporation may further defer the payment of interest
on the Series A Subordinated Debentures, provided that no Extension Period may
exceed 20 consecutive quarters or extend beyond the Stated Maturity of the
Series A Subordinated Debentures. Upon the termination of any such Extension
Period and the payment of all interest then accrued and unpaid (together with
interest thereon at the rate of %, compounded quarterly, to the extent
permitted by applicable law), the Corporation may elect to begin a new Extension
Period. There is no limitation on the number of times that the Corporation may
elect to begin an Extension Period. See "Certain Terms of Series A Subordinated
Debentures -- Option to Defer Interest Payments" and "Certain Federal Income Tax
Consequences -- Interest Income and Original Issue Discount."
The Corporation has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series A
Subordinated Debentures.
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Series A
Subordinated Debentures, whether at Stated Maturity or upon earlier redemption
as provided in the Indenture, the proceeds from such repayment or redemption
shall be applied by the Property Trustee to redeem a Like Amount (as defined in
the accompanying Prospectus) of the Series A Securities, upon not less than 30
nor more than 60 days notice prior to the date fixed for repayment or
redemption, at a redemption price, with respect to the Series A QUIPS (the
"Redemption Price"), equal to the aggregate Liquidation Amount of such Series A
QUIPS plus accumulated and unpaid Distributions thereon to the date of
redemption (the "Redemption Date"). See "Description of Preferred
Securities -- Redemption or Exchange" in the accompanying Prospectus. For a
description of the Stated Maturity and redemption provisions of the Series A
Subordinated Debentures, see "Certain Terms of Series A Subordinated
Debentures -- General" and " -- Redemption."
LIQUIDATION OF SERIES A ISSUER AND DISTRIBUTION OF SERIES A SUBORDINATED
DEBENTURES TO HOLDERS
The Corporation will have the right at any time to terminate the Series A
Issuer and cause the Series A Subordinated Debentures to be distributed to the
holders of the Series A QUIPS in exchange therefor upon liquidation of the
Series A Issuer. Such right is subject to the Corporation having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies.
Under current United States federal income tax law and interpretations and
assuming, as expected, the Series A Issuer is treated as a grantor trust, a
distribution of Series A Subordinated Debentures in exchange for the Series A
QUIPS should not be a taxable event to holders of the Series A QUIPS. Should
there be a change in law, a change in legal interpretation, a Tax Event or other
circumstances, however, the distribution could be a taxable event to holders of
the Series A QUIPS. See "Certain Federal Income Tax Consequences -- Distribution
of Series A Subordinated Debentures to Holders of Series A QUIPS." If the
Corporation elects neither to redeem the Series A Subordinated Debentures prior
to maturity nor to liquidate the Series A Issuer and distribute the Series A
Subordinated Debentures to holders of the Series A QUIPS in exchange therefor,
the Series A QUIPS will remain outstanding until the Stated Maturity of the
Series A Subordinated Debentures.
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If the Corporation elects to liquidate the Series A Issuer and thereby
causes the Series A Subordinated Debentures to be distributed to holders of the
Series A QUIPS in exchange therefor upon liquidation of the Series A Issuer, the
Corporation shall continue to have the right to shorten or extend the maturity
of the Series A Subordinated Debentures, subject to certain conditions as
described under "Certain Terms of Series A Subordinated Debentures -- General."
LIQUIDATION VALUE
The amount payable on the Series A QUIPS in the event of any liquidation of
the Series A Issuer is $25 per Series A QUIPS plus accumulated and unpaid
Distributions, which amount may be paid in the form of a distribution of a like
amount in Series A Subordinated Debentures, subject to certain exceptions. See
"Description of Preferred Securities -- Liquidation Distribution Upon
Termination" in the accompanying Prospectus.
REGISTRATION OF SERIES A QUIPS
The Series A QUIPS will be represented by global certificates registered in
the name of DTC or its nominee. Beneficial interests in the Series A QUIPS will
be shown on, and transfers thereof will be effected only through, records
maintained by participants in DTC. Except as described below and in the
accompanying Prospectus, Series A QUIPS in certificated form will not be issued
in exchange for the global certificates. See "Book-Entry Issuance" in the
accompanying Prospectus.
A global security shall be exchangeable for Series A QUIPS registered in
the names of persons other than DTC or its nominee only if (i) DTC notifies the
Series A Issuer that it is unwilling or unable to continue as a depositary for
such global security and no successor depositary shall have been appointed, or
if at any time DTC ceases to be a clearing agency registered under the Exchange
Act at a time when DTC is required to be so registered to act as such
depositary, (ii) the Issuer in its sole discretion determines that such global
security shall be so exchangeable or (iii) there shall have occurred and be
continuing an event of default under the Indenture with respect to the Series A
Subordinated Debentures. Any global security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for definitive certificates
registered in such names as DTC shall direct. It is expected that such
instructions will be based upon directions received by DTC from its Participants
(as defined in the accompanying Prospectus) with respect to ownership of
beneficial interests in such global security. In the event that Series A QUIPS
are issued in definitive form, such Series A QUIPS will be in denominations of
$25 and integral multiples thereof and may be transferred or exchanged at the
offices described below.
Payments on Series A QUIPS represented by a global security will be made to
DTC, as the depositary for the Series A QUIPS. In the event Series A QUIPS are
issued in certificated form, the Liquidation Amount and Distributions will be
payable, the transfer of the Series A QUIPS will be registrable, and Series A
QUIPS will be exchangeable for Series A QUIPS of other denominations of a like
aggregate Liquidation Amount, at the corporate office of the Property Trustee in
New York, New York, or at the offices of any paying agent or transfer agent
appointed by the Administrative Trustees, provided that payment of any
Distribution may be made at the option of the Administrative Trustees by check
mailed to the address of the persons entitled thereto or by wire transfer. In
addition, if the Series A QUIPS are issued in certificated form, the record
dates for payment of Distributions will be the 15th day of the month in which
the relevant Distribution payment is scheduled to be paid. For a description of
DTC and the terms of the depositary arrangements relating to payments,
transfers, voting rights, redemptions and other notices and other matters, see
"Book-Entry Issuance" in the accompanying Prospectus.
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CERTAIN TERMS OF SERIES A SUBORDINATED DEBENTURES
GENERAL
The following summary of certain terms and provisions of the Series A
Subordinated Debentures supplements the description of the terms and provisions
of the Corresponding Junior Subordinated Debentures (as defined in the
accompanying Prospectus) set forth in the accompanying Prospectus under the
heading "Description of Junior Subordinated Debentures" to which description
reference is hereby made. The summary of certain terms and provisions of the
Series A Subordinated Debentures set forth below, which describes the material
provisions thereof, does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the Indenture, to which reference is
hereby made. The form of Indenture has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and accompanying
Prospectus form a part.
Concurrently with the issuance of the Series A QUIPS, the Series A Issuer
will invest the proceeds thereof, together with the consideration paid by the
Corporation for the Series A Common Securities, in the Series A Subordinated
Debentures issued by the Corporation. The Series A Subordinated Debentures will
bear interest at the annual rate of % of the principal amount thereof, payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year (each, an "Interest Payment Date"), commencing March 31, 1997, to the
person in whose name each Series A Subordinated Debenture is registered, subject
to certain exceptions, at the close of business on the Business Day next
preceding such Interest Payment Date. It is anticipated that, until the
liquidation, if any, of the Series A Issuer, each Series A Subordinated
Debenture will be held in the name of the Property Trustee in trust for the
benefit of the holders of the Series A QUIPS. The amount of interest payable for
any period will be computed on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on the Series A
Subordinated Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the date such payment was
originally payable. Accrued interest that is not paid on the applicable Interest
Payment Date will bear additional interest on the amount thereof (to the extent
permitted by law) at the rate per annum of % thereof, compounded quarterly
from the relevant Interest Payment Date. The term "interest" as used herein
shall include quarterly interest payments, interest on quarterly interest
payments not paid on the applicable Interest Payment Date and Additional Sums
(as defined below), as applicable.
The Series A Subordinated Debentures will be issued as a series of junior
subordinated deferrable interest debentures under the Indenture.
The Series A Subordinated Debentures will mature on , 2026
(such date, as it may be shortened or extended as hereinafter described, the
"Stated Maturity"). Such date may be shortened at any time by the Corporation to
any date not earlier than , 2001, subject to the Corporation having
received prior approval of the Federal Reserve if then required under applicable
capital guidelines or policies. Such date may also be extended at any time at
the election of the Corporation to any date not later than , 2045,
provided that at the time such election is made and at the time of extension (i)
the Corporation is not in bankruptcy, otherwise insolvent or in liquidation,
(ii) the Corporation is not in default in the payment of any interest or
principal on the Series A Subordinated Debentures, (iii) if the Series A Issuer
has not been liquidated, the Series A Issuer is not in arrears on payments of
Distributions on the Series A QUIPS and no deferred Distributions are
accumulated and (iv) the Series A Subordinated Debentures are rated not less
than BBB- by Standard & Poor's Ratings Services or Baa3 by Moody's Investors
Service, Inc. or the equivalent by any other nationally recognized statistical
rating organization. In the event that the Corporation elects to shorten or
extend the maturity of the Series A Subordinated Debentures, it shall give
notice to the Debenture Trustee, and the Debenture Trustee shall give
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notice of such shortening or extension to the holders of the Series A
Subordinated Debentures no more than 30 and no less than 60 days prior to the
effectiveness thereof.
The Series A Subordinated Debentures will be unsecured and will rank junior
and be subordinate in right of payment to all Senior Debt of the Corporation.
See "Description of Junior Subordinated Debentures -- Subordination" in the
accompanying Prospectus. At September 30, 1996, the aggregate amount of Senior
Debt outstanding was approximately $17 billion. Because the Corporation is a
holding company, the right of the Corporation to participate in any distribution
of assets of any subsidiary, including the Bank, Chase USA and Texas Commerce,
upon such subsidiary's liquidation or reorganization or otherwise, is subject to
the prior claims of creditors of that subsidiary, except to the extent that the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Series A Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, and holders of Series A Subordinated Debentures should look only
to the assets of the Corporation for payments on the Series A Subordinated
Debentures. The Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Debt, whether
under the Indenture, any existing indenture or any other indenture that the
Corporation may enter into in the future or otherwise. See "Description of
Junior Subordinated Debentures -- Subordination" in the accompanying Prospectus.
OPTION TO DEFER INTEREST PAYMENTS
So long as no event of default under the Indenture has occurred and is
continuing, the Corporation has the right under the Indenture at any time or
from time to time during the term of the Series A Subordinated Debentures to
defer payment of interest on the Series A Subordinated Debentures for a period
not exceeding 20 consecutive quarters with respect to each Extension Period,
provided that no Extension Period may extend beyond the Stated Maturity of the
Series A Subordinated Debentures. At the end of such Extension Period, the
Corporation must pay all interest then accrued and unpaid on the Series A
Subordinated Debentures (together with interest on such unpaid interest at the
annual rate of %, compounded quarterly from the relevant Interest Payment
Date, to the extent permitted by applicable law). During an Extension Period,
interest will accrue and holders of Series A Subordinated Debentures (or holders
of Series A QUIPS while such series is outstanding) will be required to accrue
interest income for United States federal income tax purposes. See "Certain
Federal Income Tax Consequences -- Interest Income and Original Issue Discount."
During any such Extension Period, the Corporation may not, and may not
permit any subsidiary of the Corporation to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Corporation's capital stock, (ii) make any payment
of principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Corporation (including other series of Junior
Subordinated Debentures) that rank pari passu with or junior in interest to the
Series A Subordinated Debentures or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation if such guarantee ranks pari passu with or junior
in interest to the Series A Subordinated Debentures (other than (a) dividends or
distributions in capital stock of the Corporation, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under the Series A Guarantee, and (d) purchases of common stock related
to the issuance of common stock or rights under any of the Corporation's benefit
plans for its directors, officers or employees). Prior to the termination of any
such Extension Period, the Corporation may further defer the payment of interest
on the Series A Subordinated Debentures, provided that no Extension Period may
exceed 20 consecutive quarters or extend beyond the Stated Maturity of the
Series A Subordinated Debentures. Upon the termination of any such Extension
Period and the payment of all interest then accrued and unpaid (together with
interest thereon at the rate of %, com-
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pounded quarterly, to the extent permitted by applicable law), the Corporation
may elect to begin a new Extension Period subject to the above requirements. No
interest shall be due and payable during an Extension Period, except at the end
thereof. The Corporation must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election to begin such
Extension Period at least one Business Day prior to the earlier of (i) the date
interest on the Series A Subordinated Debentures would have been payable except
for the election to begin such Extension Period, (ii) the date the
Administrative Trustees are required to give notice to the New York Stock
Exchange, the Nasdaq National Market or other applicable stock exchange or
automated quotation system on which the Series A QUIPS are then listed or quoted
or to holders of Series A Subordinated Debentures of the record date or (iii)
the date such Distributions are payable, but in any event not less than one
Business Day prior to such record date. The Debenture Trustee shall give notice
of the Corporation's election to begin a new Extension Period to the holders of
the Series A Subordinated Debentures. There is no limitation on the number of
times that the Corporation may elect to begin an Extension Period. See
"Description of Junior Subordinated Debentures -- Option to Defer Interest
Payments" in the accompanying Prospectus.
ADDITIONAL SUMS
If the Series A Issuer is required to pay any additional taxes, duties or
other governmental charges as a result of a Tax Event, the Corporation will pay
as additional amounts on the Series A Subordinated Debentures such amounts as
shall be required so that the Distributions payable by the Series A Issuer shall
not be reduced as a result of any such additional taxes, duties or other
governmental charges.
REDEMPTION
Subject to the Corporation having received prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies, the
Series A Subordinated Debentures are redeemable prior to maturity at the option
of the Corporation (i) on or after , 2001, in whole at any time or
in part from time to time or (ii) at any time in whole (but not in part) prior
to , 2006 and within 90 days following the occurrence and
continuation of a Tax Event or Capital Treatment Event, in either case at a
redemption price equal to the accrued and unpaid interest on the Series A
Subordinated Debentures so redeemed to the date fixed for redemption, plus 100%
of the principal amount thereof. See "Description of Junior Subordinated
Debentures -- Redemption" in the accompanying Prospectus.
DISTRIBUTION OF SERIES A SUBORDINATED DEBENTURES
As described under "Certain Terms of Series A QUIPS -- Liquidation of
Series A Issuer and Distribution of Series A Subordinated Debentures to
Holders," under certain circumstances involving the termination of the Series A
Issuer, Series A Subordinated Debentures may be distributed to the holders of
the Series A QUIPS in exchange therefor upon liquidation of the Series A Issuer
after satisfaction of liabilities to creditors of the Series A Issuer as
provided by applicable law. If distributed to holders of Series A QUIPS, the
Series A Subordinated Debentures will initially be issued in the form of one or
more global securities and DTC, or any successor depositary for the Series A
QUIPS, will act as depositary for the Series A Subordinated Debentures. It is
anticipated that the depositary arrangements for the Series A Subordinated
Debentures would be substantially identical to those in effect for the Series A
QUIPS. If Series A Subordinated Debentures are distributed to the holders of
Series A QUIPS in exchange therefor upon the liquidation of the Series A Issuer,
the Corporation will use its best efforts to list the Series A Subordinated
Debentures on the New York Stock Exchange or such other stock exchanges or
automated quotation system, if any, on which the Series A QUIPS are then listed
or quoted. There can be no assurance as to the market price of any Series A
Subordinated Debentures that may be distributed to the holders of Series A
QUIPS.
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<PAGE> 24
REGISTRATION OF SERIES A SUBORDINATED DEBENTURES
The Series A Subordinated Debentures will be represented by global
certificates registered in the name of DTC or its nominee. Beneficial interests
in the Series A Subordinated Debentures will be shown on, and transfers thereof
will be effected only through, records maintained by participants in DTC. Except
as described below and in the accompanying Prospectus, Series A Subordinated
Debentures in certificated form will not be issued in exchange for the global
certificates. See "Book-Entry Issuance" in the accompanying Prospectus.
A global security shall be exchangeable for Series A Subordinated
Debentures registered in the names of persons other than DTC or its nominee only
if (i) DTC notifies the Corporation that it is unwilling or unable to continue
as a depositary for such global security and no successor depositary shall have
been appointed, or if at any time DTC ceases to be a clearing agency registered
under the Exchange Act at a time when DTC is required to be so registered to act
as such depositary, (ii) the Corporation in its sole discretion determines that
such global security shall be so exchangeable or (iii) there shall have occurred
and be continuing an event of default under the Indenture with respect to the
Series A Subordinated Debenture. Any global security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for definitive
certificates registered in such names as DTC shall direct. It is expected that
such instructions will be based upon directions received by DTC from its
Participants (as defined in the accompanying Prospectus) with respect to
ownership of beneficial interests in such global security. In the event that
Series A Subordinated Debentures are issued in definitive form, such Series A
Subordinated Debentures will be in denominations of $25 and integral multiples
thereof and may be transferred or exchanged at the offices described below.
Payments on Series A Subordinated Debentures represented by a global
security will be made to DTC, as the depositary for the Series A Subordinated
Debentures. In the event Series A Subordinated Debentures are issued in
certificated form, principal and interest will be payable, the transfer of the
Series A Subordinated Debentures will be registrable, and Series A Subordinated
Debentures will be exchangeable for Series A Subordinated Debentures of other
denominations of a like aggregate principal amount, at the corporate office of
the Debenture Trustee in New York, New York, or at the offices of any paying
agent or transfer agent appointed by the Corporation, provided that payment of
interest may be made at the option of the Corporation by check mailed to the
address of the persons entitled thereto or by wire transfer. In addition, if the
Series A Subordinated Debentures are issued in certificated form, the record
dates for payment of interest will be the 15th day of the last month of each
calendar quarter. For a description of DTC and the terms of the depositary
arrangements relating to payments, transfers, voting rights, redemptions and
other notices and other matters, see "Book-Entry Issuance" in the accompanying
Prospectus.
CERTAIN TERMS OF SERIES A GUARANTEE
The Series A Guarantee guarantees to the holders of the Series A Securities
the following payments, to the extent not paid by the Series A Issuer: (i) any
accumulated and unpaid Distributions required to be paid on the Series A
Securities, to the extent that the Series A Issuer has funds on hand available
therefor at such time, (ii) the redemption price with respect to any Series A
Securities called for redemption, to the extent that the Series A Issuer has
funds on hand available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding-up or liquidation of the Series A Issuer
(unless the Series A Subordinated Debentures are distributed to holders of the
Series A Securities), the lesser of (a) the aggregate of the Liquidation Amount
and all accumulated and unpaid Distributions to the date of payment, to the
extent that the Series A Issuer has funds on hand available therefor at such
time, and (b) the amount of assets of the Series A Issuer remaining available
for distribution to holders of the Series A Securities after payment of
creditors of the Series A Issuer as required by applicable law. The Series A
Guarantee will be qualified as an indenture under the Trust Indenture Act. The
Bank of New York will act as the Guarantee Trustee for the purposes of
compliance with the Trust Indenture Act and will hold the
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<PAGE> 25
Series A Guarantee for the benefit of the holders of the Series A Securities.
The Bank of New York will also act as Debenture Trustee for the Series A
Subordinated Debentures and as Property Trustee.
The holders of not less than a majority in aggregate liquidation amount of
the Series A Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Series A Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee under the Series A Guarantee. Any holder of
the Series A Securities may institute a legal proceeding directly against the
Corporation to enforce its rights under the Series A Guarantee without first
instituting a legal proceeding against the Series A Issuer, the Guarantee
Trustee or any other person or entity. If the Corporation were to default on its
obligation to pay amounts payable under the Series A Subordinated Debentures,
the Series A Issuer would lack funds for the payment of Distributions or amounts
payable on redemption of the Series A Securities or otherwise, and, in such
event, holders of the Series A Securities would not be able to rely upon the
Series A Guarantee for payment of such amounts. Instead, if an event of default
under the Indenture shall have occurred and be continuing and such event is
attributable to the failure of the Corporation to pay interest on or principal
of the Series A Subordinated Debentures on the applicable payment date, then a
holder of Series A Securities may institute a Direct Action against the
Corporation pursuant to the terms of the Indenture for enforcement of payment to
such holder of the principal of or interest on such Series A Subordinated
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Series A Securities of such holder. In connection with such Direct
Action, the Corporation will have a right of set-off under the Indenture to the
extent of any payment made by the Corporation to such holder of Series A
Securities in the Direct Action. Except as described herein, holders of Series A
Securities will not be able to exercise directly any other remedy available to
the holders of the Series A Subordinated Debentures or assert directly any other
rights in respect of the Series A Subordinated Debentures. See "Description of
Guarantees" in the accompanying Prospectus. The Trust Agreement provides that
each holder of Series A Securities by acceptance thereof agrees to the
provisions of the Series A Guarantee and the Indenture.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
In the opinion of Simpson Thacher & Bartlett, special tax counsel to the
Corporation and the Series A Issuer ("Tax Counsel"), the following summary
accurately describes the material United States federal income tax consequences
that may be relevant to the purchase, ownership and disposition of Series A
QUIPS. Unless otherwise stated, this summary deals only with Series A QUIPS held
as capital assets by United States Persons (defined below) who purchase the
Series A QUIPS upon original issuance. As used herein, a "United States Person"
means a person that is (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, (iii) an estate
the income of which is subject to United States federal income taxation
regardless of its source, or (iv) a trust the income of which is subject to
United States Federal income taxation regardless of its source; provided,
however, that for taxable years beginning after December 31, 1996 (or, if a
trustee so elects, for taxable years ending after August 20, 1996), a "United
States Person" shall include any trust if a court is able to exercise primary
supervision over the administration of such trust and one or more United States
fiduciaries have the authority to control all substantial decisions of such
trust. The tax treatment of a holder may vary depending on his, her or its
particular situation. This summary does not address all the tax consequences
that may be relevant to a particular holder or to holders who may be subject to
special tax treatment, such as banks, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or currencies,
tax-exempt investors, or foreign investors. In addition, this summary does not
include any description of any alternative minimum tax consequences or the tax
laws of any state, local or foreign government that may be applicable to a
holder of Series A QUIPS. This summary is based on the Internal Revenue Code of
1986, as amended (the "Code"), the Treasury regulations promulgated thereunder
and administrative and judicial interpretations thereof, as of the date hereof,
all of which are subject to change, possibly on a retroactive basis.
The following discussion does not discuss the tax consequences that might
be relevant to persons that are not United States Persons ("non-United States
Persons"). Non-United States Persons should consult their own tax advisors as to
the specific United States federal income tax consequences of the purchase,
ownership and disposition of Series A QUIPS.
The authorities on which this summary is based are subject to various
interpretations and the opinions of Tax Counsel are not binding on the Internal
Revenue Service ("IRS") or the courts, either of which could take a contrary
position. Moreover, no rulings have been or will be sought from the IRS with
respect to the transactions described herein. Accordingly, there can be no
assurance that the IRS will not challenge the opinions expressed herein or that
a court would not sustain such a challenge. Nevertheless, Tax Counsel has
advised that it is of the view that, if challenged, the opinions expressed
herein would be sustained by a court with jurisdiction in a properly presently
case.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE SERIES A
QUIPS, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND OTHER TAX
LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX
LAWS. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION OF THE SERIES A QUIPS UPON THE
OCCURRENCE OF CERTAIN TAX EVENTS SEE "CERTAIN TERMS OF SERIES A
QUIPS -- LIQUIDATION OF SERIES A ISSUER AND DISTRIBUTION OF SERIES A
SUBORDINATED DEBENTURES TO HOLDERS."
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CLASSIFICATION OF THE SERIES A ISSUER
In connection with the issuance of the Series A QUIPS, Tax Counsel is of
the opinion that, under current law and assuming compliance with the terms of
the Trust Agreement, and based on certain facts and assumptions contained in
such opinion, the Series A Issuer will be classified as a grantor trust and not
as an association taxable as a corporation for United States federal income tax
purposes. As a result, each beneficial owner of Series A QUIPS (a
"Securityholder") will be treated as owning an undivided beneficial interest in
the Series A Subordinated Debentures. Accordingly, each Securityholder will be
required to include in its gross income its pro rata share of the interest
income or original issue discount that is paid or accrued on the Series A
Subordinated Debentures. See "-- Interest Income and Original Issue Discount."
CLASSIFICATION OF THE SERIES A SUBORDINATED DEBENTURES
The Corporation, the Series A Issuer and the holders of the Series A
Securities (by acceptance of a beneficial interest in a Series A Security) will
agree to treat the Series A Subordinated Debentures as indebtedness for all
United States tax purposes. In connection with the issuance of the Series A
Subordinated Debentures, Tax Counsel is of the opinion that, under current law,
and based on certain representations, facts and assumptions set forth in such
opinion, the Series A Subordinated Debentures will be classified as indebtedness
for United States federal income tax purposes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Except as set forth below, stated interest on the Series A Subordinated
Debentures generally will be included in income by a Securityholder at the time
such interest income is paid or accrued in accordance with such Securityholder's
regular method of tax accounting.
The Company believes that, under the applicable Treasury regulations, the
Series A Subordinated Debentures will not be considered to have been issued with
"original issue discount" ("OID") within the meaning of Section 1273(a) of the
Code. If, however, the Corporation exercises its right to defer payments of
interest on the Series A Subordinated Debentures, the Series A Subordinated
Debentures will become OID instruments at such time and all Securityholders will
be required to accrue the stated interest on the Series A Subordinated
Debentures on a daily basis during the Extension Period, even though the Company
will not pay such interest until the end of the Extension Period, and even
though some Securityholders may use the cash method of tax accounting. Moreover,
thereafter the Series A Subordinated Debentures will be taxed as OID instruments
for as long as they remain outstanding. Thus, even after the end of the
Extension Period, all Securityholders would be required to continue to include
the stated interest on the Series A Subordinated Debentures in income on a daily
economic accrual basis, regardless of their method of tax accounting and in
advance of receipt of the cash attributable to such interest income. Under the
OID economic accrual rules, a Securityholder would accrue an amount of interest
income each year that approximates the stated interest payments called for under
the terms of the Series A Subordinated Debentures, and actual cash payments of
interest on the Series A Subordinated Debentures would not be reported
separately as taxable income. Any amount of OID included in a Securityholder's
gross income (whether or not during an Extension Period) will increase such
Securityholder's tax basis in its Series A QUIPS, and the amount of
Distributions received by a Securityholder with respect to such Series A QUIPS
will reduce the tax basis of such Series A QUIPS.
The Treasury regulations described above have not yet been addressed in any
rulings or other interpretations by the IRS, and it is possible that the IRS
could take a contrary position. If the IRS were to assert successfully that the
stated interest on the Series A Subordinated Debentures was OID regardless of
whether the Corporation exercises its right to defer payments of interest on
such
S-26
<PAGE> 28
debentures, all Securityholders would be required to include such stated
interest in income on a daily economic accrual basis as described above.
Corporate Securityholders will not be entitled to a dividends-received
deduction with respect to any income recognized with respect to the Series A
QUIPS.
DISTRIBUTION OF SERIES A SUBORDINATED DEBENTURES TO HOLDERS OF SERIES A QUIPS
Under current law, a distribution by the Series A Issuer of the Series A
Subordinated Debentures as described under the caption "Certain Terms of Series
A QUIPS -- Liquidation of Series A Issuer and Distribution of Series A
Subordinated Debentures to Holders" will be non-taxable and will result in the
Securityholder receiving directly its pro rata share of the Series A
Subordinated Debentures previously held indirectly through the Series A Issuer,
with a holding period and aggregate tax basis equal to the holding period and
aggregate tax basis such Securityholder had in its Series A QUIPS before such
distribution. If, however, the liquidation of the Series A Issuer were to occur
because the Series A Issuer is subject to United States federal income tax with
respect to income accrued or received on the Series A Subordinated Debentures,
the distribution of Series A Subordinated Debentures to Securityholders by the
Series A Issuer would be a taxable event to the Series A Issuer and each
Securityholder, and a Securityholder would recognize gain or loss as if the
Securityholder had exchanged its Series A QUIPS for the Series A Subordinated
Debentures it received upon the liquidation of the Series A Issuer. A
Securityholder will accrue interest in respect of Series A Subordinated
Debentures received from the Series A Issuer in the manner described above under
"-- Interest Income and Original Issue Discount."
SALES OR REDEMPTION OF SERIES A QUIPS
Gain or loss will be recognized by a Securityholder on a sale of Series A
QUIPS (including a redemption for cash) in an amount equal to the difference
between the amount realized by the Securityholder on the sale or redemption of
the Series A QUIPS (except to the extent that such amount realized is
characterized as a payment in respect of accrued but unpaid interest on such
Securityholder's allocable share of the Series A Subordinated Debentures) and
the Securityholder's adjusted tax basis in the Series A QUIPS sold or redeemed.
Such gain or loss generally will be taxable as long-term capital gain or loss if
the Securityholder held the Series A QUIPS that it sold or redeemed for more
than one year. Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of OID accrued on the Series A QUIPS held of record by United
States Persons (other than corporations and other exempt Securityholders), if
any, will be reported to the Internal Revenue Service. "Backup" withholding at a
rate of 31% will apply to payments of interest to non-exempt United States
Persons unless the Securityholder furnishes its taxpayer identification number
in the manner prescribed in applicable Treasury Regulations, certifies that such
number is correct, certifies as to no loss of exemption from backup withholding
and meets certain other conditions.
Payment of the proceeds from the disposition of Series A QUIPS to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner establishes an
exemption from information reporting and backup withholding.
Any amounts withheld from a Securityholder under the backup withholding
rules will be allowed as a refund or a credit against such Securityholder's
United States federal income tax liability, provided the required information is
furnished to the Internal Revenue Service.
S-27
<PAGE> 29
It is anticipated that income on the Series A QUIPS will be reported to
holders on Form 1099 and mailed to holders of the Series A QUIPS by January 31
following each calendar year.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"),
the revenue portion of President Clinton's budget proposal, was released. The
Bill would, among other things, generally deny interest deductions for interest
on an instrument issued by a corporation that has a maximum weighted average
maturity of more than 40 years. The Bill would also generally deny interest
deductions for interest on an instrument issued by a corporation that has a
maximum term of more than 20 years and that is not shown as indebtedness on the
separate balance sheet of the issuer or, where the instrument is issued to a
related party (other than a corporation), where the holder or some other related
party issues a related instrument that is not shown as indebtedness on the
issuer's consolidated balance sheet. For purposes of determining the weighted
average maturity or the term of an instrument, any right to extend would be
treated as exercised. The above-described provisions of the Bill were proposed
to be effective generally for instruments issued on or after December 7, 1995.
If either provision were to apply to the Series A Subordinated Debentures, the
Corporation would not be able to deduct interest on the Series A Subordinated
Debentures. However, on March 29, 1996, the Chairmen of the Senate Finance and
House Ways and Means Committees issued a joint statement (the "Joint Statement")
to the effect that it was their intention that the effective date of the
President's legislative proposals, if adopted, would be no earlier than the date
of appropriate Congressional action. In addition, subsequent to the publication
of the Joint Statement, Senator Daniel Patrick Moynihan and Representatives Sam
M. Gibbons and Charles B. Rangel wrote letters to Treasury Department officials
concurring with the view expressed in the Joint Statement (the "Democrat
Letters"). If the principles contained in the Joint Statement and the Democrat
Letters were followed and the Bill was enacted, such legislation would not apply
to the Series A Subordinated Debentures. There can be no assurance, however,
that current or future legislative proposals or final legislation will not
adversely affect the ability of the Corporation to deduct interest on the Series
A Subordinated Debentures or otherwise affect the tax treatment of the
transaction described herein. Moreover, such a change could give rise to a Tax
Event, which would permit the Corporation, upon approval of the Federal Reserve
if then required under applicable capital guidelines or policies of the Federal
Reserve, to cause a redemption of the Series A QUIPS, as described more fully in
the accompanying Prospectus under "Description of Preferred
Securities -- Redemption or Exchange -- Tax Event or Capital Event Redemption."
S-28
<PAGE> 30
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Corporation and the Series A Issuer have agreed that the Series A
Issuer will sell to each of the Underwriters named below, and each of such
Underwriters, for whom Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated are acting as representatives, has severally agreed to
purchase from the Series A Issuer, the respective number of Series A QUIPS set
forth opposite its name below. In the Underwriting Agreement, the several
Underwriters have agreed, subject to the terms and conditions set forth therein,
to purchase all the Series A QUIPS offered hereby if any of the Series A QUIPS
are purchased. In the event of default by an Underwriter, the Underwriting
Agreement provides that, in certain circumstances, the purchase commitments of
the nondefaulting Underwriters may be increased or the Underwriting Agreement
may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
SERIES A
UNDERWRITER QUIPS
--------------------------------------------------------------- ---------
<S> <C>
Goldman, Sachs & Co. ..........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................
---------
Total................................................
=========
</TABLE>
The Underwriters propose initially to offer the Series A QUIPS to the
public at the public offering price set forth on the cover page of this
Prospectus Supplement and to certain dealers at such price less a concession not
in excess of $. per Series A QUIPS. The Underwriters may allow, and such
dealers may reallow, a discount not in excess of $. per Series A QUIPS to
certain other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.
In view of the fact that the proceeds from the sale of the Series A QUIPS
will be used to purchase the Series A Subordinated Debentures issued by the
Corporation, the Underwriting Agreement provides that the Corporation will pay
as Underwriters' compensation for the Underwriters' arranging the investment
therein of such proceeds an amount of $. per Series A QUIPS for the accounts
of the several Underwriters.
The Corporation and the Series A Issuer have agreed that, during the period
beginning from the date of the Underwriting Agreement and continuing to and
including the earlier of (i) the termination of trading restrictions on the
Series A QUIPS, as determined by the Underwriters, and (ii) days after the
closing date, they will not offer, sell, contract to sell or otherwise dispose
of any Preferred Securities, any other beneficial interests in the assets of the
Series A Issuer, or any preferred securities or any other securities of the
Series A Issuer or the Corporation which are substantially similar to the Series
A QUIPS, including any guarantee of such securities, or any securities
convertible into or exchangeable for or representing the right to receive
preferred securities or any such substantially similar securities of either the
Series A Issuer or the Corporation, without the prior written consent of the
Underwriters, except for the Series A QUIPS offered in connection with this
offering.
Prior to this offering, there has been no public market for the Series A
QUIPS. Application will be made to list the Series A QUIPS on the New York Stock
Exchange. Trading of the Series A QUIPS on the New York Stock Exchange is
expected to commence within a 30-day period after the initial delivery of the
Series A QUIPS. The Underwriters have advised the Corporation that they intend
to make a market in the Series A QUIPS prior to commencement of trading on the
New York Stock Exchange, but are not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Series A QUIPS.
In order to meet one of the requirements for listing the Series A QUIPS on
the New York Stock Exchange, the Underwriters will undertake to sell lots of 100
or more Series A QUIPS to a minimum of 400 beneficial holders.
S-29
<PAGE> 31
The Corporation and the Series A Issuer have agreed to indemnify the
several Underwriters against, or contribute to payments that the Underwriters
may be required to make in respect of, certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
Chase Securities Inc., a wholly owned subsidiary of the Corporation, may be
included as an Underwriter of the Series A QUIPS. The underwriting arrangements
for this offering comply with the requirements of Rule 2720 of The Conduct Rules
of the National Association of Securities Dealers, Inc. ("NASD") regarding a
NASD member firm's underwriting securities of an affiliate.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment or commercial banking
services to the Corporation and its affiliates, for which such Underwriters or
their affiliates have received or will receive customary fees and commissions.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Series A
QUIPS, the enforceability of the Trust Agreement and the formation of the Series
A Issuer will be passed upon by Richards, Layton & Finger, special Delaware
counsel to the Corporation and the Series A Issuer. The validity of the Series A
Guarantee and the Series A Subordinated Debentures will be passed upon for the
Corporation by Simpson Thacher & Bartlett (a partnership which includes
professional corporations) and for the Underwriters by Sullivan & Cromwell.
Simpson Thacher & Bartlett and Sullivan & Cromwell will rely on the opinion of
Richards, Layton & Finger as to matters of Delaware law. Sullivan & Cromwell
from time to time performs legal services for the Corporation. Certain matters
relating to United States federal income tax considerations described in this
Prospectus Supplement will be passed upon for the Corporation by Simpson Thacher
& Bartlett.
S-30
<PAGE> 32
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 25, 1996
$500,000,000
THE CHASE MANHATTAN CORPORATION
JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES
CHASE CAPITAL I
CHASE CAPITAL II
CHASE CAPITAL III
PREFERRED SECURITIES FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED HEREIN, BY
THE CHASE MANHATTAN CORPORATION
The Chase Manhattan Corporation, a Delaware corporation (the
"Corporation"), may from time to time offer in one or more series or issuances
its junior subordinated deferrable interest debentures (the "Junior Subordinated
Debentures"). The Junior Subordinated Debentures will be unsecured and
subordinate and junior in right of payment to Senior Debt (as defined in
"Description of Junior Subordinated Debentures -- Subordination") of the
Corporation. If provided in an accompanying Prospectus Supplement, the
Corporation will have the right to defer payments of interest on any series of
Junior Subordinated Debentures by extending the interest payment period thereon
at any time or from time to time for up to such number of consecutive interest
payment periods (which shall not extend beyond the Stated Maturity (as defined
herein) of the Junior Subordinated Debentures) with respect to each deferral
period as may be specified in such Prospectus Supplement (each, an "Extension
Period"). In such circumstance, however, the Corporation would not be permitted,
subject to certain exceptions set forth herein, to declare or pay any dividends,
distributions or other payments with respect to, or repay, repurchase, redeem or
otherwise acquire, the Corporation's capital stock or debt securities that rank
pari passu with or junior to such series of Junior Subordinated Debentures. See
"Description of Junior Subordinated Debentures -- Option to Defer Interest
Payments" and "-- Restrictions on Certain Payments."
Chase Capital I, Chase Capital II and Chase Capital III, each a trust
created under the laws of the State of Delaware (each, an "Issuer," and
collectively, the "Issuers"), may severally offer, from time to time, preferred
securities (the "Preferred Securities") representing beneficial ownership
interests in such Issuer. The Corporation will be the owner of the common
securities (the "Common Securities" and, together with the Preferred Securities,
the "Trust Securities") representing common beneficial ownership interests in
such Issuer. Holders of the Preferred Securities will be entitled to receive
preferential cumulative cash distributions ("Distributions") accumulating from
the date of original issuance and payable periodically as specified in an
accompanying Prospectus Supplement.
Concurrently with the issuance by an Issuer of its Preferred Securities,
such Issuer will invest the proceeds thereof and of contributions received in
respect of the Common Securities in a corresponding series of the Corporation's
Junior Subordinated Debentures (the "Corresponding Junior Subordinated
Debentures") with terms corresponding to the terms of that Issuer's Preferred
Securities (the "Related Preferred Securities"). Accordingly, if, as provided in
an accompanying Prospectus Supplement, the
(continued on next page)
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY.
---------------------
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.
---------------------
The date of this Prospectus is , 1996.
<PAGE> 33
(cover page continued)
Corporation has the right to defer the payment of interest on a series of
Corresponding Junior Subordinated Debentures, then, if interest payments are so
deferred, Distributions on the Related Preferred Securities would also be
deferred, but would continue to accumulate at the rate per annum set forth in
the related Prospectus Supplement. See "Description of Preferred Securities --
Distributions."
Taken together, the Corporation's obligations under each series of
Corresponding Junior Subordinated Debentures, the Indenture and the related
Trust Agreement and the related Guarantee (each, as defined herein), in the
aggregate, provide a full, irrevocable and unconditional guarantee of payments
of Distributions and other amounts due on the Related Preferred Securities. See
"Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures and the Guarantees -- Full and Unconditional Guarantee".
The payment of Distributions with respect to the Preferred Securities of each
Issuer and payments on liquidation of such Issuer or redemption of such
Preferred Securities, in each case out of funds held by such Issuer, are each
irrevocably guaranteed by the Corporation to the extent described herein (each,
a "Guarantee"). See "Description of Guarantees." The obligations of the
Corporation under each Guarantee will be unsecured and subordinate and junior in
right of payment to all Senior Debt of the Corporation.
The Corresponding Junior Subordinated Debentures will be the sole assets of
each Issuer, and payments under the Corresponding Junior Subordinated Debentures
and the related Expense Agreement will be the only revenue of each Issuer. If so
provided in an accompanying Prospectus Supplement, the Corporation may, upon
receipt of approval of the Federal Reserve (if such approval is then required
under the applicable capital guidelines or policies), redeem the Corresponding
Junior Subordinated Debentures (and thereby cause the redemption of the Trust
Securities) or may terminate each Issuer and, after satisfaction of liabilities
to the creditors of such Issuer as required by applicable law, cause the
Corresponding Junior Subordinated Debentures to be distributed to the holders of
Preferred Securities in exchange therefor upon liquidation of their interests in
such Issuer. See "Description of Preferred Securities -- Liquidation
Distribution Upon Termination."
The Junior Subordinated Debentures and Preferred Securities may be offered
in amounts, at prices and on terms to be determined at the time of offering;
provided, however, the aggregate initial public offering price of all Junior
Subordinated Debentures (other than Corresponding Junior Subordinated
Debentures) and Preferred Securities (including the Corresponding Junior
Subordinated Debentures) issued pursuant to the Registration Statement of which
this Prospectus forms a part shall not exceed $500,000,000. Certain specific
terms of the Junior Subordinated Debentures or Preferred Securities in respect
of which this Prospectus is being delivered will be described in an accompanying
Prospectus Supplement, including without limitation and where applicable and to
the extent not set forth herein, (a) in the case of Junior Subordinated
Debentures, the specific designation, aggregate principal amount, denominations,
Stated Maturity (including any provisions for the shortening or extension
thereof), interest payment dates, interest rate (which may be fixed or variable)
or method of calculating interest, if any, applicable Extension Period or
interest deferral terms, if any, place or places where principal, premium, if
any, and interest, if any, will be payable, any terms of redemption, any sinking
fund provisions, terms for any conversion or exchange into other securities,
initial offering or purchase price, methods of distribution and any other
special terms, and (b) in the case of Preferred Securities, the identity of the
Issuer, specific title, aggregate stated liquidation amount, number of
securities, Distribution rate or method of calculating such rate, Distribution
payment dates, applicable Distribution deferral terms, if any, place or places
where Distributions will be payable, any terms of redemption, exchange, initial
offering or purchase price, methods of distribution and any other special terms.
2
<PAGE> 34
The Prospectus Supplement also will contain information, as applicable,
about certain United States federal income tax consequences relating to the
Junior Subordinated Debentures or Preferred Securities.
The Junior Subordinated Debentures and Preferred Securities may be sold to
or through underwriters, through dealers, remarketing firms or agents or
directly to purchasers. See "Plan of Distribution." The names of any
underwriters, dealers, remarketing firms or agents involved in the sale of
Junior Subordinated Debentures or Preferred Securities in respect of which this
Prospectus is being delivered and any applicable fee, commission or discount
arrangements with them will be set forth in a Prospectus Supplement. The
Prospectus Supplement will state whether the Junior Subordinated Debentures or
Preferred Securities will be listed on any national securities exchange or
automated quotation system. If the Junior Subordinated Debentures or Preferred
Securities are not listed on any national securities exchange or automated
quotation system, there can be no assurance that there will be a secondary
market for the Junior Subordinated Debentures or Preferred Securities.
This Prospectus may not be used to consummate sales of Junior Subordinated
Debentures or Preferred Securities unless accompanied by a Prospectus
Supplement.
AVAILABLE INFORMATION
The Corporation 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 with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New York,
New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material can also be obtained at
prescribed rates by writing to the Public Reference Section of the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. Such material
may also be accessed electronically by means of the Commission's home page on
the Internet at http://www.sec.gov. In addition, such reports, proxy statements
and other information concerning the Corporation can be inspected at the offices
of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Corporation and the Issuers have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted as permitted
by the rules and regulations of the Commission. For further information with
respect to the Corporation and the securities offered hereby, reference is made
to the Registration Statement and the exhibits and the financial statements,
notes and schedules filed as a part thereof or incorporated by reference
therein, which may be inspected at the public reference facilities of the
Commission at the addresses set forth above or through the Commission's home
page on the Internet. Statements made in this Prospectus concerning the contents
of any documents referred to herein are not necessarily complete, and in each
instance are qualified in all respects by reference to the copy of such document
filed as an exhibit to the Registration Statement.
No separate financial statements of any Issuer have been included herein.
The Corporation and the Issuers do not consider that such financial statements
would be material to holders of the Preferred Securities because each Issuer is
a newly formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than holding as trust assets the Corresponding Junior Subordinated
Debentures of the
3
<PAGE> 35
Corporation and issuing the Trust Securities. See "The Issuers," "Description of
Preferred Securities," "Description of Junior Subordinated
Debentures -- Corresponding Junior Subordinated Debentures" and "Description of
Guarantees." In addition, the Corporation does not expect that any of the
Issuers will be filing reports under the Exchange Act with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the Commission are
incorporated into this Prospectus by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1995.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996.
3. Current Reports on Form 8-K dated January 12, 1996, January 18, 1996,
January 19, 1996, February 5, 1996, March 25, 1996, March 31, 1996,
April 16, 1996, July 17, 1996, September 30, 1996, October 7, 1996 and
October 15, 1996.
Each document or report filed by the Corporation pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part of
this Prospectus from the date of filing of such document. Any statement
contained herein, or in a document all or a portion of which is incorporated or
deemed to be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
The Corporation will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein (other
than exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to: The Chase
Manhattan Corporation, 270 Park Avenue, New York, New York 10017, Attention:
Office of the Secretary, telephone number (212) 270-4040.
4
<PAGE> 36
THE CHASE MANHATTAN CORPORATION
The Corporation is a bank holding company organized under the laws of
Delaware in 1968 and registered under the Bank Holding Company Act of 1956, as
amended. On March 31, 1996, The Chase Manhattan Corporation ("Old Chase") merged
with and into Chemical Banking Corporation, and Chemical Banking Corporation
changed its name to "The Chase Manhattan Corporation."
The Corporation is a Delaware corporation with its principal office at 270
Park Avenue, New York, New York 10017. Its telephone number is (212) 270-6000.
THE ISSUERS
Each Issuer is a statutory business trust created under Delaware law
pursuant to (i) a trust agreement executed by the Corporation, as Depositor of
the Issuer, and the Delaware Trustee and two Administrative Trustees (as defined
herein) of such Issuer and (ii) the filing of a certificate of trust and a
restated certificate of trust with the Delaware Secretary of State. Each trust
agreement will be amended and restated in its entirety (each, as so amended and
restated, a "Trust Agreement") substantially in the form filed as an exhibit to
the Registration Statement of which this Prospectus forms a part. Each Trust
Agreement will be qualified as an indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). Each Issuer exists for the
exclusive purposes of (i) issuing and selling its Trust Securities, (ii) using
the proceeds from the sale of such Trust Securities to acquire a series of
Corresponding Junior Subordinated Debentures issued by the Corporation, and
(iii) engaging in only those other activities necessary or incidental thereto
(such as registering the transfer of Trust Securities). Accordingly, the
Corresponding Junior Subordinated Debentures will be the sole assets of each
Issuer, and payments under the Corresponding Junior Subordinated Debentures will
be the sole revenue of each Issuer.
All of the Common Securities of each Issuer will be owned by the
Corporation. The Common Securities of an Issuer will rank pari passu, and
payments will be made thereon pro rata, with the Preferred Securities of such
Issuer, except that upon the occurrence and continuance of an event of default
under a Trust Agreement resulting from an event of default under the Indenture,
the rights of the Corporation as holder of the Common Securities to payment in
respect of Distributions and payments upon liquidation or redemption will be
subordinated to the rights of the holders of the Preferred Securities of such
Issuer. See "Description of Preferred Securities -- Subordination of Common
Securities." The Corporation will acquire Common Securities in an aggregate
Liquidation Amount equal to not less than 3% of the total capital of each
Issuer.
Unless otherwise specified in the applicable Prospectus Supplement, each
Issuer has a term of approximately 55 years, but may terminate earlier as
provided in the applicable Trust Agreement. Each Issuer's business and affairs
are conducted by its trustees, each appointed by the
Corporation as holder of the Common Securities. The trustees for each Issuer
will be The Bank of New York, as the Property Trustee (the "Property Trustee"),
The Bank of New York (Delaware), as the Delaware Trustee (the "Delaware
Trustee"), and two individual trustees (the "Administrative Trustees") who are
employees or officers of or affiliated with the Corporation (collectively, the
"Issuer Trustees"). The Bank of New York, as Property Trustee, will act as sole
trustee under each Trust Agreement for purposes of compliance with the Trust
Indenture Act. The Bank of New York will also act as trustee under the
Guarantees and the Indenture. See "Description of Guarantees" and "Description
of Junior Subordinated Debentures." The holder of the Common Securities of an
Issuer, or the holders of a majority in Liquidation Amount of the Related
Preferred Securities if an event of default under the Trust Agreement for such
Issuer has occurred and is continuing, will be entitled to appoint, remove or
replace the Property Trustee and/or the Delaware Trustee for such Issuer. In no
event will the holders of the Preferred Securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such voting rights are
vested exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the applicable Trust
Agreement. The Corporation will pay all fees and expenses related to each
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Issuer and the offering of the Preferred Securities and will pay, directly or
indirectly, all ongoing costs, expenses and liabilities of each Issuer.
The principal executive office of each Issuer is 270 Park Avenue, New York,
New York 10017 and its telephone number is (212) 270-6000.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Corporation intends to use the proceeds from the sale of its Junior Subordinated
Debentures (including Corresponding Junior Subordinated Debentures issued to the
Issuers in connection with the investment by the Issuers of all of the proceeds
from the sale of Trust Securities) for general corporate purposes, including
investments in or loans to subsidiaries, refinancing of debt, including
outstanding commercial paper and other short-term indebtedness, redemption or
repurchase of shares of its outstanding common and preferred stock, the
satisfaction of other obligations or for such other purposes as may be specified
in the applicable Prospectus Supplement.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued in one or more series
under a Junior Subordinated Indenture, as supplemented from time to time (as so
supplemented, the "Indenture"), between the Corporation and The Bank of New
York, as trustee (the "Debenture Trustee"). This summary of certain terms and
provisions of the Junior Subordinated Debentures, Corresponding Junior
Subordinated Debentures and the Indenture, which summarizes the material
provisions thereof, does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the Indenture, the form of which is
filed as an exhibit to the Registration Statement of which this Prospectus forms
a part, and to the Trust Indenture Act, to each of which reference is hereby
made. The Indenture is qualified under the Trust Indenture Act. Whenever
particular defined terms of the Indenture (as supplemented or amended from time
to time) are referred to herein or in a Prospectus Supplement, such defined
terms are incorporated herein or therein by reference.
GENERAL
Each series of Junior Subordinated Debentures will rank pari passu with all
other series of Junior Subordinated Debentures and will be unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Debt (as defined below) of the Corporation.
See "-- Subordination." Because the Corporation is a holding company, the right
of the Corporation to participate in any distribution of assets of any
subsidiary, including The Chase Manhattan Bank, Chase Manhattan Bank USA,
National Association, and Texas Commerce Bank National Association, upon such
subsidiary's liquidation or reorganization or otherwise, is subject to the prior
claims of creditors of the subsidiary, except to the extent the Corporation may
itself be recognized as a creditor of that subsidiary. Accordingly, the Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of Junior
Subordinated Debentures should look only to the assets of the Corporation for
payments on the Junior Subordinated Debentures. Except as otherwise provided in
the applicable Prospectus Supplement, the Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the Corporation,
including Senior Debt, whether under the Indenture, any other existing indenture
or any other indenture that the Corporation may enter into in the future or
otherwise. See "-- Subordination" and the applicable Prospectus Supplement
relating to any offering of Preferred Securities or Junior Subordinated
Debentures.
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The Junior Subordinated Debentures will be issuable in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of the
Corporation's Board of Directors or a committee thereof.
The applicable Prospectus Supplement will describe the following terms of
the Junior Subordinated Debentures: (1) the title of the Junior Subordinated
Debentures; (2) any limit upon the aggregate principal amount of the Junior
Subordinated Debentures; (3) the date or dates on which the principal of the
Junior Subordinated Debentures is payable (the "Stated Maturity") or the method
of determination thereof; (4) the rate or rates, if any, at which the Junior
Subordinated Debentures shall bear interest, the dates on which any such
interest shall be payable (the "Interest Payment Dates"), the right, if any, of
the Corporation to defer or extend an Interest Payment Date, and the record
dates for any interest payable on any Interest Payment Date (the "Regular Record
Dates") or the method by which any of the foregoing shall be determined; (5) the
place or places where, subject to the terms of the Indenture as described below
under "-- Payment and Paying Agents," the principal of and premium, if any, and
interest on the Junior Subordinated Debentures will be payable and where,
subject to the terms of the Indenture as described below under "--
Denominations, Registration and Transfer," the Junior Subordinated Debentures
may be presented for registration of transfer or exchange and the place or
places where notices and demands to or upon the Corporation in respect of the
Junior Subordinated Debentures and the Indentures may be made ("Place of
Payment"); (6) any period or periods within which, or date or dates on which,
the price or prices at which and the terms and conditions upon which Junior
Subordinated Debentures may be redeemed, in whole or in part, at the option of
the Corporation or a holder thereof; (7) the obligation or the right, if any, of
the Corporation or a holder thereof to redeem, purchase or repay the Junior
Subordinated Debentures and the period or periods within which, the price or
prices at which, the currency or currencies (including currency unit or units)
in which and the other terms and conditions upon which the Junior Subordinated
Debentures shall be redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation; (8) the denominations in which any Junior Subordinated
Debentures shall be issuable if other than denominations of $25 and any integral
multiple thereof; (9) if other than in U.S. Dollars, the currency or currencies
(including currency unit or units) in which the principal of (and premium, if
any) and interest, if any, on the Junior Subordinated Debentures shall be
payable, or in which the Junior Subordinated Debentures shall be denominated;
(10) any additions, modifications or deletions in the events of default under
the Indenture or covenants of the Corporation specified in the Indenture with
respect to the Junior Subordinated Debentures; (11) if other than the principal
amount thereof, the portion of the principal amount of Junior Subordinated
Debentures that shall be payable upon declaration of acceleration of the
maturity thereof; (12) any additions or changes to the Indenture with respect to
a series of Junior Subordinated Debentures as shall be necessary to permit or
facilitate the issuance of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons; (13) any
index or indices used to determine the amount of payments of principal of and
premium, if any, on the Junior Subordinated Debentures and the manner in which
such amounts will be determined; (14) the terms and conditions relating to the
issuance of a temporary Global Security representing all of the Junior
Subordinated Debentures of such series and the exchange of such temporary Global
Security for definitive Junior Subordinated Debentures of such series; (15)
subject to the terms described herein under "-- Global Junior Subordinated
Debentures," whether the Junior Subordinated Debentures of the series shall be
issued in whole or in part in the form of one or more Global Securities and, in
such case, the depositary for such Global Securities, which depositary shall be
a clearing agency registered under the Exchange Act; (16) the appointment of any
paying agent or agents; (17) the terms and conditions of any obligation or right
of the Corporation or a holder to convert or exchange the Junior Subordinated
Debentures into Preferred Securities; (18) the form of Trust Agreement and
Guarantee Agreement, if applicable; (19) the relative degree, if any, to which
such Junior Subordinated Debentures of the series shall be senior to or be
subordinated to other series of such Junior Subordinated Debentures or other
indebtedness of the Corporation in right of payment, whether such other series
of Junior Subordi-
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nated Debentures or other indebtedness are outstanding or not; and (20) any
other terms of the Junior Subordinated Debentures not inconsistent with the
provisions of the Indenture.
Junior Subordinated Debentures may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. Certain United States federal
income tax consequences and special considerations applicable to any such Junior
Subordinated Debentures will be described in the applicable Prospectus
Supplement.
If the purchase price of any of the Junior Subordinated Debentures is
payable in one or more foreign currencies or currency units or if any Junior
Subordinated Debentures are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or interest on any
Junior Subordinated Debentures is payable in one or more foreign currencies or
currency units, the restrictions, elections, certain United States federal
income tax consequences, specific terms and other information with respect to
such series of Junior Subordinated Debentures and such foreign currency or
currency units will be set forth in the applicable Prospectus Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of Junior Subordinated Debentures,
special United States federal income tax, accounting and other considerations
applicable thereto will be described in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Junior Subordinated Debentures will be issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. Junior
Subordinated Debentures of any series will be exchangeable for other Junior
Subordinated Debentures of the same issue and series, of any authorized
denominations, of a like aggregate principal amount, of the same original issue
date and stated maturity and bearing the same interest rate.
Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the appropriate securities registrar or at the
office of any transfer agent designated by the Corporation for such purpose with
respect to any series of Junior Subordinated Debentures and referred to in the
applicable Prospectus Supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the Indenture. The
Corporation will appoint the Trustee as securities registrar under the
Indenture. If the applicable Prospectus Supplement refers to any transfer agents
(in addition to the securities registrar) initially designated by the
Corporation with respect to any series of Junior Subordinated Debentures, the
Corporation may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent acts,
provided that the Corporation maintains a transfer agent in each place of
payment for such series. The Corporation may at any time designate additional
transfer agents with respect to any series of Junior Subordinated Debentures.
In the event of any redemption, neither the Corporation nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Junior Subordinated Debentures of any series during a period beginning at the
opening of business 15 days before the day of selection for redemption of Junior
Subordinated Debentures of that series and ending at the close of business on
the day of mailing of the relevant notice of redemption or (ii) transfer or
exchange any Junior Subordinated Debentures so selected for redemption, except,
in the case of any Junior Subordinated Debentures being redeemed in part, any
portion thereof not to be redeemed.
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GLOBAL JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures of a series may be issued in whole or in
part in the form of one or more Global Junior Subordinated Debentures that will
be deposited with, or on behalf of, a depositary (the "Depositary") identified
in the Prospectus Supplement relating to such series. Global Junior Subordinated
Debentures may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual Junior Subordinated Debentures represented thereby, a Global Junior
Subordinated Debenture may not be transferred except as a whole by the
Depositary for such Global Junior Subordinated Debenture to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any nominee to a successor
Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Junior Subordinated Debentures will be described in the Prospectus Supplement
relating to such series. The Corporation anticipates that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture, and the
deposit of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated Debenture or its
nominee will credit, on its book-entry registration and transfer system, the
respective principal amounts of the individual Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture to the accounts of
persons that have accounts with such Depositary ("Participants"). Such accounts
shall be designated by the dealers, underwriters or agents with respect to such
Junior Subordinated Debentures or by the Corporation if such Junior Subordinated
Debentures are offered and sold directly by the Corporation. Ownership of
beneficial interests in a Global Junior Subordinated Debenture will be limited
to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Junior Subordinated Debenture
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the applicable Depositary or its nominee (with
respect to interests of Participants) and the records of Participants (with
respect to interests of persons who hold through Participants). The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Junior Subordinated
Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture, or
its nominee, is the registered owner of such Global Junior Subordinated
Debenture, such Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture for all purposes under
the Indenture governing such Junior Subordinated Debentures. Except as provided
below, owners of beneficial interests in a Global Junior Subordinated Debenture
will not be entitled to have any of the individual Junior Subordinated
Debentures of the series represented by such Global Junior Subordinated
Debenture registered in their names, will not receive or be entitled to receive
physical delivery of any such Junior Subordinated Debentures of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Junior Subordinated Debentures represented by a Global Junior Subordinated
Debenture registered in the name of a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner of
the Global Junior Subordinated Debenture representing such Junior Subordinated
Debentures. None of the Corporation, the Debenture Trustee, any Paying Agent, or
the Securities Registrar for such Junior Subordinated Debentures will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global Junior
Subordinated Debenture representing such Junior Subordinated
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<PAGE> 41
Debentures or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Corporation expects that the Depositary for a series of Junior
Subordinated Debentures or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of a permanent Global Junior
Subordinated Debenture representing any of such Junior Subordinated Debentures,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount of
such Global Junior Subordinated Debenture for such Junior Subordinated
Debentures as shown on the records of such Depositary or its nominee. The
Corporation also expects that payments by Participants to owners of beneficial
interests in such Global Junior Subordinated Debenture held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." Such payments will be the responsibility of
such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Corporation within 90 days, the Corporation
will issue individual Junior Subordinated Debentures of such series in exchange
for the Global Junior Subordinated Debenture representing such series of Junior
Subordinated Debentures. In addition, the Corporation may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Junior Subordinated Debentures, determine not to
have any Junior Subordinated Debentures of such series represented by one or
more Global Junior Subordinated Debentures and, in such event, will issue
certificated Junior Subordinated Debentures of such series in exchange for the
Global Junior Subordinated Debenture. Further, if the Corporation so specifies
with respect to the Junior Subordinated Debentures of a series, an owner of a
beneficial interest in a Global Junior Subordinated Debenture representing
Junior Subordinated Debentures of such series may, on terms acceptable to the
Corporation, the Debenture Trustee and the Depositary for such Global Junior
Subordinated Debenture, receive certificated Junior Subordinated Debentures of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Junior
Subordinated Debentures. In any such instance, an owner of a beneficial interest
in a Global Junior Subordinated Debenture will be entitled to physical delivery
of certificated Junior Subordinated Debentures of the series represented by such
Global Junior Subordinated Debenture equal in principal amount to such
beneficial interest and to have such Junior Subordinated Debentures registered
in its name. Individual Junior Subordinated Debentures of such series so issued
will be issued in denominations, unless otherwise specified by the Corporation,
of $25 and integral multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Junior Subordinated
Debentures will be made at the office of the Debenture Trustee in the City of
New York or at the office of such paying agent or paying agents as the
Corporation may designate from time to time in the applicable Prospectus
Supplement, except that at the option of the Corporation payment of any interest
may be made (i) except in the case of Global Junior Subordinated Debentures, by
check mailed to the address of the person entitled thereto as such address shall
appear in the securities register or (ii) by transfer to an account maintained
by the person entitled thereto as specified in the securities register, provided
that proper transfer instructions have been received by the Regular Record Date.
Unless otherwise indicated in the applicable Prospectus Supplement, payment of
any interest on Junior Subordinated Debentures will be made to the person in
whose name such Junior Subordinated Debenture is registered at the close of
business on the Regular Record Date for such interest, except in the case of
defaulted interest. The Corporation may at any time designate additional paying
agents or rescind
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the designation of any paying agent; however the Corporation will at all times
be required to maintain a paying agent in each place of payment for each series
of Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any paying agent, or
then held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Corporation, be repaid
to the Corporation and the holder of such Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Corporation for
payment thereof.
OPTION TO DEFER INTEREST PAYMENTS
If provided in the applicable Prospectus Supplement, the Corporation will
have the right at any time and from time to time during the term of any series
of Junior Subordinated Debentures to defer payment of interest for up to such
number of consecutive interest payment periods as may be specified in the
applicable Prospectus Supplement (each, an "Extension Period"), subject to the
terms, conditions and covenants, if any, specified in such Prospectus
Supplement, provided that such Extension Period may not extend beyond the Stated
Maturity of such series of Junior Subordinated Debentures. Certain United States
federal income tax consequences and special considerations applicable to any
such Junior Subordinated Debentures will be described in the applicable
Prospectus Supplement.
REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement, Junior
Subordinated Debentures will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation may, at its option and subject to receipt of prior approval by the
Board of Governors of the Federal Reserve System (the "Federal Reserve") if then
required under applicable capital guidelines or policies, redeem the Junior
Subordinated Debentures of any series in whole at any time or in part from time
to time. If the Junior Subordinated Debentures of any series are so redeemable
only on or after a specified date or upon the satisfaction of additional
conditions, the applicable Prospectus Supplement will specify such date or
describe such conditions. Junior Subordinated Debentures in denominations larger
than $25 may be redeemed in part but only in integral multiples of $25. Except
as otherwise specified in the applicable Prospectus Supplement, the redemption
price for any Junior Subordinated Debenture so redeemed shall equal any accrued
and unpaid interest thereon to the redemption date, plus 100% of the principal
amount thereof.
Except as otherwise specified in the applicable Prospectus Supplement, if a
Debenture Tax Event (as defined below) in respect of a series of Junior
Subordinated Debentures or a Capital Treatment Event (as defined herein) shall
occur and be continuing, the Corporation may, at its option and subject to
receipt of prior approval by the Federal Reserve if then required under
applicable capital guidelines or policies, redeem such series of Junior
Subordinated Debentures in whole (but not in part) at any time within 90 days
following of the occurrence of such Debenture Tax Event or Capital Treatment
Event, at a redemption price equal to 100% of the principal amount of such
Junior Subordinated Debentures then outstanding plus accrued and unpaid interest
to the date fixed for redemption, except as otherwise specified in the
applicable Prospectus Supplement.
"Debenture Tax Event" means the receipt by the Corporation of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced proposed change) in, the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement or
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decision is announced on or after the date of issuance of the applicable series
of Junior Subordinated Debentures under the Indenture, there is more than an
insubstantial risk that interest payable by the Corporation on such series of
Junior Subordinated Debentures is not, or within 90 days of the date of such
opinion will not be, deductible by the Corporation, in whole or in part, for
United States federal income tax purposes.
A "Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of any amendment to, or change (including any
proposed change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such proposed change, pronouncement, action or decision is
announced on or after the date of issuance of the applicable Preferred
Securities under the applicable Trust Agreement, there is more than an
insubstantial risk that the Corporation will not be entitled to treat an amount
equal to the Liquidation Amount of the applicable Preferred Securities as "Tier
I Capital" (or the then equivalent thereof) for purposes of the capital adequacy
guidelines of the Federal Reserve, as then in effect and applicable to the
Corporation.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Junior Subordinated
Debentures to be redeemed at its registered address. Unless the Corporation
defaults in payment of the redemption price, on and after the redemption date
interest ceases to accrue on such Junior Subordinated Debentures or portions
thereof called for redemption.
RESTRICTIONS ON CERTAIN PAYMENTS
The Corporation will also covenant, as to each series of Junior
Subordinated Debentures, that it will not, and will not permit any subsidiary of
the Corporation to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Corporation's capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of the
Corporation (including other series of Junior Subordinated Debentures) that rank
pari passu with or junior in interest to the Junior Subordinated Debentures or
(iii) make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation if such
guarantee ranks pari passu with or junior in interest to the Junior Subordinated
Debentures (other than (a) dividends or distributions in capital stock of the
Corporation, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the redemption or repurchase
of any such rights pursuant thereto, (c) payments under any Guarantee with
respect to the series of Related Preferred Securities and (d) purchases of
common stock related to the issuance of common stock or rights under any of the
Corporation's benefit plans for its directors, officers or employees, related to
the issuance of common stock or rights under a dividend reinvestment and stock
purchase plan, or related to the issuance of common stock (or securities
convertible into or exchangeable for common stock) as consideration in an
acquisition transaction) if at such time (i) there shall have occurred any event
of which the Corporation has actual knowledge (a) that with the giving of notice
or the lapse of time, or both, would constitute an "Event of Default" under the
Indenture with respect to the Junior Subordinated Debentures of such series and
(b) in respect of which the Corporation shall not have taken reasonable steps to
cure, (ii) if such Junior Subordinated Debentures are held by an Issuer of a
series of Related Preferred Securities, the Corporation shall be in default with
respect to its payment of any obligations under the Guarantee relating to such
Related Preferred Securities or (iii) the Corporation shall have given notice of
its selection of an Extension Period as provided in the Indenture with respect
to the Junior Subordinated Debentures of such series and shall not have
rescinded such notice, or such Extension Period, or any extension thereof, shall
be continuing.
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MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of any series of Junior Subordinated Debentures,
amend, waive or supplement the Indenture for specified purposes, including,
among other things, curing ambiguities, defects or inconsistencies (provided
that any such action does not materially adversely affect the interest of the
holders of any series of Junior Subordinated Debentures or, in the case of
Corresponding Junior Subordinated Debentures, the holders of the Related
Preferred Securities so long as they remain outstanding) and qualifying, or
maintaining the qualification of, the Indenture under the Trust Indenture Act.
The Indenture contains provisions permitting the Corporation and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of each outstanding series of Junior Subordinated Debentures
affected, to modify the Indenture in a manner adversely affecting the rights of
the holders of such series of the Junior Subordinated Debentures in any material
respect; provided, that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Debenture so affected, (i) change
the Stated Maturity of any series of Junior Subordinated Debentures (except as
otherwise specified in the applicable Prospectus Supplement), or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon or (ii) reduce the percentage of principal amount of Junior
Subordinated Debentures of any series, the holders of which are required to
consent to any such modification of the Indenture, provided further that, in the
case of Corresponding Junior Subordinated Debentures, so long as any Related
Preferred Securities remain outstanding, (a) no such modification may be made
that adversely affects the holders of such Preferred Securities in any material
respect, and no termination of the Indenture may occur, and no waiver of any
event of default or compliance with any covenant under the Indenture may be
effective, without the prior consent of the holders of at least a majority of
the aggregate Liquidation Amount of all outstanding Related Preferred Securities
affected unless and until the principal of the Corresponding Junior Subordinated
Debentures and all accrued and unpaid interest thereon have been paid in full
and certain other conditions have been satisfied, and (b) where a consent under
the Indenture would require the consent of each holder of Corresponding Junior
Subordinated Debentures, no such consent shall be given by the Property Trustee
without the prior consent of each holder of Related Preferred Securities.
In addition, the Corporation and the Debenture Trustee may execute, without
the consent of any holder of Junior Subordinated Debentures, any supplemental
Indenture for the purpose of creating any new series of Junior Subordinated
Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on such series of Junior
Subordinated Debentures when due (subject to the deferral of any interest
payment in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on such series
of Junior Subordinated Debentures when due whether at maturity or upon
redemption; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to the Corporation from the Debenture Trustee or the holders of at least
25% in aggregate outstanding principal amount of such affected series of
outstanding Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Corporation.
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The holders of a majority in aggregate outstanding principal amount of
Junior Subordinated Debentures of each series affected have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Debenture Trustee. The Debenture Trustee or the holders of not less than
25% in aggregate outstanding principal amount of Junior Subordinated Debentures
of each series affected may declare the principal due and payable immediately
upon a Debenture Event of Default, and, in the case of Corresponding Junior
Subordinated Debentures, should the Debenture Trustee or such holders of such
Corresponding Junior Subordinated Debentures fail to make such declaration, the
holders of at least 25% in aggregate Liquidation Amount of the Related Preferred
Securities shall have such right. The holders of a majority in aggregate
outstanding principal amount of Junior Subordinated Debentures of each series
affected may annul such declaration. In the case of Corresponding Junior
Subordinated Debentures, should the holders of such Corresponding Junior
Subordinated Debentures fail to annul such declaration and waive such default,
the holders of a majority in aggregate Liquidation Amount of the Related
Preferred Securities affected shall have such right.
The holders of a majority in aggregate outstanding principal amount of each
series of the Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Junior Subordinated Debentures, waive any default, except
a default in the payment of principal or interest (unless such default has been
cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
Debenture Trustee) or a default in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding Junior Subordinated Debenture. In the case of
Corresponding Junior Subordinated Debentures, should the holders of such
Corresponding Junior Subordinated Debentures fail to waive such default, the
holders of a majority in aggregate Liquidation Amount of the Related Preferred
Securities affected shall have such right. The Corporation is required to file
annually with the Debenture Trustee a certificate as to whether or not the
Corporation is in compliance with all the conditions and covenants applicable to
it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing as to a
series of Corresponding Junior Subordinated Debentures, the Property Trustee
will have the right to declare the principal of and the interest on such
Corresponding Junior Subordinated Debentures, and any other amounts payable
under the Indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to such Corresponding Junior Subordinated
Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default with respect to a series of Corresponding
Junior Subordinated Debentures has occurred and is continuing and such event is
attributable to the failure of the Corporation to pay interest or principal on
such Corresponding Junior Subordinated Debentures on the date such interest or
principal is due and payable, a holder of Preferred Securities may institute a
legal proceeding directly against the Corporation for enforcement of payment to
such holder of the principal of or interest on such Corresponding Junior
Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Related Preferred Securities of such holder (a "Direct
Action"). The Corporation may not amend the Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of the holders
of all of the Preferred Securities outstanding. If the right to bring a Direct
Action is removed, the applicable Issuer may become subject to the reporting
obligations under the Exchange Act. The Corporation shall have the right under
the Indenture to set-off any payment made to such holder of Preferred Securities
by the Corporation in connection with a Direct Action.
The holders of the Preferred Securities will not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Junior Subordinated Debentures unless there
shall have been an event of default under the Trust Agreement. See "Description
of Preferred Securities -- Events of Default; Notice."
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CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Corporation or convey, transfer or lease its
properties and assets substantially as an entirety to the Corporation, unless
(i) in case the Corporation consolidates with or merges into another Person or
conveys or transfers its properties and assets substantially as an entirety to
any Person, the successor Person is organized under the laws of the United
States or any state or the District of Columbia, and such successor Person
expressly assumes the Corporation's obligations on the Junior Subordinated
Debentures issued under the Indenture; (ii) immediately after giving effect
thereto, no Debenture Event of Default, and no event which, after notice or
lapse of time or both, would become a Debenture Event of Default, shall have
occurred and be continuing; (iii) in the case of Corresponding Junior
Subordinated Debentures, such transaction is permitted under the related Trust
Agreement and Guarantee and does not give rise to any breach or violation of the
related Trust Agreement or Guarantee, and (iv) certain other conditions as
prescribed by the Indenture are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Corporation that may adversely affect holders of the
Junior Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at their Stated Maturity within one year, and the Corporation deposits or causes
to be deposited with the Debenture Trustee funds, in trust, for the purpose and
in an amount in the currency or currencies in which the Junior Subordinated
Debentures are payable sufficient to pay and discharge the entire indebtedness
on the Junior Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation, for the principal (and premium, if any) and interest
to the date of the deposit or to the Stated Maturity, as the case may be, then
the Indenture will cease to be of further effect (except as to the Corporation's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Corporation will be deemed to have satisfied and discharged the Indenture.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable Prospectus Supplement, the
Junior Subordinated Debentures of any series may be convertible or exchangeable
into Junior Subordinated Debentures of another series or into Preferred
Securities of another series. The specific terms on which Junior Subordinated
Debentures of any series may be so converted or exchanged will be set forth in
the applicable Prospectus Supplement. Such terms may include provisions for
conversion or exchange, either mandatory, at the option of the holder, or at the
option of the Corporation, in which case the number of shares of Preferred
Securities or other securities to be received by the holders of Junior
Subordinated Debentures would be calculated as of a time and in the manner
stated in the applicable Prospectus Supplement.
SUBORDINATION
In the Indenture, the Corporation has covenanted and agreed that any Junior
Subordinated Debentures issued thereunder will be subordinate and junior in
right of payment to all Senior Debt to the extent provided in the Indenture.
Upon any payment or distribution of assets of the Corporation upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in
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connection with any insolvency or bankruptcy proceeding of the Corporation, the
holders of Senior Debt will first be entitled to receive payment in full of
principal of (and premium, if any) and interest, if any, on such Senior Debt
before the holders of Junior Subordinated Debentures or, in the case of
Corresponding Junior Subordinated Debentures, the Property Trustee, on behalf of
the holders of Trust Securities, will be entitled to receive or retain any
payment in respect of the principal of (and premium, if any) or interest, if
any, on the Junior Subordinated Debentures; provided, however, that holders of
Senior Debt shall not be entitled to receive payment of any such amounts to the
extent that such holders would be required by the subordination provisions of
such Senior Debt to pay such amounts over to the obligees on trade accounts
payable or other liabilities arising in the ordinary course of the Corporation's
business.
In the event of the acceleration of the maturity of any Junior Subordinated
Debentures, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon (including any amounts due upon acceleration) before the holders of
Junior Subordinated Debentures will be entitled to receive or retain any payment
in respect of the principal of (or premium, if any) or interest, if any, on the
Junior Subordinated Debentures; provided, however, that holders of Senior Debt
shall not be entitled to receive payment of any such amounts to the extent that
such holders would be required by the subordination provisions of such Senior
Debt to pay such amounts over to the obligees on trade accounts payable or other
liabilities arising in the ordinary course of the Corporation's business.
No payments on account of principal (or premium, if any) or interest in
respect of the Junior Subordinated Debentures may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior Debt
or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) every
obligation of such Person for claims in respect of derivative products such as
interest and foreign exchange rate contracts, commodity contracts and similar
arrangements; and (vii) and every obligation of the type referred to in clauses
(i) through (vi) of another Person and all dividends of another Person the
payment of which, in either case, such Person has guaranteed or is responsible
or liable, directly or indirectly, as obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Corporation whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Junior Subordinated Debentures or to other
Debt which is pari passu with, or subordinated to, the Junior Subordinated
Debentures; provided, however, that Senior Debt shall not be deemed to include
(i) any Debt of the Corporation which when incurred and without respect to any
election under Section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Corporation, (ii) any Debt of the
Corporation to any of its subsidiaries, (iii) Debt to any employee of the
Corporation, (iv) Debt which by its terms is subordinated to trade accounts
payable or accrued liabilities arising in the ordinary course of business to the
extent that payments made to the holders
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of such Debt by the holders of the Junior Subordinated Debentures as a result of
the subordination provisions of the Indenture would be greater than such
payments otherwise would have been as a result of any obligation of such holders
of such Debt to pay amounts over to the obligees on such trade accounts payable
or accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject, and (v) any other debt
securities issued pursuant to the Indenture.
The Indenture places no limitation on the amount of Senior Debt that may be
incurred by the Corporation. The Corporation expects from time to time to incur
additional indebtedness and other obligations constituting Senior Debt.
The Indenture provides that the foregoing subordination provisions, insofar
as they relate to any particular issue of Junior Subordinated Debentures, may be
changed prior to such issuance. Any such change would be described in the
applicable Prospectus Supplement.
TRUST EXPENSES
Pursuant to the Indenture, the Corporation will irrevocably and
unconditionally agree with each Issuer that holds Junior Subordinated Debentures
that the Corporation will pay to such Issuer, and reimburse such Issuer for, the
full amount of any costs, expenses or liabilities of the Issuer, other than
obligations of the Issuer to pay to the holders of any Preferred Securities or
other similar interests in the Issuer the amounts due such holders pursuant to
the terms of the Preferred Securities or such other similar interests, as the
case may be. Such payment obligation will include any such costs, expenses or
liabilities of the Issuer that are required by applicable law to be satisfied in
connection with a termination of such Issuer.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by
and construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures may be issued in one or
more series of Junior Subordinated Debentures under the Indenture with terms
corresponding to the terms of a series of Related Preferred Securities. In that
event, concurrently with the issuance of each Issuer's Preferred Securities,
such Issuer will invest the proceeds thereof and the consideration paid by the
Corporation for the Common Securities of such Issuer in such series of
Corresponding Junior Subordinated Debentures issued by the Corporation to such
Issuer. Each series of Corresponding Junior Subordinated Debentures will be in
the principal amount equal to the aggregate stated Liquidation Amount of the
Related Preferred Securities and the Common Securities of such Issuer and will
rank pari passu with all other series of Junior Subordinated Debentures. Holders
of the Related Preferred Securities for a series of Corresponding Junior
Subordinated Debentures will have the rights, in connection with modifications
to the Indenture or upon occurrence of Debenture Events of Default, as described
under "-- Modification of Indenture" and " -- Debenture Events of
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Default," unless provided otherwise in the Prospectus Supplement for such
Related Preferred Securities.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Tax Event in respect of an Issuer shall occur and be continuing, the Corporation
may, at its option and subject to prior approval of the Federal Reserve if then
so required under applicable capital guidelines or policies, redeem the
Corresponding Junior Subordinated Debentures at any time within 90 days of the
occurrence of such Tax Event, in whole but not in part, subject to the
provisions of the Indenture and whether or not such Corresponding Junior
Subordinated Debentures are then otherwise redeemable at the option of the
Corporation. The redemption price for any Corresponding Junior Subordinated
Debentures shall be equal to 100% of the principal amount of such Corresponding
Junior Subordinated Debentures then outstanding plus accrued and unpaid interest
to the date fixed for redemption. For so long as the applicable Issuer is the
holder of all the outstanding Corresponding Junior Subordinated Debentures of
such series, the proceeds of any such redemption will be used by the Issuer to
redeem the corresponding Trust Securities in accordance with their terms. The
Corporation may not redeem a series of Corresponding Junior Subordinated
Debentures in part unless all accrued and unpaid interest has been paid in full
on all outstanding Corresponding Junior Subordinated Debentures of such series
for all interest periods terminating on or prior to the Redemption Date.
The Corporation will covenant in the Indenture, as to each series of
Corresponding Junior Subordinated Debentures, that if and so long as (i) the
Issuer of the related series of Trust Securities is the holder of all such
Corresponding Junior Subordinated Debentures, (ii) a Tax Event in respect of
such Issuer has occurred and is continuing and (iii) the Corporation has
elected, and has not revoked such election, to pay Additional Sums (as defined
under "Description of Preferred Securities -- Redemption or Exchange") in
respect of such Trust Securities, the Corporation will pay to such Issuer such
Additional Sums. The Corporation will also covenant, as to each series of
Corresponding Junior Subordinated Debentures, (i) to maintain directly or
indirectly 100% ownership of the Common Securities of the Issuer to which such
Corresponding Junior Subordinated Debentures have been issued, provided that
certain successors which are permitted pursuant to the Indenture may succeed to
the Corporation's ownership of the Common Securities, (ii) not to voluntarily
terminate, wind up or liquidate any Issuer, except (a) in connection with a
distribution of Corresponding Junior Subordinated Debentures to the holders of
the Preferred Securities in exchange therefor upon liquidation of such Issuer,
or (b) in connection with certain mergers, consolidations or amalgamations
permitted by the related Trust Agreement, in either such case, if so specified
in the applicable Prospectus Supplement upon prior approval of the Federal
Reserve if then so required under applicable capital guidelines or policies, and
(iii) to use its reasonable efforts, consistent with the terms and provisions of
the related Trust Agreement, to cause such Issuer to remain classified as a
grantor trust and not as an association taxable as a corporation for United
States federal income tax purposes.
DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement for each Issuer, the Issuer
Trustees on behalf of such Issuer will issue the Preferred Securities and the
Common Securities. The Preferred Securities of a particular issue will represent
beneficial ownership interests in the Issuer and the holders thereof will be
entitled to a preference in certain circumstances with respect to Distributions
and amounts payable on redemption or liquidation over the Common Securities of
such Issuer, as well as other benefits as described in the corresponding Trust
Agreement. This summary of certain provisions of the Preferred Securities and
each Trust Agreement, which summarizes the material terms thereof, does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of each Trust Agreement, including the
definitions therein of certain terms, and the Trust Indenture Act, to each of
which reference is hereby made. Wherever particular defined terms of a Trust
Agreement (as amended or supplemented from time to time) are referred
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to herein or in a Prospectus Supplement, such defined terms are incorporated
herein or therein by reference. The form of the Trust Agreement has been filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part. Each of the Issuers is a legally separate entity and the assets of one are
not available to satisfy the obligations of any of the others.
GENERAL
The Preferred Securities of an Issuer will rank pari passu, and payments
will be made thereon pro rata, with the Common Securities of that Issuer except
as described under "-- Subordination of Common Securities." Legal title to the
Corresponding Junior Subordinated Debentures will be held by the Property
Trustee in trust for the benefit of the holders of the related Preferred
Securities and Common Securities. Each Guarantee Agreement executed by the
Corporation for the benefit of the holders of an Issuer's Trust Securities (the
"Guarantee") will be a guarantee on a subordinated basis with respect to the
related Trust Securities but will not guarantee payment of Distributions or
amounts payable on redemption or liquidation of such Trust Securities when the
related Issuer does not have funds on hand available to make such payments. See
"Description of Guarantees."
DISTRIBUTIONS
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the applicable Prospectus Supplement. In the event that any date
on which Distributions are payable on the Preferred Securities is not a Business
Day (as defined below), payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect to any such delay) except that, if such Business Day
is in the next succeeding calendar year, payment of such Distribution shall be
made on the immediately preceding Business Day, in either case with the same
force and effect as if made on such date (each date on which Distributions are
payable in accordance with the foregoing, a "Distribution Date"). A "Business
Day" shall mean any day other than a Saturday or a Sunday, or a day on which
banking institutions in The City of New York are authorized or required by law
or executive order to remain closed or a day on which the corporate trust office
of the Property Trustee or the Debenture Trustee is closed for business.
Each Issuer's Preferred Securities represent beneficial ownership interests
in the applicable Issuer, and the Distributions on each Preferred Security will
be payable at a rate specified in the applicable Prospectus Supplement for such
Preferred Securities. The amount of Distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months unless otherwise
specified in the applicable Prospectus Supplement. Distributions to which
holders of Preferred Securities are entitled will accumulate additional
Distributions at the rate per annum if and as specified in the applicable
Prospectus Supplement. The term "Distributions" as used herein includes any such
additional Distributions unless otherwise stated.
If provided in the applicable Prospectus Supplement, the Corporation has
the right under the Indenture, pursuant to which it will issue the Corresponding
Junior Subordinated Debentures, to defer the payment of interest at any time or
from time to time on any series of the Corresponding Junior Subordinated
Debentures for up to such number of consecutive interest payment periods which
will be specified in such Prospectus Supplement relating to such series (each,
an "Extension Period"), provided that no Extension Period may extend beyond the
Stated Maturity of the Corresponding Junior Subordinated Debentures. As a
consequence of any such deferral, Distributions on the Related Preferred
Securities would be deferred (but would continue to accumulate additional
Distributions thereon at the rate per annum set forth in the Prospectus
Supplement for such Preferred Securities) by the Issuer of such Preferred
Securities during any such Extension Period. During such Extension Period, the
Corporation may not, and may not permit any subsidiary of the Corporation to,
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Corporation's
capital stock,
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(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation that rank pari passu
with or junior in interest to the Corresponding Junior Subordinated Debentures
or (iii) make any guarantee payments with respect to any guarantee by the
Corporation of debt securities of any subsidiary of the Corporation if such
guarantee ranks pari passu with or junior in interest to the Corresponding
Junior Subordinated Debentures (other than (a) dividends or distributions in
capital stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, the
redemption or repurchase of any such rights pursuant thereto, (c) payments under
the Guarantee with respect to such Preferred Securities and (d) purchases of
common stock related to the issuance of common stock or rights under any of the
Corporation's benefit plans for its directors, officers or employees related to
the issuance of common stock or rights under a dividend reinvestment and stock
purchase plan, or related to the issuance of common stock (or securities
convertible into or exchangeable for common stock) as consideration in an
acquisition transaction).
The revenue of each Issuer available for distribution to holders of its
Preferred Securities will be limited to payments under the Corresponding Junior
Subordinated Debentures in which the Issuer will invest the proceeds from the
issuance and sale of its Trust Securities. See "Description of Junior
Subordinated Debentures -- Corresponding Junior Subordinated Debentures." If the
Corporation does not make interest payments on such Corresponding Junior
Subordinated Debentures, the Property Trustee will not have funds available to
pay Distributions on the Related Preferred Securities. The payment of
Distributions (if and to the extent the Issuer has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Corporation on the basis set forth herein under "Description
of Guarantees."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of such Issuer on the relevant record
dates, which, as long as the Preferred Securities remain in book-entry form,
will be one Business Day prior to the relevant Distribution Date. Subject to any
applicable laws and regulations and the provisions of the applicable Trust
Agreement, each such payment will be made as described under "Book-Entry
Issuance." In the event any Preferred Securities are not in book-entry form, the
relevant record date for such Preferred Securities shall be the date at least 15
days prior to the relevant Distribution Date, as specified in the applicable
Prospectus Supplement.
REDEMPTION OR EXCHANGE
Mandatory Redemption. Upon the repayment or redemption, in whole or in
part, of any Corresponding Junior Subordinated Debentures, whether at maturity
or upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days notice, at a redemption price (the "Redemption Price")
equal to the aggregate Liquidation Amount of such Trust Securities plus
accumulated but unpaid Distributions thereon to the date of redemption (the
"Redemption Date") and the related amount of the premium, if any, paid by the
Corporation upon the concurrent redemption of such Corresponding Junior
Subordinated Debentures. See "Description of Junior Subordinated
Debentures -- Redemption." If less than all of any series of Corresponding
Junior Subordinated Debentures are to be repaid or redeemed on a Redemption
Date, then the proceeds from such repayment or redemption shall be allocated to
the redemption pro rata of the related Preferred Securities and the Common
Securities. The amount of premium, if any, paid by the Corporation upon the
redemption of all or any part of any series of any Corresponding Junior
Subordinated Debentures to be repaid or redeemed on a Redemption Date shall be
allocated to the redemption pro rata of the related Preferred Securities and the
Common Securities.
The Corporation will have the right to redeem any series of Corresponding
Junior Subordinated Debentures (i) on or after such date as may be specified in
the applicable Prospectus Supplement, in whole at any time or in part from time
to time, or (ii) at any time, in whole (but not in part), upon
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the occurrence of a Tax Event or Capital Treatment Event, in either case subject
to receipt of prior approval by the Federal Reserve if then required under
applicable capital guidelines or policies.
Distribution of Corresponding Junior Subordinated Debentures. Subject to
the Corporation having received prior approval of the Federal Reserve to do so
if then required under applicable capital guidelines or policies, the
Corporation has the right at any time to liquidate the related Issuer and, after
satisfaction of the liabilities of creditors of such Issuer as provided by
applicable law, cause such Corresponding Junior Subordinated Debentures in
respect of the Preferred Securities and Common Securities issued by such issuer
to be distributed to the holders of such Preferred Securities and Common
Securities in exchange therefor upon liquidation of the Issuer.
Tax Event or Capital Treatment Event Redemption. If a Tax Event or Capital
Treatment Event in respect of a series of Preferred Securities and Common
Securities shall occur and be continuing, the Corporation has the right to
redeem the Corresponding Junior Subordinated Debentures in whole (but not in
part) and thereby cause a mandatory redemption of such Preferred Securities and
Common Securities in whole (but not in part) at the Redemption Price within 90
days following the occurrence of such Tax Event or Capital Treatment Event. In
the event a Tax Event or Capital Treatment Event in respect of a series of
Preferred Securities and Common Securities has occurred and is continuing and
the Corporation does not elect to redeem the Corresponding Junior Subordinated
Debentures and thereby cause a mandatory redemption of such Preferred Securities
and Common Securities or to liquidate the related Issuer and cause the
Corresponding Junior Subordinated Debentures to be distributed to holders of
such Preferred Securities and Common Securities in exchange therefor upon
liquidation of the Issuer as described above, such Preferred Securities will
remain outstanding and Additional Sums (as defined below) may be payable on the
Corresponding Junior Subordinated Debentures.
Possible Tax Law Changes. On March 19, 1996, the Revenue Reconciliation
Bill of 1996 (the "Bill"), the revenue portion of President Clinton's budget
proposal, was released. The Bill would, among other things, generally deny
interest deductions for interest on an instrument issued by a corporation that
has a maximum weighted average maturity of more than 40 years. The Bill would
also generally deny interest deductions for interest on an instrument issued by
a corporation that has a maximum term of more than 20 years and that is not
shown as indebtedness on the separate balance sheet of the issuer or, where the
instrument is issued to a related party (other than a corporation), where the
holder or some other related party issues a related instrument that is not shown
as indebtedness on the issuer's consolidated balance sheet. For purposes of
determining the weighted average maturity or the term of an instrument, any
right to extend would be treated as exercised. The above-described provisions of
the Bill were proposed to be effective generally for instruments issued on or
after December 7, 1995. If either provision were to apply to the Junior
Subordinated Debentures, the Corporation would not be able to deduct interest on
the Junior Subordinated Debentures. However, on March 29, 1996, the Chairmen of
the Senate Finance and House Ways and Means Committees issued a joint statement
(the "Joint Statement") to the effect that it was their intention that the
effective date of the President's legislative proposals, if adopted, would be no
earlier than the date of appropriate Congressional action. In addition,
subsequent to the publication of the Joint Statement, Senator Daniel Patrick
Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote letters
to Treasury Department officials concurring with the view expressed in the Joint
Statement (the "Democrat Letters"). If the principles contained in the Joint
Statement and the Democrat Letters were followed and the Bill was enacted, such
legislation would not apply to the Junior Subordinated Debentures. There can be
no assurance, however, that current or future legislative proposals or final
legislation will not adversely affect the ability of the Corporation to deduct
interest on the Junior Subordinated Debentures or otherwise affect the tax
treatment of the transaction described herein. Moreover, such a change could
give rise to a Tax Event, which may permit the Corporation to cause a redemption
of the Related Preferred Securities.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by an Issuer on the
outstanding Preferred Securities and
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Common Securities of the Issuer shall not be reduced as a result of any
additional taxes, duties and other governmental charges to which such Issuer has
become subject as a result of a Tax Event.
"Like Amount" means (i) with respect to a redemption of any series of Trust
Securities, Trust Securities of such series having a Liquidation Amount (as
defined below) equal to that portion of the principal amount of Corresponding
Junior Subordinated Debentures to be contemporaneously redeemed in accordance
with the Indenture, allocated to the Common Securities and to the Preferred
Securities pro rata based upon the relative Liquidation Amounts of such classes
and the proceeds of which will be used to pay the Redemption Price of such Trust
Securities, and (ii) with respect to a distribution of Corresponding Junior
Subordinated Debentures to holders of any series of Trust Securities in exchange
therefor in connection with a dissolution or liquidation of the related Issuer,
Corresponding Junior Subordinated Debentures having a principal amount equal to
the Liquidation Amount of the Trust Securities of the holder to whom such
Corresponding Junior Subordinated Debentures would be distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Tax Event" with respect to an Issuer means the receipt by the Issuer of a
series of Preferred Securities of an opinion of counsel experienced in such
matters to the effect that, as a result of any amendment to, or change
(including any announced proposed change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which proposed change,
pronouncement or decision is announced on or after the date of issuance of such
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) such Issuer is, or will be within 90 days of the
date of such opinion, subject to United States federal income tax with respect
to income received or accrued on the corresponding series of Corresponding
Junior Subordinated Debentures, (ii) interest payable by the Corporation on such
series of Corresponding Junior Subordinated Debentures is not, or within 90 days
of the date of such opinion, will not be, deductible by the Corporation, in
whole or in part, for United States federal income tax purposes, or (iii) such
Issuer is, or will be within 90 days of the date of such opinion, subject to
more than a de minimis amount of other taxes, duties or other governmental
charges.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debentures for any series of Preferred Securities (i) such
series of Preferred Securities will no longer be deemed to be outstanding, (ii)
the depository or its nominee, as the record holder of such series of Preferred
Securities, will receive a registered global certificate or certificates
representing the Corresponding Junior Subordinated Debentures to be delivered
upon such distribution and (iii) any certificates representing such series of
Preferred Securities not held by DTC or its nominee will be deemed to represent
the Corresponding Junior Subordinated Debentures having a principal amount equal
to the stated Liquidation Amount of such series of Preferred Securities, and
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on such series of Preferred Securities until such certificates are
presented to the Administrative Trustees or their agent for transfer or
reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debentures that may be
distributed in exchange for Preferred Securities if a dissolution and
liquidation of an Issuer were to occur. Accordingly, the Preferred Securities
that an investor may purchase, or the Corresponding Junior Subordinated
Debentures that the investor may receive on dissolution and liquidation of an
Issuer, may trade at a discount to the price that the investor paid to purchase
the Preferred Securities offered hereby.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding
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Junior Subordinated Debentures. Redemptions of the Preferred Securities shall be
made and the Redemption Price shall be payable on each Redemption Date only to
the extent that the related Issuer has funds on hand available for the payment
of such Redemption Price. See also "-- Subordination of Common Securities."
If an Issuer gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, the Property Trustee will deposit irrevocably
with DTC funds sufficient to pay the applicable Redemption Price and will give
DTC irrevocable instructions and authority to pay the Redemption Price to the
holders of such Preferred Securities. See "Book-Entry Issuance." If such
Preferred Securities are no longer in book-entry form, the Property Trustee, to
the extent funds are available, will irrevocably deposit with the paying agent
for such Preferred Securities funds sufficient to pay the applicable Redemption
Price and will give such paying agent irrevocable instructions and authority to
pay the Redemption Price to the holders thereof upon surrender of their
certificates evidencing such Preferred Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Preferred Securities called for redemption shall be payable to the holders of
such Preferred Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of such Preferred Securities so called for redemption will cease, except
the right of the holders of such Preferred Securities to receive the Redemption
Price, but without interest on such Redemption Price, and such Preferred
Securities will cease to be outstanding. In the event that any date fixed for
redemption of Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day. In
the event that payment of the Redemption Price in respect of Preferred
Securities called for redemption is improperly withheld or refused and not paid
either by the Issuer or by the Corporation pursuant to the Guarantee as
described under "Description of Guarantees," Distributions on such Preferred
Securities will continue to accrue at the then applicable rate, from the
Redemption Date originally established by the Issuer for such Preferred
Securities to the date such Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), the Corporation or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Junior Subordinated Debentures to holders of
Preferred Securities shall be made to the applicable recordholders thereof as
they appear on the register for such Preferred Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption Date or
liquidation date, as applicable; provided, however, that in the event that any
Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be a date at least 15 days prior to the
Redemption Date or liquidation date, as applicable, as specified in the
applicable Prospectus Supplement.
If less than all of the Preferred Securities and Common Securities issued
by an Issuer are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata to the Preferred Securities and the Common
Securities based upon the relative Liquidation Amounts of such classes. The
particular Preferred Securities to be redeemed shall be selected on a pro rata
basis not more than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Preferred Securities not previously called for redemption,
by such method as the Property Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal to $25 or an
integral multiple of $25 in excess thereof) of the Liquidation Amount of
Preferred
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Securities of a denomination larger than $25. The Property Trustee shall
promptly notify the trust registrar in writing of the Preferred Securities
selected for redemption and, in the case of any Preferred Securities selected
for partial redemption, the Liquidation Amount thereof to be redeemed. For all
purposes of each Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Securities redeemed or to be redeemed only in part, to
the portion of the aggregate Liquidation Amount of Preferred Securities which
has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Issuer's
Preferred Securities and Common Securities, as applicable, shall be made pro
rata based on the Liquidation Amount of such Preferred Securities and Common
Securities; provided, however, that if on any Distribution Date or Redemption
Date a Debenture Event of Default shall have occurred and be continuing, no
payment of any Distribution on, or Redemption Price of, any of the Issuer's
Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all of
the Issuer's outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all of the Issuer's
outstanding Preferred Securities then called for redemption, shall have been
made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions on, or
Redemption Price of, the Issuer's Preferred Securities then due and payable.
In the case of any event of default under the applicable Trust Agreement
resulting from a Debenture Event of Default, the Corporation as holder of such
Issuer's Common Securities will be deemed to have waived any right to act with
respect to any such event of default under the applicable Trust Agreement until
the effect of all such events of default with respect to such Preferred
Securities have been cured, waived or otherwise eliminated. Until all events of
default under the applicable Trust Agreement with respect to the Preferred
Securities have been so cured, waived or otherwise eliminated, the Property
Trustee shall act solely on behalf of the holders of such Preferred Securities
and not on behalf of the Corporation as holder of the Issuer's Common
Securities, and only the holders of such Preferred Securities will have the
right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each Issuer shall automatically terminate
upon expiration of its term and shall terminate on the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Corresponding Junior Subordinated
Debentures to the holders of its Trust Securities, if the Corporation, as
Depositor, has given written direction to the Property Trustee to terminate such
Issuer (subject to the Corporation having received prior approval of the Federal
Reserve if so required under applicable capital guidelines or policies); (iii)
redemption of all of the Issuer's Preferred Securities as described under
-- Redemption or Exchange -- Mandatory Redemption"; and (iv) the entry of an
order for the dissolution of the Issuer by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, the Issuer shall be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of such Issuer as provided by applicable law, to the
holders of such Trust Securities in exchange therefor a Like Amount of the
Corresponding Junior Subordinated Debentures, unless such distribution is
determined by the Property Trustee
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not to be practical, in which event such holders will be entitled to receive out
of the assets of the Issuer available for distribution to holders, after
satisfaction of liabilities to creditors of such Issuer as provided by
applicable law, an amount equal to, in the case of holders of Preferred
Securities, the aggregate of the Liquidation Amount plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because such Issuer has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by such
Issuer on its Preferred Securities shall be paid on a pro rata basis. The
holder(s) of such Issuer's Common Securities will be entitled to receive
distributions upon any such liquidation pro rata with the holders of its
Preferred Securities, except that if a Debenture Event of Default has occurred
and is continuing, the Preferred Securities shall have a priority over the
Common Securities.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under
each Trust Agreement with respect to the Preferred Securities issued thereunder
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the Indenture
(see "Description of Junior Subordinated Debentures -- Debenture Events of
Default"); or
(ii) default by the Property Trustee in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees in such Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees by the holders of at least 25% in aggregate Liquidation
Amount of the outstanding Preferred Securities of the applicable Issuer, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" under such
Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Corporation to
appoint a successor Property Trustee within 90 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of such Issuer's Preferred
Securities, the Administrative Trustees and the Corporation, as Depositor,
unless such Event of Default shall have been cured or waived. The Corporation,
as Depositor, and the Administrative Trustees are required to file annually with
the Property Trustee a certificate as to whether or not they are in compliance
with all the conditions and covenants applicable to them under each Trust
Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities as
described above. See "Subordination of Common Securities" and "-- Liquidation
Distribution Upon Termination." The existence of an Event of Default does not
entitle the holders of Preferred Securities to accelerate the maturity thereof.
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REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Corporation as the holder of the
Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or from time to time, for the purpose of meeting the legal requirements of
the Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Corporation, as the holder of the
Common Securities, and the Administrative Trustees shall have power to appoint
one or more persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of such Trust Property, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Trust Agreement. In case a Debenture
Event of Default has occurred and is continuing, the Property Trustee alone
shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
Person succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee under each Trust Agreement,
provided such Person shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUERS
An Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. An Issuer may, at the request of the Corporation, with the
consent of the Administrative Trustees and without the consent of the holders of
the Preferred Securities, merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, a trust organized as such under the laws of any
State; provided, that (i) such successor entity either (a) expressly assumes all
of the obligations of such Issuer with respect to the Preferred Securities or
(b) substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Preferred
Securities in priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Corporation expressly appoints a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Corresponding Junior Subordinated
Debentures, (iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities are
then listed, if any, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities to be
downgraded by any nationally recognized statistical rating organization which
gives ratings on the Preferred Securities, (v) such merger, consolidation,
amalgamation, replacement, conveyance,
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transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
identical to that of the Issuer, (vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Corporation has
received an opinion from independent counsel to the Issuer experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect, and (b) following such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither the Issuer nor such successor entity will be required to register as an
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and (viii) the Corporation or any permitted successor
or assignee owns all of the Common Securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, an Issuer shall not, except with the consent of holders of 100% in
Liquidation Amount of the Preferred Securities, consolidate, amalgamate, merge
with or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Issuer or the successor entity to be classified as other than a
grantor trust for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "Description of Guarantees -- Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
Each Trust Agreement may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) to cure any ambiguity, correct or
supplement any provisions in such Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under such Trust Agreement, which shall not be inconsistent
with the other provisions of such Trust Agreement, or (ii) to modify, eliminate
or add to any provisions of such Trust Agreement to such extent as shall be
necessary to ensure that the Issuer will be classified for United States federal
income tax purposes as a grantor trust at all times that any Trust Securities
are outstanding or to ensure that the Issuer will not be required to register as
an "investment company" under the Investment Company Act; provided, however,
that in the case of either clause (i) or clause (ii), such action shall not
adversely affect in any material respect the interests of any holder of
Preferred Securities, and any amendments of such Trust Agreement shall become
effective when notice thereof is given to the holders of Trust Securities. Each
Trust Agreement may be amended by the Issuer Trustees and the Corporation with
(i) the consent of holders representing not less than a majority (based upon
Liquidation Amounts) of the outstanding Trust Securities, and (ii) receipt by
the Issuer Trustees of an opinion of counsel to the effect that such amendment
or the exercise of any power granted to the Issuer Trustees in accordance with
such amendment will not affect the Issuer's status as a grantor trust for United
States federal income tax purposes or the Issuer's exemption from status as an
"investment company" under the Investment Company Act, provided that without the
consent of each holder of Trust Securities, such Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Trust Securities as of a specified date or (ii)
restrict the right of a holder of Trust Securities to institute suit for the
enforcement of any such payment on or after such date.
So long as any Corresponding Junior Subordinated Debentures are held by the
Property Trustee, the Issuer Trustees shall not (i) direct the time, method and
place of conducting any
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proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Property Trustee with respect to such
Corresponding Junior Subordinated Debentures, (ii) waive any past default that
is waivable under the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Junior Subordinated Debentures shall
be due and payable or (iv) consent to any amendment, modification or termination
of the Indenture or such Corresponding Junior Subordinated Debentures, where
such consent shall be required, without, in each case, obtaining the prior
approval of the holders of a majority in aggregate Liquidation Amount of all
outstanding Preferred Securities; provided, however, that where a consent under
the Indenture would require the consent of each holder of Corresponding Junior
Subordinated Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior consent of each holder of the corresponding
Preferred Securities. The Issuer Trustees shall not revoke any action previously
authorized or approved by a vote of the holders of the Preferred Securities
except by subsequent vote of the holders of the Preferred Securities. The
Property Trustee shall notify each holder of Preferred Securities of any notice
of default with respect to the Corresponding Junior Subordinated Debentures. In
addition to obtaining the foregoing approvals of the holders of the Preferred
Securities, prior to taking any of the foregoing actions, the Issuer Trustees
shall obtain an opinion of counsel experienced in such matters to the effect
that such action would not cause the Issuer to be classified as other than a
grantor trust for United States federal income tax purposes.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be given
to each holder of record of Preferred Securities in the manner set forth in each
Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for an Issuer to redeem and cancel its Preferred Securities in accordance with
the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustees, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
The Preferred Securities of a series may be issued in whole or in part in
the form of one or more Global Preferred Securities that will be deposited with,
or on behalf of, the Depositary identified in the Prospectus Supplement relating
to such series. Unless otherwise indicated in the applicable Prospectus
Supplement for such series, the Depositary will be DTC. Global Preferred
Securities may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual Preferred Securities represented thereby, a Global Preferred Security
may not be transferred except as a whole by the Depositary for such Global
Preferred Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor.
The specific terms of the depositary arrangement with respect to a series
of Preferred Securities will be described in the Prospectus Supplement relating
to such series. The Corporation anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Preferred Security, and the deposit of such
Global Preferred Security with or on behalf of the Depositary, the Depositary
for such Global Preferred Security or its nominee will credit, on its book-entry
registration and transfer system, the respective aggregate Liquidation Amounts
of the individual Preferred Securities represented by such Global Preferred
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Securities to the accounts of Participants. Such accounts shall be designated by
the dealers, underwriters or agents with respect to such Preferred Securities or
by the Corporation if such Preferred Securities are offered and sold directly by
the Corporation. Ownership of beneficial interests in a Global Preferred
Security will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such Global Preferred
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or its nominee
(with respect to interests of Participants) and the records of Participants
(with respect to interests of persons who hold through Participants). The laws
of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Preferred
Security.
So long as the Depositary for a Global Preferred Security, or its nominee,
is the registered owner of such Global Preferred Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Preferred Securities represented by such Global Preferred Security for all
purposes under the Indenture governing such Preferred Securities. Except as
provided below, owners of beneficial interests in a Global Preferred Security
will not be entitled to have any of the individual Preferred Securities of the
series represented by such Global Preferred Security registered in their names,
will not receive or be entitled to receive physical delivery of any such
Preferred Securities of such series in definitive form and will not be
considered the owners or holders thereof under the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Preferred Securities represented by a Global Preferred Security registered in
the name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Preferred
Security representing such Preferred Securities. None of the Corporation, the
Property Trustee, any Paying Agent, or the Securities Registrar for such
Preferred Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of the Global Preferred Security representing such Preferred
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Corporation expects that the Depositary for a series of Preferred
Securities or its nominee, upon receipt of any payment of Liquidation Amount,
Redemption Price, premium or Distributions in respect of a permanent Global
Preferred Security representing any of such Preferred Securities, immediately
will credit Participants' accounts with payments in amounts proportionate to
their respective beneficial interest in the aggregate Liquidation Amount of such
Global Preferred Security for such Preferred Securities as shown on the records
of such Depositary or its nominee. The Corporation also expects that payments by
Participants to owners of beneficial interests in such Global Preferred Security
held through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Preferred Securities is at any time unwilling, unable
or ineligible to continue as depositary and a successor depositary is not
appointed by the Issuer within 90 days, the Issuer will issue individual
Preferred Securities of such series in exchange for the Global Preferred
Security representing such series of Preferred Securities. In addition, the
Issuer may at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Preferred Securities,
determine not to have any Preferred Securities of such series represented by one
or more Global Preferred Securities and, in such event, will issue individual
Preferred Securities of such series in exchange for the Global Preferred
Security or Securities representing such series of Preferred Securities.
Further, if the Issuer so specifies with respect to the Preferred Securities of
a series, an owner of a beneficial interest in a Global Preferred Security
representing Preferred
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Securities of such series may, on terms acceptable to the Issuer, the Property
Trustee and the Depositary for such Global Preferred Security, receive
individual Preferred Securities of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Preferred Securities. In any such instance, an owner of a
beneficial interest in a Global Preferred Security will be entitled to physical
delivery of individual Preferred Securities of the series represented by such
Global Preferred Security equal in principal amount to such beneficial interest
and to have such Preferred Securities registered in its name. Individual
Preferred Securities of such series so issued will be issued in denominations,
unless otherwise specified by the Issuer, of $25 and integral multiples thereof.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Issuer's Preferred Securities are not
held by the Depositary, such payments shall be made by check mailed to the
address of the holder entitled thereto as such address shall appear on the
Register. Unless otherwise specified in the applicable Prospectus Supplement,
the paying agent (the "Paying Agent") shall initially be the Property Trustee
and any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Corporation. The Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Property Trustee
and the Corporation. In the event that the Property Trustee shall no longer be
the Paying Agent, the Administrative Trustees shall appoint a successor (which
shall be a bank or trust company acceptable to the Administrative Trustees and
the Corporation) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each Issuer, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Issuers will not be required to register or cause to be registered
the transfer of their Preferred Securities after such Preferred Securities have
been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in each Trust Agreement and, after such Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise or
use in the conduct of his or her own affairs. Subject to this provision, the
Property Trustee is under no obligation to exercise any of the powers vested in
it by the applicable Trust Agreement at the request of any holder of Preferred
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
applicable Trust Agreement or is unsure of the application of any provision of
the applicable Trust Agreement, and the matter is not one on which holders of
Preferred Securities are entitled under such Trust Agreement to vote, then the
Property Trustee shall take such action as is directed by the Corporation and if
not so directed, shall take such action as it deems advisable and in the best
interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuers in such a way that no Issuer will be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as other than a grantor trust for
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United States federal income tax purposes and so that the Corresponding Junior
Subordinated Debentures will be treated as indebtedness of the Corporation for
United States federal income tax purposes. In this connection, the Corporation
and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of each Issuer or
each Trust Agreement, that the Corporation and the Administrative Trustees
determine in their discretion to be necessary or desirable for such purposes, as
long as such action does not materially adversely affect the interests of the
holders of the related Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
No Issuer may borrow money or issue debt or mortgage or pledge any of its
assets.
BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for all of the Preferred Securities
and the Junior Subordinated Debentures, unless otherwise referred to in the
Prospectus Supplement relating to an offering of Preferred Securities or Junior
Subordinated Debentures. The Preferred Securities and the Junior Subordinated
Debentures will be issued only as fully-registered securities registered in the
name of Cede & Co. (DTC's nominee). One or more fully-registered global
certificates will be issued for the Preferred Securities of each Issuer and the
Junior Subordinated Debentures, representing in the aggregate the total number
of such Issuer's Preferred Securities or aggregate principal balance of Junior
Subordinated Debentures, respectively, and will be deposited with DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. "Direct Participants" include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its Direct Participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain custodial relationships with Direct
Participants, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the Commission.
Purchases of Preferred Securities or Junior Subordinated Debentures within
the DTC system must be made by or through Direct Participants, which will
receive a credit for the Preferred Securities or Junior Subordinated Debentures
on DTC's records. The ownership interest of each actual purchaser of each
Preferred Security and each Junior Subordinated Debenture ("Beneficial Owner")
is in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchases, but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which the Beneficial
Owners purchased Preferred Securities or Junior Subordinated Debentures.
Transfers of ownership interests in the Preferred Securities or Junior
Subordinated Debentures are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in Preferred
Securities or Junior Subordinated Debentures, except in the event that use of
the book-entry system for the Preferred Securities of such Issuer or Junior
Subordinated Debentures is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities or Junior Subordinated Debentures; DTC's records reflect only the
identity of the Direct Participants to whose
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accounts such Preferred Securities or Junior Subordinated Debentures are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of
the Preferred Securities or Junior Subordinated Debentures. If less than all of
an Issuer's Preferred Securities or the Junior Subordinated Debentures are being
redeemed, DTC's current practice is to determine by lot the amount of the
interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities or the Junior
Subordinated Debentures is limited to the holders of record of the Preferred
Securities or Junior Subordinated Debentures, in those instances in which a vote
is required, neither DTC nor Cede & Co. will itself consent or vote with respect
to Preferred Securities or Junior Subordinated Debentures. Under its usual
procedures, DTC would mail an omnibus proxy (the "Omnibus Proxy") to the
relevant Trustee as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts such Preferred Securities or Junior Subordinated Debentures are
credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Distribution payments on the Preferred Securities or the Junior
Subordinated Debentures will be made by the relevant Trustee to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participant and not of DTC, the relevant Trustee, the Issuer thereof or the
Corporation, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of Distributions to DTC is the responsibility
of the relevant Trustee, disbursement of such payments to Direct Participants is
the responsibility of DTC, and disbursements of such payments to the Beneficial
Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to any of the Preferred Securities or the Junior Subordinated Debentures
at any time by giving reasonable notice to the relevant Trustee and the
Corporation. In the event that a successor securities depositary is not
obtained, definitive Preferred Security or Junior Subordinated Debenture
certificates representing such Preferred Securities or Junior Subordinated
Debentures are required to be printed and delivered. The Corporation, at its
option, may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depositary). After a Debenture Event of Default, the
holders of a majority in liquidation preference of Preferred Securities or
aggregate principal amount of Junior Subordinated Debentures may determine to
discontinue the system of book-entry transfers through DTC. In any such event,
definitive certificates for such Preferred Securities or Junior Subordinated
Debentures will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuers and the Corporation believe to
be accurate, but the Issuers and the Corporation assume no responsibility for
the accuracy thereof. Neither the Issuers nor the Corporation has any
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
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DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by the Corporation concurrently
with the issuance by each Issuer of its Preferred Securities for the benefit of
the holders from time to time of such Preferred Securities. The Bank of New York
will act as indenture trustee ("Guarantee Trustee") under each Guarantee for the
purposes of compliance with the Trust Indenture Act and each Guarantee will be
qualified as an indenture under the Trust Indenture Act. This summary of certain
provisions of the Guarantees, which summarizes the material terms thereof, does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of each Guarantee, including the definitions
therein of certain terms, and the Trust Indenture Act, to each of which
reference is hereby made. The form of the Guarantee has been filed as an exhibit
to the Registration Statement of which this Prospectus forms a part. Reference
in this summary to Preferred Securities means that Issuer's Preferred Securities
to which a Guarantee relates. The Guarantee Trustee will hold each Guarantee for
the benefit of the holders of the related Issuer's Preferred Securities.
GENERAL
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that such Issuer may have or assert
other than the defense of payment. The following payments with respect to the
Preferred Securities, to the extent not paid by or on behalf of the related
Issuer (the "Guarantee Payments"), will be subject to the Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on such Preferred
Securities, to the extent that such Issuer has funds on hand available therefor
at such time, (ii) the Redemption Price with respect to any Preferred Securities
called for redemption, to the extent that such Issuer has funds on hand
available therefor at such time, or (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of such Issuer (unless the Corresponding
Junior Subordinated Debentures are distributed to holders of such Preferred
Securities in exchange therefor), the lesser of (a) the Liquidation Distribution
and (b) the amount of assets of such Issuer remaining available for distribution
to holders of Preferred Securities after satisfaction of liabilities to
creditors of such Issuer as required by applicable law. The Corporation's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Corporation to the holders of the applicable Preferred
Securities or by causing the Issuer to pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
the related Issuer's obligations under the Preferred Securities, but will apply
only to the extent that such related Issuer has funds sufficient to make such
payments, and is not a guarantee of collection.
If the Corporation does not make interest payments on the Corresponding
Junior Subordinated Debentures held by the Issuer, the Issuer will not be able
to pay Distributions on the Preferred Securities and will not have funds legally
available therefor. Each Guarantee will rank subordinate and junior in right of
payment to all Senior Debt of the Corporation. See "-- Status of the
Guarantees." Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise, is subject to the
prior claims of creditors of that subsidiary, except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Corporation's obligations under the Guarantees will be
effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and claimants should look only to the assets of the
Corporation for payments thereunder. See "The Chase Manhattan Corporation."
Except as otherwise provided in the applicable Prospectus Supplement, the
Guarantees do not limit the incurrence or issuance of other secured or unsecured
debt of the Corporation, including Senior Debt, whether under the Indenture, any
other existing indenture or any other indenture that the Corporation may
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enter into in the future or otherwise. See the applicable Prospectus Supplement
relating to any offering of Preferred Securities.
The Corporation has, through the applicable Guarantee, the applicable Trust
Agreement, the applicable series of Corresponding Junior Subordinated Debentures
and the Indenture, taken together, fully, irrevocably and unconditionally
guaranteed all of the Issuer's obligations under the Preferred Securities. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer's obligations under the
Preferred Securities. See "Relationship Among the Preferred Securities, the
Corresponding Junior Subordinated Debentures and the Guarantees."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior Debt of
the Corporation in the same manner as the Junior Subordinated Debentures.
Each Guarantee will rank pari passu with all other Guarantees issued by the
Corporation. Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). Each
Guarantee will be held for the benefit of the holders of the related Preferred
Securities. Each Guarantee will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by the Issuer or upon
distribution to the holders of the Preferred Securities of the Corresponding
Junior Subordinated Debentures. None of the Guarantees places a limitation on
the amount of additional Senior Debt that may be incurred by the Corporation.
The Corporation expects from time to time to incur additional indebtedness
constituting Senior Debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the related Preferred Securities (in which case no vote
will be required), no Guarantee may be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of such
outstanding Preferred Securities. The manner of obtaining any such approval will
be as set forth under "Description of Preferred Securities -- Voting Rights;
Amendment of Each Trust Agreement." All guarantees and agreements contained in
each Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the holders
of the related Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of the
Corporation to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
related Preferred Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under such Guarantee
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
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INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of any Guarantee, undertakes to
perform only such duties as are specifically set forth in each Guarantee and,
after default with respect to any Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by any Guarantee at the
request of any holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related Preferred Securities, upon
full payment of the amounts payable upon liquidation of the related Issuer or
upon distribution of Corresponding Junior Subordinated Debentures to the holders
of the related Preferred Securities in exchange therefor. Each Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of the related Preferred Securities must restore payment of any
sums paid under such Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
TRUST EXPENSES
Pursuant to the Expense Agreement entered into by the Corporation under
each Trust Agreement (the "Expense Agreement"), the Corporation will irrevocably
and unconditionally guarantee to each Person to whom the Issuer becomes indebted
or liable, the full payment of any costs, expenses or liabilities of the Issuer,
other than obligations of the Issuer to pay to the holders of any Preferred
Securities or other similar interests in the Issuer the amounts due such holders
pursuant to the terms of the Preferred Securities or such other similar
interests, as the case may be.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the Issuer has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Corporation as and to the
extent set forth under "Description of Guarantees." Taken together, the
Corporation's obligations under each series of Corresponding Junior Subordinated
Debentures, the Indenture, the related Trust Agreement and the related Guarantee
provide, in the aggregate, a full, irrevocable and unconditional guarantee of
payments of distributions and other amounts due on the Related Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer's obligations under the
Related Preferred Securities. If and to the extent that the Corporation does not
make payments on any series of Corresponding Junior Subordinated Debentures,
such Issuer will not pay Distributions or other amounts due on the Related
Preferred Securities. The Guarantees do not cover payment of Distributions when
the related Issuer does not have sufficient funds to pay such Distributions. In
such event, the remedy of a holder of a series of Preferred
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Securities is to institute a legal proceeding directly against the Corporation
pursuant to the terms of the Indenture for enforcement of payment of amounts
equal to such Distributions to such holder. The obligations of the Corporation
under each Guarantee are subordinate and junior in right of payment to all
Senior Debt of the Corporation.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
each series of Corresponding Junior Subordinated Debentures, such payments will
be sufficient to cover Distributions and other payments due on the Related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debentures will be equal to the
sum of the aggregate stated Liquidation Amount of the Related Preferred
Securities and related Common Securities; (ii) the interest rate and interest
and other payment dates on each series of Corresponding Junior Subordinated
Debentures will match the Distribution rate and Distribution and other payment
dates for the Related Preferred Securities; (iii) the Corporation shall pay for
all and any costs, expenses and liabilities of such Issuer except the Issuer's
obligations to holders of its Preferred Securities under such Preferred
Securities; and (iv) each Trust Agreement further provides that the Issuer will
not engage in any activity that is not consistent with the limited purposes of
such Issuer.
Notwithstanding anything to the contrary in the Indenture, the Corporation
has the right to set-off any payment it is otherwise required to make thereunder
with and to the extent the Corporation has theretofore made, or is concurrently
on the date of such payment making, a payment under the related Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any related Preferred Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the related
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the related Issuer or any other person or entity.
A default or event of default under any Senior Debt of the Corporation
would not constitute a default or Event of Default under the Indenture. However,
in the event of payment defaults under, or acceleration of, Senior Debt of the
Corporation, the subordination provisions of the Indenture provide that no
payments may be made in respect of the Corresponding Junior Subordinated
Debentures until such Senior Debt has been paid in full or any payment default
thereunder has been cured or waived. Failure to make required payments on any
series of Corresponding Junior Subordinated Debentures would constitute an Event
of Default under the Indenture.
LIMITED PURPOSE OF ISSUERS
Each Issuer's Preferred Securities evidence a beneficial interest in such
Issuer, and each Issuer exists for the sole purpose of issuing its Preferred
Securities and Common Securities and investing the proceeds thereof in
Corresponding Junior Subordinated Debentures. A principal difference between the
rights of a holder of a Preferred Security and a holder of a Corresponding
Junior Subordinated Debenture is that a holder of a Corresponding Junior
Subordinated Debenture is entitled to receive from the Corporation the principal
amount of and interest accrued on Corresponding Junior Subordinated Debentures
held, while a holder of Preferred Securities is entitled to receive
Distributions from such Issuer (or from the Corporation under the applicable
Guarantee) if and to the extent such Issuer has funds available for the payment
of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding up or liquidation of
any Issuer involving the liquidation of the Corresponding Junior Subordinated
Debentures, the holders of the related Preferred Securities will be entitled to
receive, out of the assets held by such Issuer, the Liquidation
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Distribution in cash. See "Description of Preferred Securities -- Liquidation
Distribution Upon Termination." Upon any voluntary or involuntary liquidation or
bankruptcy of the Corporation, the Property Trustee, as holder of the
Corresponding Junior Subordinated Debentures, would be a subordinated creditor
of the Corporation, subordinated in right of payment to all Senior Debt as set
forth in the Indenture, but entitled to receive payment in full of principal and
interest, before any stockholders of the Corporation receive payments or
distributions. Since the Corporation is the guarantor under each Guarantee and
has agreed to pay for all costs, expenses and liabilities of each Issuer (other
than the Issuer's obligations to the holders of its Preferred Securities), the
positions of a holder of such Preferred Securities and a holder of such
Corresponding Junior Subordinated Debentures relative to other creditors and to
stockholders of the Corporation in the event of liquidation or bankruptcy of the
Corporation are expected to be substantially the same.
PLAN OF DISTRIBUTION
The Junior Subordinated Debentures or the Preferred Securities may be sold
in a public offering to or through underwriters or dealers designated from time
to time. The Corporation and each Issuer may sell its Junior Subordinated
Debentures or Preferred Securities as soon as practicable after effectiveness of
the Registration Statement of which this Prospectus forms a part. The names of
any underwriters or dealers involved in the sale of the Junior Subordinated
Debentures or Preferred Securities in respect of which this Prospectus is
delivered, the amount or number of Junior Subordinated Debentures and Preferred
Securities to be purchased by any such underwriters and any applicable
commissions or discounts will be set forth in the applicable Prospectus
Supplement.
Underwriters may offer and sell Junior Subordinated Debentures or Preferred
Securities at a fixed price or prices, which may be changed, or from time to
time 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
Preferred Securities, underwriters may be deemed to have received compensation
from the Corporation and/or the applicable Issuer in the form of underwriting
discounts or commissions and may also receive commissions. Underwriters may sell
Junior Subordinated Debentures or Preferred Securities to or through dealers,
and such dealers may receive compensation in the form of discounts, concessions
or commissions from the underwriters.
Any underwriting compensation paid by the Corporation and/or the applicable
Issuer to underwriters in connection with the offering of Junior Subordinated
Debentures or Preferred Securities, and any discounts, concessions or
commissions allowed by such underwriters to participating dealers, will be
described in an accompanying Prospectus Supplement. Underwriters and dealers
participating in the distribution of Junior Subordinated Debentures or Preferred
Securities may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of such Junior
Subordinated Debentures or Preferred Securities may be deemed to be underwriting
discounts and commissions, under the Securities Act. Underwriters and dealers
may be entitled, under agreement with the Corporation and the applicable Issuer,
to indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to reimbursement by the
Corporation for certain expenses.
In connection with the offering of the Preferred Securities of any Issuer,
such Issuer may grant to the underwriters an option to purchase additional
Preferred Securities to cover over-allotments, if any, at the initial public
offering price (with an additional underwriting commission), as may be set forth
in the accompanying Prospectus Supplement. If such Issuer grants any
over-allotment option, the terms of such over-allotment option will be set forth
in the Prospectus Supplement for such Preferred Securities.
Underwriters and dealers may engage in transactions with, or perform
services for, the Corporation and/or the applicable Issuer and/or any of their
affiliates in the ordinary course of business.
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The Junior Subordinated Debentures and the Preferred Securities will be new
issues of securities and will have no established trading market. Any
underwriters to whom Junior Subordinated Debentures or Preferred Securities are
sold for public offering and sale may make a market in such Junior Subordinated
Debentures and Preferred Securities, but such underwriters will not be obligated
to do so and may discontinue any market making at any time without notice. Such
Junior Subordinated Debentures or Preferred Securities may or may not be listed
on a national securities exchange or the Nasdaq National Market. No assurance
can be given as to the liquidity of or the existence of trading markets for any
Junior Subordinated Debentures or Preferred Securities.
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement, certain
legal matters will be passed upon for the Corporation by Simpson Thacher &
Bartlett (a partnership which includes professional corporations), counsel to
the Corporation, and for the Issuers by Richards, Layton & Finger, special
Delaware counsel to the Issuers and the Corporation. The validity of the
Guarantees and the Junior Subordinated Debentures will be passed upon for the
Underwriters by Sullivan & Cromwell. Simpson Thacher & Bartlett and Sullivan &
Cromwell will rely on the opinion of Richards, Layton & Finger as to matters of
Delaware law.
EXPERTS
The consolidated financial statements and schedules of the Corporation and
subsidiaries appearing in the Corporation's 1995 Annual Report to stockholders
set forth in the Current Report on Form 8-K dated April 16, 1996 have been
audited by Price Waterhouse LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements and schedules are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
38
<PAGE> 70
- -------------------------------------------------------
- -------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR BY THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION
SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Risk Factors............................... S-6
Chase Capital I............................ S-11
The Chase Manhattan Corporation............ S-12
Consolidated Ratios of Earnings to Fixed
Charges.................................. S-13
Use of Proceeds............................ S-13
Capitalization............................. S-15
Accounting Treatment....................... S-15
Certain Terms of Series A QUIPS............ S-17
Certain Terms of Series A Subordinated
Debentures............................... S-19
Certain Terms of Series A Guarantee........ S-23
Certain Federal Income Tax Consequences.... S-25
Underwriting............................... S-29
Validity of Securities..................... S-30
PROSPECTUS
Available Information...................... 3
Incorporation of Certain Documents by
Reference................................ 4
The Chase Manhattan Corporation............ 5
The Issuers................................ 5
Use of Proceeds............................ 6
Description of Junior Subordinated
Debentures............................... 6
Description of Preferred Securities........ 18
Book-Entry Issuance........................ 31
Description of Guarantees.................. 33
Relationship Among the Preferred
Securities, the Corresponding Junior
Subordinated Debentures and the
Guarantees............................... 35
Plan of Distribution....................... 37
Validity of Securities..................... 38
Experts.................................... 38
</TABLE>
-------------------------------------------------------
-------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
PREFERRED SECURITIES
CHASE CAPITAL I
% CUMULATIVE QUARTERLY INCOME
PREFERRED SECURITIES,
SERIES A (QUIPS(SM))
FULLY AND UNCONDITIONALLY GUARANTEED,
AS DESCRIBED HEREIN, BY
THE CHASE MANHATTAN CORPORATION
------------------------
LOGO
------------------------
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
REPRESENTATIVES OF THE UNDERWRITERS
, 1996
-------------------------------------------------------
-------------------------------------------------------
<PAGE> 71
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration fee under the Securities Act of 1933, as amended......... $ *
Blue Sky fees and expenses (including counsel fees)................... *
Fees of rating agencies............................................... *
Trustees' fees and expenses........................................... *
Printing and engraving................................................ *
Accounting services................................................... *
Legal fees of Registrant's counsel.................................... *
Miscellaneous......................................................... *
----------
Total....................................................... $ *
==========
</TABLE>
- ---------------
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to the Delaware General Corporation Law (the "DGCL"), a
corporation may indemnify any person in connection with any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than a derivative action by or in the right of such
corporation) who is or was a director, officer, employee or agent of such
corporation, or serving at the request of such corporation in such capacity for
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding, if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of such
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
The DGCL also permits indemnification by a corporation under similar
circumstances for expenses (including attorneys' fees) actually and reasonably
incurred by such persons in connection with the defense or settlement of a
derivative action, except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable to such corporation unless the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that such
person is fairly and reasonably entitled to indemnity for such expenses which
such court shall deem proper.
The DGCL provides that the indemnification described above shall not be
deemed exclusive of other indemnification that may be granted by a corporation
pursuant to its By-laws, disinterested directors' vote, stockholders' vote,
agreement or otherwise.
The DGCL also provides corporations with the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
in a similar capacity for another corporation, partnership, joint venture, trust
or other enterprise against any liability asserted against him or her in any
such capacity, or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify him or her against such liability
as described above.
The Restated Certificate of Incorporation of the Corporation provides that,
to the fullest extent that the DGCL as from time to time in effect permits the
limitation or elimination of the liability of directors, no director of the
Corporation shall be personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director.
II-1
<PAGE> 72
The Corporation's Restated Certificate of Incorporation empowers the
Corporation to indemnify any director, officer, employee or agent of the
Corporation or any other person who is serving at the Corporation's request in
any such capacity with another corporation, partnership, joint venture, trust or
other enterprise (including, without limitation, an employee benefit plan) to
the fullest extent permitted under the DGCL as from time to time in effect, and
any such indemnification may continue as to any person who has ceased to be a
director, officer, employee or agent and may inure to the benefit of the heirs,
executors and administrators of such a person.
The Corporation's Restated Certificate of Incorporation also empowers the
Corporation by action of its Board of Directors, notwithstanding any interest of
the directors in the action, to purchase and maintain insurance in such amounts
as the Board of Directors deems appropriate to protect any director, officer,
employee or agent of the Corporation or any other person who is serving at the
Corporation's request in any such capacity with another corporation,
partnership, joint venture, trust or other enterprise (including, without
limitation, an employee benefit plan) against any liability asserted against him
or incurred by him in any such capacity arising out of his status as such
including, without limitation, expenses, judgments, fines (including any excise
taxes assessed on a person with respect to any employee benefit plan) and
amounts paid in settlement) to the fullest extent permitted under the DGCL as
from time to time in effect, whether or not the Corporation would have the power
or be required to indemnify any such individual under the terms of any agreement
or by-law or the DGCL.
In addition, the Corporation's By-laws require indemnification to the
fullest extent permitted under applicable law, as from time to time in effect.
The By-laws provide a clear and unconditional right to indemnification for
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by any person in connection with any
threatened, pending or completed investigation, claim, action, suit or
proceeding, whether civil, administrative or investigative (including, to the
extent permitted by law, any derivative action) by reason of the fact that such
person is or was serving as a director, officer, employee or agent of the
Corporation or, at the request of the Corporation, of another corporation,
partnership, joint venture, trust or other enterprise (including, without
limitation, an employee benefit plan). The By-laws specify that the right
indemnification so provided is a contract right, set forth certain procedural
and evidentiary standards applicable to the enforcement of a claim under the
By-laws, entitle the persons to be indemnified to be reimbursed for the expenses
of prosecuting any such claim against the Corporation and entitle them to have
all expenses incurred in advance of the final disposition of a proceeding paid
by the Corporation. Such provisions, however, are intended to be in furtherance
and not in limitation of the general right to indemnification provided in the
By-laws, which right of indemnification and of advancement of expenses is not
exclusive.
The Corporation's By-laws also provide that the Corporation may enter into
contracts with any director, officer, employee or agent of the Corporation in
furtherance of the indemnification provisions in the By-laws, as well as create
a trust fund, grant a security interest or use other means (including, without
limitation, a letter of credit) to ensure payment of amounts indemnified.
Reference is made to the Underwriting Agreement, the form of which is filed
as Exhibit 1 to this Registration Statement.
Under the Trust Agreement, the Corporation will agree to indemnify each of
the Trustees of the Issuer or any predecessor Trustee for the Issuer, and to
hold the Trustee harmless against, any loss, damage, claims, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the Trust Agreements,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties under the Trust Agreements.
II-2
<PAGE> 73
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
1 Form of Underwriting Agreement.*
4.1 Restated Certificate of Incorporation of the Corporation, as amended (incorporated
by reference to Exhibit 4.1 to the Corporation's Registration Statement on Form
S-8, dated July 11, 1996, File No. 333-07941).
</TABLE>
<TABLE>
<C> <S>
4.2 By-laws, as amended (incorporated by reference to Exhibit 3.2 of the Corporation's
Annual Report on Form 10-K, for the year ended December 31, 1993, File No. 1-5805).
4.3 Indenture dated as of December 1, 1989 between Chemical Banking Corporation and The
Chase Manhattan Bank (National Association) as succeeded to by Bankers Trust
Company, as Trustee, (incorporated by reference to Exhibit 4.9 to the Registration
Statement on Form S-3 (File No. 33-32409) of Chemical Banking Corporation).
4.4 Indenture dated as of April 1, 1987, as amended and restated as of December 15,
1992, between Chemical Banking Corporation and Morgan Guaranty Trust Company of New
York, as succeeded to by First Trust of New York, National Association, as Trustee,
(incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K dated
December 22, 1992 of Chemical Banking Corporation, File No. 1-5805).
4.5 Second Supplemental Indenture dated as of October 8, 1996, between The Chase
Manhattan Corporation and First Trust of New York, National Association to the
Indenture dated as of April 1, 1987, as amended and restated as of December 15,
1992.**
4.6 Indenture dated as of June 1, 1982 between Manufacturers Hanover Corporation and
Morgan Guaranty Trust Company of New York, as succeeded to by First Trust of New
York (National Association), as Trustee, (incorporated by reference to Exhibit 4(a)
to the Registration Statement on Form S-3 (File No. 2-82433) of Manufacturers
Hanover Corporation).
4.7 First Supplemental Indenture dated as of January 15, 1986 to the Indenture dated as
of June 1, 1982 between Manufacturers Hanover Corporation and Morgan Guaranty Trust
Company of New York, as succeeded to by First Trust of New York, National
Association, as Trustee, (incorporated by reference to Exhibit 1 to the Current
Report on Form 8-K dated as of January 29, 1986 of Manufacturers Hanover
Corporation, File No. 1-5923-1).
4.8 Second Supplemental Indenture dated as of March 13, 1991 to the Indenture dated as
of June 1, 1982 between Manufacturers Hanover Corporation and Morgan Guaranty Trust
Company of New York, as succeeded to by First Trust of New York, National
Association, as Trustee, (incorporated by reference to Exhibit 4 to the Current
Report on Form 8-K dated March 19, 1991 of Manufacturers Hanover Corporation, File
No. 1-5923-1).
4.9 Third Supplemental Indenture dated as of December 31, 1991 among Chemical Banking
Corporation, Manufacturers Hanover Corporation and Morgan Guaranty Trust Company of
New York, as succeeded to by First Trust of New York, National Association, as
Trustee, to the Indenture dated as of June 1, 1982 (incorporated by reference to
Exhibit 4.14(d) of the Annual Report on Form 10-K dated December 31, 1991 of
Chemical Banking Corporation, File No. 1-5805).
4.10 Indenture dated as of June 1, 1985 between Manufacturers Hanover Corporation and
IBJ Schroder Bank and Trust Company, as Trustee, (incorporated by reference to
Exhibit 4 (b) to the Current Report on Form 8-K dated February 27, 1987 of
Manufacturers Hanover Corporation, File No. 1-5923-1).
</TABLE>
II-3
<PAGE> 74
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
4.11 First Supplemental Indenture dated as of December 31, 1991 among Chemical Banking
Corporation, Manufacturers Hanover Corporation and IBJ Schroder Bank and Trust
Company to the Indenture dated June 1, 1985 (incorporated by reference to Exhibit
4.18(b) to the Annual Report on Form 10-K dated December 31, 1991 of Chemical
Banking Corporation, 1-5805).
4.12 Second Supplemental Indenture dated as of October 8, 1996, between The Chase
Manhattan Corporation and IBJ Schroder Bank and Trust Company.**
4.13 Indenture dated as of May 15, 1993 between Margaretten Financial Corporation and
The Bank of New York, as Trustee, relating to the 6 3/4% Guaranteed Notes due June
15, 2000 (incorporated by reference to Exhibit 4(a) to the Registration Statement
on Form S-3 (No. 33-60262) of Margaretten Financial Corporation).
4.14 Supplemental Indenture dated as of July 22, 1994 to the Indenture dated as of May
15, 1993 among Margaretten Financial Corporation, Chemical Banking Corporation and
The Bank of New York, as Trustee, and Guarantee dated as of July 22, 1994 by
Chemical Banking Corporation (incorporated by reference to Exhibit 4.34 to the
Current Report on Form 8-K dated September 28, 1994 of Chemical Banking
Corporation, File No. 1-5805).
4.15 Indenture dated as of July 1, 1986 between The Chase Manhattan Corporation and
Bankers Trust Company, as Trustee, (incorporated by reference to Exhibit (4)(a) to
the Registration Statement on Form S-3 (File No. 33-7299) of The Chase Manhattan
Corporation).
4.16 First Supplemental Indenture dated as of November 1, 1990 between The Chase
Manhattan Corporation and Bankers Trust Company, as Trustee to the Indenture dated
as of July 1, 1986 (incorporated by reference to Exhibit (4)(b) to the Registration
Statement on Form S-3 (File No. 33-40485) of The Chase Manhattan Corporation).
4.17 Second Supplemental Indenture dated as of May 1, 1991 between The Chase Manhattan
Corporation and Bankers Trust Company, as Trustee to the Indenture dated as of July
1, 1986 (incorporated by reference to Exhibit (4)(c) to the Registration Statement
on Form S-3 (File No. 33-42367) of The Chase Manhattan Corporation).
4.18 Third Supplemental Indenture dated as of March 29, 1996 among Chemical Banking
Corporation, The Chase Manhattan Corporation and Bankers Trust Company, as Trustee
to the Indenture dated as of July 1, 1986.**
4.19 Indenture dated as of August 1, 1974 between The Chase Manhattan Corporation and
Bankers Trust Company, as Trustee, (incorporated by reference to Exhibit 2(b) to
the Registration Statement on Form S-7 (File No. 2-51538) of The Chase Manhattan
Corporation).
4.20 First Supplemental Indenture dated as of March 29, 1996 among Chemical Banking
Corporation, The Chase Manhattan Corporation and Bankers Trust Company, as Trustee
to the Indenture dated as of August 1, 1974.**
4.21 Amended and Restated Indenture dated as of September 1, 1993 between The Chase
Manhattan Corporation and Chemical Bank, as Trustee (incorporated by reference to
Exhibit (4)(cc) to the Current Report on Form 8-K dated August 19, 1993 (File No.
1-5945) of The Chase Manhattan Corporation).
4.22 First Supplemental Indenture dated as of March 29, 1996 among Chemical Banking
Corporation, The Chase Manhattan Corporation, Chemical Bank, as resigning Trustee,
and First Trust of New York, National Association, as successor Trustee to the
Amended and Restated Indenture dated as of September 1, 1993.**
</TABLE>
II-4
<PAGE> 75
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
4.23 Second Supplemental Indenture dated as of October 8, 1996, between The Chase
Manhattan Corporation and First Trust of New York, National Association to the
Amended and Restated Indenture dated as of September 1, 1993.**
4.24 Form of Junior Subordinated Indenture, to be dated as of , 1996,
between the Corporation and The Bank of New York, as Debenture Trustee.**
4.25 Restated Certificate of Trust of Chase Capital I.**
4.26 Trust Agreement of Chase Capital I.**
4.27 Restated Certificate of Trust of Chase Capital II.**
4.28 Trust Agreement of Chase Capital II.**
4.29 Restated Certificate of Trust of Chase Capital III.**
4.30 Trust Agreement of Chase III.**
4.31 Form of Amended and Restated Trust Agreement of Chase Capital I.**
4.32 Form of Amended and Restated Trust Agreement of Chase Capital II.*
4.33 Form of Amended and Restated Trust Agreement of Chase Capital III.*
4.34 Form of Preferred Security Certificate for Chase Capital I (included as Exhibit D
of Exhibit 4.31).
4.35 Form of Preferred Security Certificate for Chase Capital II (included as Exhibit D
of Exhibit 4.32).*
4.36 Form of Preferred Security Certificate for Chase Capital III (included as Exhibit D
of Exhibit 4.33).*
4.37 Form of Guarantee Agreement for Chase Capital I.**
4.38 Form of Guarantee Agreement for Chase Capital II.*
4.39 Form of Guarantee Agreement for Chase Capital III.*
5.1 Opinion of counsel as to legality of the Junior Subordinated Debentures and the
Guarantees to be issued by the Corporation.
5.2 Opinion of special Delaware counsel as to legality of the Preferred Securities to
be issued by Chase Capital I, Chase Capital II and Chase Capital III.**
8 Opinion of counsel as to certain federal income tax matters.
12.1 Computation of ratio of earnings to fixed charges (incorporated by reference to
Exhibit 12(a) to the Quarterly Report on Form 10-Q for the Quarter Ended September
30, 1996 of The Chase Manhattan Corporation (File No. 1-5805)).
12.2 Computation of ratio of earnings to fixed charges and preferred stock dividend
requirements (incorporated by reference to Exhibit 12(b) to the Quarterly Report on
Form 10-Q for the Quarter Ended September 30, 1996 of The Chase Manhattan
Corporation (File No. 1-5805)).
23.1 Consents of auditors.
23.2 Consent of Counsel to the Corporation. (included in Exhibit 5.1).
23.3 Consent of Special Delaware Counsel (included in Exhibit 5.2).**
24 Powers of Attorney.**
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under
the Junior Subordinated Indenture.**
</TABLE>
II-5
<PAGE> 76
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under
the Amended and Restated Trust Agreement of Chase Capital I.**
25.3 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under
the Amended and Restated Trust Agreement of Chase Capital II.**
25.4 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under
the Amended and Restated Trust Agreement of Chase Capital III.**
25.5 Form T-1 Statement of Eligibility of The Bank of New York under the Guarantee for
the benefit of the holders of Preferred Securities of Chase Capital I.**
25.6 Form T-1 Statement of Eligibility of The Bank of New York under the Guarantee for
the benefit of the holders of Preferred Securities of Chase Capital II.**
25.7 Form T-1 Statement of Eligibility of The Bank of New York under the Guarantee for
the benefit of the holders of Preferred Securities of Chase Capital III.**
</TABLE>
- ---------------
* To be filed by amendment.
** Previously filed.
ITEM 17. UNDERTAKINGS.
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of each
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, each Registrant has been advised that in the opinion of the
Securities and Exchange Commission 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
each Registrant of expenses incurred or paid by a director, officer or
controlling person of each Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, each Registrant will, unless
in the opinion of its counsel the matter has been settled by the 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.
Each of the undersigned Registrants hereby also undertakes:
(1) to file, during any period in which offers or sales are being made, 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;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereto) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in 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%
II-6
<PAGE> 77
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) 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 a Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) that, for the purpose of determining any liability under the Securities
Act of 1933, 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.
(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.
(4) to provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and registered in such
names as required by the underwriter to permit prompt delivery to each
purchaser.
(5) That, for the purposes of determining any liability under the
Securities Act of 1933:
(i) The information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
the form of prospectus filed by the Registrants pursuant to Rule 424(b)(1)
or (4) or 487(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
(ii) 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.
II-7
<PAGE> 78
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in The City of New York, State of New York, on the
25th day of November, 1996.
THE CHASE MANHATTAN CORPORATION
By: ANTHONY J. HORAN
------------------------------------
Corporate Secretary
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------- ----------------------------------- -------------------
<S> <C> <C>
* Chairman of the Board, Chief November 25, 1996
- ------------------------------- Executive Officer and Director
Walter V. Shipley (Principal Executive Officer)
* President, Chief Operating Officer November 25, 1996
- ------------------------------- and Director
Thomas G. Labrecque
* Senior Vice Chairman of the Board November 25, 1996
- ------------------------------- and Director
Edward D. Miller
* Vice Chairman of the Board and November 25, 1996
- ------------------------------- Director
William B. Harrison, Jr.
* Director November 25, 1996
- -------------------------------
Frank A. Bennack, Jr.
* Director November 25, 1996
- -------------------------------
Susan V. Berresford
* Director November 25, 1996
- -------------------------------
M. Anthony Burns
* Director November 25, 1996
- -------------------------------
H. Laurance Fuller
* Director November 25, 1996
- -------------------------------
Melvin R. Goodes
</TABLE>
II-8
<PAGE> 79
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------- ----------------------------------- -----------------
<S> <C> <C>
* Director November 25, 1996
- -------------------------------
William H. Gray III
Director November 25, 1996
- -------------------------------
George V. Grune
* Director November 25, 1996
- -------------------------------
Harold S. Hook
* Director November 25, 1996
- -------------------------------
Helene L. Kaplan
* Director November 25, 1996
- -------------------------------
J. Bruce Llewellyn
* Director November 25, 1996
- -------------------------------
Edmund T. Pratt, Jr.
* Director November 25, 1996
- -------------------------------
Henry B. Schacht
* Director November 25, 1996
- -------------------------------
Andrew C. Sigler
* Director November 25, 1996
- -------------------------------
John R. Stafford
* Director November 25, 1996
- -------------------------------
Marina v.N. Whitman
* Chief Financial Officer November 25, 1996
- ------------------------------- (Principal Financial Officer)
Peter J. Tobin
* Controller November 25, 1996
- ------------------------------- (Principal Accounting Officer)
Joseph L. Sclafani
</TABLE>
- ---------------
* Anthony J. Horan hereby signs this Amendment to the Registration Statement on
Form S-3 on November 25, 1996 on behalf of each of the indicated persons for
whom he is attorney-in-fact pursuant to a power of attorney filed herein.
By: /s/ Anthony J. Horan
-------------------------------
Anthony J. Horan
Corporate Secretary
II-9
<PAGE> 80
Pursuant to the requirements of the Securities Act of 1933, Chase Capital I
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, and State of New York on the 25th day
of November, 1996.
CHASE CAPITAL I
By: The Chase Manhattan Corporation,
as Depositor
By: Peter J. Tobin
--------------------------------------
Pursuant to the requirements of the Securities Act of 1933, Chase Capital
II certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, and State of New York on the 25th day
of November, 1996.
CHASE CAPITAL II
By: The Chase Manhattan Corporation,
as Depositor
By: Peter J. Tobin
--------------------------------------
Pursuant to the requirements of the Securities Act of 1933, Chase Capital
III certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, and State of New York on the 25th day
of November, 1996.
CHASE CAPITAL III
By: The Chase Manhattan Corporation,
as Depositor
By: Peter J. Tobin
--------------------------------------
II-10
<PAGE> 81
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
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<C> <S>
1 Form of Underwriting Agreement.*
4.1 Restated Certificate of Incorporation of the Corporation, as amended (incorporated
by reference to Exhibit 4.1 to the Corporation's Registration Statement on Form
S-8, dated July 11, 1996, File No. 333-07941).
</TABLE>
<TABLE>
<C> <S>
4.2 By-laws, as amended (incorporated by reference to Exhibit 3.2 of the Corporation's
Annual Report on Form 10-K, for the year ended December 31, 1993, File No. 1-5805).
4.3 Indenture dated as of December 1, 1989 between Chemical Banking Corporation and The
Chase Manhattan Bank (National Association) as succeeded to by Bankers Trust
Company, as Trustee, (incorporated by reference to Exhibit 4.9 to the Registration
Statement on Form S-3 (File No. 33-32409) of Chemical Banking Corporation).
4.4 Indenture dated as of April 1, 1987, as amended and restated as of December 15,
1992, between Chemical Banking Corporation and Morgan Guaranty Trust Company of New
York, as succeeded to by First Trust of New York, National Association, as Trustee,
(incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K dated
December 22, 1992 of Chemical Banking Corporation, File No. 1-5805).
4.5 Second Supplemental Indenture dated as of October 8, 1996, between The Chase
Manhattan Corporation and First Trust of New York, National Association to the
Indenture dated as of April 1, 1987, as amended and restated as of December 15,
1992.**
4.6 Indenture dated as of June 1, 1982 between Manufacturers Hanover Corporation and
Morgan Guaranty Trust Company of New York, as succeeded to by First Trust of New
York (National Association), as Trustee, (incorporated by reference to Exhibit 4(a)
to the Registration Statement on Form S-3 (File No. 2-82433) of Manufacturers
Hanover Corporation).
4.7 First Supplemental Indenture dated as of January 15, 1986 to the Indenture dated as
of June 1, 1982 between Manufacturers Hanover Corporation and Morgan Guaranty Trust
Company of New York, as succeeded to by First Trust of New York, National
Association, as Trustee, (incorporated by reference to Exhibit 1 to the Current
Report on Form 8-K dated as of January 29, 1986 of Manufacturers Hanover
Corporation, File No. 1-5923-1).
4.8 Second Supplemental Indenture dated as of March 13, 1991 to the Indenture dated as
of June 1, 1982 between Manufacturers Hanover Corporation and Morgan Guaranty Trust
Company of New York, as succeeded to by First Trust of New York, National
Association, as Trustee, (incorporated by reference to Exhibit 4 to the Current
Report on Form 8-K dated March 19, 1991 of Manufacturers Hanover Corporation, File
No. 1-5923-1).
4.9 Third Supplemental Indenture dated as of December 31, 1991 among Chemical Banking
Corporation, Manufacturers Hanover Corporation and Morgan Guaranty Trust Company of
New York, as succeeded to by First Trust of New York, National Association, as
Trustee, to the Indenture dated as of June 1, 1982 (incorporated by reference to
Exhibit 4.14(d) of the Annual Report on Form 10-K dated December 31, 1991 of
Chemical Banking Corporation, File No. 1-5805).
4.10 Indenture dated as of June 1, 1985 between Manufacturers Hanover Corporation and
IBJ Schroder Bank and Trust Company, as Trustee, (incorporated by reference to
Exhibit 4 (b) to the Current Report on Form 8-K dated February 27, 1987 of
Manufacturers Hanover Corporation, File No. 1-5923-1).
</TABLE>
<PAGE> 82
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
4.11 First Supplemental Indenture dated as of December 31, 1991 among Chemical Banking
Corporation, Manufacturers Hanover Corporation and IBJ Schroder Bank and Trust
Company to the Indenture dated June 1, 1985 (incorporated by reference to Exhibit
4.18(b) to the Annual Report on Form 10-K dated December 31, 1991 of Chemical
Banking Corporation, 1-5805).
4.12 Second Supplemental Indenture dated as of October 8, 1996, between The Chase
Manhattan Corporation and IBJ Schroder Bank and Trust Company.**
4.13 Indenture dated as of May 15, 1993 between Margaretten Financial Corporation and
The Bank of New York, as Trustee, relating to the 6 3/4% Guaranteed Notes due June
15, 2000 (incorporated by reference to Exhibit 4(a) to the Registration Statement
on Form S-3 (No. 33-60262) of Margaretten Financial Corporation).
4.14 Supplemental Indenture dated as of July 22, 1994 to the Indenture dated as of May
15, 1993 among Margaretten Financial Corporation, Chemical Banking Corporation and
The Bank of New York, as Trustee, and Guarantee dated as of July 22, 1994 by
Chemical Banking Corporation (incorporated by reference to Exhibit 4.34 to the
Current Report on Form 8-K dated September 28, 1994 of Chemical Banking
Corporation, File No. 1-5805).
4.15 Indenture dated as of July 1, 1986 between The Chase Manhattan Corporation and
Bankers Trust Company, as Trustee, (incorporated by reference to Exhibit (4)(a) to
the Registration Statement on Form S-3 (File No. 33-7299) of The Chase Manhattan
Corporation).
4.16 First Supplemental Indenture dated as of November 1, 1990 between The Chase
Manhattan Corporation and Bankers Trust Company, as Trustee to the Indenture dated
as of July 1, 1986 (incorporated by reference to Exhibit (4)(b) to the Registration
Statement on Form S-3 (File No. 33-40485) of The Chase Manhattan Corporation).
4.17 Second Supplemental Indenture dated as of May 1, 1991 between The Chase Manhattan
Corporation and Bankers Trust Company, as Trustee to the Indenture dated as of July
1, 1986 (incorporated by reference to Exhibit (4)(c) to the Registration Statement
on Form S-3 (File No. 33-42367) of The Chase Manhattan Corporation).
4.18 Third Supplemental Indenture dated as of March 29, 1996 among Chemical Banking
Corporation, The Chase Manhattan Corporation and Bankers Trust Company, as Trustee
to the Indenture dated as of July 1, 1986.**
4.19 Indenture dated as of August 1, 1974 between The Chase Manhattan Corporation and
Bankers Trust Company, as Trustee, (incorporated by reference to Exhibit 2(b) to
the Registration Statement on Form S-7 (File No. 2-51538) of The Chase Manhattan
Corporation).
4.20 First Supplemental Indenture dated as of March 29, 1996 among Chemical Banking
Corporation, The Chase Manhattan Corporation and Bankers Trust Company, as Trustee
to the Indenture dated as of August 1, 1974.**
4.21 Amended and Restated Indenture dated as of September 1, 1993 between The Chase
Manhattan Corporation and Chemical Bank, as Trustee (incorporated by reference to
Exhibit (4)(cc) to the Current Report on Form 8-K dated August 19, 1993 (File No.
1-5945) of The Chase Manhattan Corporation).
4.22 First Supplemental Indenture dated as of March 29, 1996 among Chemical Banking
Corporation, The Chase Manhattan Corporation, Chemical Bank, as resigning Trustee,
and First Trust of New York, National Association, as successor Trustee to the
Amended and Restated Indenture dated as of September 1, 1993.**
</TABLE>
<PAGE> 83
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
4.23 Second Supplemental Indenture dated as of October 8, 1996, between The Chase
Manhattan Corporation and First Trust of New York, National Association to the
Amended and Restated Indenture dated as of September 1, 1993.**
4.24 Form of Junior Subordinated Indenture, to be dated as of , 1996,
between the Corporation and The Bank of New York, as Debenture Trustee.**
4.25 Restated Certificate of Trust of Chase Capital I.**
4.26 Trust Agreement of Chase Capital I.**
4.27 Restated Certificate of Trust of Chase Capital II.**
4.28 Trust Agreement of Chase Capital II.**
4.29 Restated Certificate of Trust of Chase Capital III.**
4.30 Trust Agreement of Chase III.**
4.31 Form of Amended and Restated Trust Agreement of Chase Capital I.**
4.32 Form of Amended and Restated Trust Agreement of Chase Capital II.*
4.33 Form of Amended and Restated Trust Agreement of Chase Capital III.*
4.34 Form of Preferred Security Certificate for Chase Capital I (included as Exhibit D
of Exhibit 4.31).**
4.35 Form of Preferred Security Certificate for Chase Capital II (included as Exhibit D
of Exhibit 4.32).*
4.36 Form of Preferred Security Certificate for Chase Capital III (included as Exhibit D
of Exhibit 4.33).*
4.37 Form of Guarantee Agreement for Chase Capital I.**
4.38 Form of Guarantee Agreement for Chase Capital II.*
4.39 Form of Guarantee Agreement for Chase Capital III.*
5.1 Opinion of counsel as to the legality of the Junior Subordinated Debentures and the
Guarantees to be issued by the Corporation.
5.2 Opinion of special Delaware counsel as to legality of the Preferred Securities to
be issued by Chase Capital I, Chase Capital II and Chase Capital III.**
8 Opinion of counsel as to certain federal income tax matters.
12.1 Computation of ratio of earnings to fixed charges (incorporated by reference to
Exhibit 12(a) to the Quarterly Report on Form 10-Q for the Quarter Ended September
30, 1996 of The Chase Manhattan Corporation (File No. 1-5805)).
12.2 Computation of ratio of earnings to fixed charges and preferred stock dividend
requirements (incorporated by reference to Exhibit 12(b) to the Quarterly Report on
Form 10-Q for the Quarter Ended September 30, 1996 of The Chase Manhattan
Corporation (File No. 1-5805)).
23.1 Consents of auditors.
23.2 Consent of Counsel to the Corporation (included in Exhibit 5.1).*
23.3 Consent of Special Delaware Counsel (included in Exhibit 5.2).**
24 Powers of Attorney.**
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under
the Junior Subordinated Indenture.**
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under
the Amended and Restated Trust Agreement of Chase Capital I.**
</TABLE>
<PAGE> 84
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
25.3 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under
the Amended and Restated Trust Agreement of Chase Capital II.**
25.4 Form T-1 Statement of Eligibility of The Bank of New York to act as trustee under
the Amended and Restated Trust Agreement of Chase Capital III.**
25.5 Form T-1 Statement of Eligibility of The Bank of New York under the Guarantee for
the benefit of the holders of Preferred Securities of Chase Capital I.**
25.6 Form T-1 Statement of Eligibility of The Bank of New York under the Guarantee for
the benefit of the holders of Preferred Securities of Chase Capital II.**
25.7 Form T-1 Statement of Eligibility of The Bank of New York under the Guarantee for
the benefit of the holders of Preferred Securities of Chase Capital III.**
</TABLE>
- ---------------
* To be filed by amendment.
** Previously filed.
<PAGE> 1
Exhibit 5.1
November 25, 1996
The Chase Manhattan Corporation
270 Park Avenue
New York, NY 10017
Ladies and Gentlemen:
This opinion is delivered in connection with Amendment No. 4 to the
Registration Statement on Form S-3 (the "Registration Statement") filed under
the Securities Act of 1933, as amended (the "Act"), by The Chase Manhattan
Corporation, a Delaware corporation ("Chase"), and Chase Capital I, Chase
Capital II and Chase Capital III, each a Delaware business trust (the "Trusts",
and together with Chase, the "Registrants"), which Registration Statement
relates to (i) preferred securities representing beneficial ownership interests
in such Trusts (the "Preferred Securities"), (ii) junior subordinated deferrable
interest debentures (the "Debentures") to be issued by Chase and (iii)
unconditional and irrevocable guarantees (the "Guarantees" and each a
"Guarantee") of the obligations of the Trusts under the Preferred Securities
that may be issued by Chase.
<PAGE> 2
The Chase Manhattan Corporation -2- November 25, 1996
We have examined (i) the Registration Statement, (ii) the form of
Junior Subordinated Indenture (an "Indenture") between Chase and The Bank of
New York, as Debenture Trustee (the "Debenture Trustee"), as filed as an
exhibit to the Registration Statement, pursuant to which the Debentures, are to
be issued and (iii) the forms of Guarantee Agreement (the "Guarantee
Agreements" and each a "Guarantee Agreement") to be executed by Chase and The
Bank of New York, as Guarantee Trustee (the "Guarantee Trustee"), as filed as
an exhibit to the Registration Statement. In addition, we have examined, and
have relied as to matters of fact upon, originals or copies, certified or
otherwise identified to our satisfaction, of such corporate records,
agreements, documents and other instruments and such certificates or
comparable documents of public officials and of officers and representatives
of Chase, and have made such other and further investigations, as we have
deemed relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents. We have also assumed
that the Registration Statement, and any applicable amendments thereto
(including post-effective amendments), will have become effective under the Act
at the time of issuance, offering and sale of any such Preferred Securities,
Debentures or Guarantees.
<PAGE> 3
The Chase Manhattan Corporation -3- November 25, 1996
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. With respect to the Debentures to be issued under an
Indenture, when (i) such Indenture has been duly authorized and validly
executed and delivered by Chase and by the Debenture Trustee, (ii) the
Board of Directors of Chase (the "Board") has taken all necessary
corporate action to approve the issuance and specific terms of such
Debentures, and (iii) such Debentures have been duly executed,
authenticated, issued and delivered in accordance with the provisions of
such Indenture upon payment of the consideration therefor as contemplated
by the Registration Statement, such Debentures will constitute valid and
legally binding obligations of Chase, enforceable against Chase in
accordance with their terms.
2. With respect to the Guarantee to be issued under each
Guarantee Agreement, when (i) such Guarantee Agreement has been duly
authorized and validly executed and delivered by Chase and by the
Guarantee Trustee, (ii) the Board has taken all necessary corporate action
to approve the issuance and specific terms of such Guarantee and (iii)
such Guarantee, has been duly executed, authenticated, issued and
delivered in accordance with the provisions of such Guarantee Agreement,
such Guarantee will constitute a valid and legally binding obligation of
Chase, enforceable against Chase in accordance with its terms.
Our opinions set forth in paragraphs 1 and 2 above are subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York, the federal law of the United States and the Delaware General
Corporation Law.
<PAGE> 4
The Chase Manhattan Corporation -4- November 25, 1996
We hereby consent to the filing of this opinion letter as an exhibit
to the Registration Statement and to the reference to us under the caption
"Validity of Securities" in the Prospectus and Prospectus Supplement forming a
part of the Registration Statement.
Very truly yours,
/s/ Simpson Thacher & Bartlett
------------------------------
SIMPSON THACHER & BARTLETT
<PAGE> 1
EXHIBIT 8
November 22, 1996
Re: Issuance and Sale of Cumulative
Quarterly Income Preferred
Securities by Chase Capital I
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Chase Capital I
c/o The Chase Manhattan Corporation
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
We have acted as special tax counsel ("Tax Counsel") to The Chase
Manhattan Corporation, a Delaware corporation (the "Corporation"), and Chase
Capital I, a statutory business trust organized under the Business Trust Act of
the State of Delaware (the "Trust"), in connection with the preparation and
filing by the Corporation and the Trust with the Securities and Exchange
Commission (the "Commission") of a Registration Statement on Form S-3
(Registration No. 333-14959) (as amended, the "Registration Statement") under
the Securities Act of 1933, as amended, and with respect to: (i) the issuance
and sale of the Series A Subordinated Debentures by the Corporation pursuant to
a form of Indenture (the "Indenture") between the Corporation and The Bank of
New York, a New York banking corporation, as trustee (in such capacity, the
"Indenture Trustee"), in the form filed as an exhibit to the Registration
Statement; and (ii) the
<PAGE> 2
-2- November 22, 1996
issuance and sale of Cumulative Quarterly Income Preferred Securities, Series A
(the "Series A QUIPS") and the Series A Common Securities (collectively, the
"Series A Securities") pursuant to the Trust's Amended and Restated Declaration
of Trust (the "Declaration") in the form filed as an exhibit to the Registration
Statement. The Series A QUIPS will be offered for sale to investors pursuant to
the Registration Statement.
The Series A Securities are guaranteed by the Corporation with
respect to the payment of distributions and payments upon liquidation,
redemption and otherwise pursuant to, and to the extent set forth in, the Series
A Guarantee Agreement (the "Series A Guarantee"), between the Corporation and
The Bank of New York, a New York banking corporation, as trustee (in such
capacity, the "Guarantee Trustee"), for the benefit of the holders of the Series
A Securities, in the form filed as an exhibit to the Registration Statement.
All capitalized terms used in this opinion letter and not otherwise
defined herein shall have the meaning ascribed to such terms in the Registration
Statement.
In delivering this opinion letter, we have reviewed and relied upon:
(i) the Registration Statement, (ii) a form of the Indenture; (iii) a form of
the Junior Subordinated Debentures; (iv) a form of the Declaration; (v) a form
of the Series A Guarantee; and (vi) a form of the Series A QUIPS, each as filed
as exhibits to the Registration Statement. Further, we have relied upon certain
other statements and representations contained in the Corporation's letter of
representation attached hereto as Exhibit A. We also have examined and relied
upon originals or copies, certified or
<PAGE> 3
-3- November 22, 1996
otherwise identified to our satisfaction, of such records of the Corporation and
the Trust and such other documents, certificates and records as we have deemed
necessary or appropriate as a basis for the opinions set forth herein.
In our examination of such material, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals and the conformity to original documents of all copies of documents
submitted to us. In addition, we also have assumed that the transactions related
to the issuance of the Series A Subordinated Debentures and the Series A
Securities will be consummated in accordance with the terms of the documents and
forms of documents described herein .
On the basis of the foregoing and assuming that the Trust was formed
and will be maintained in compliance with the terms of the Declaration, we
hereby confirm (i) our opinions set forth in the Registration Statement under
the caption "Certain Federal Income Tax Consequences" and (ii) that, subject to
the qualifications set forth therein, the discussion set forth in the
Registration Statement under such caption is an accurate summary of the United
States federal income tax matters described therein.
We express no opinion with respect to the transactions referred to
herein or in the Registration Statement other than as expressly set forth
herein. Moreover, we note that there is no authority directly on point dealing
with securities such as the Series A QUIPS or transactions of the type described
herein and that our opinion is not binding on the Internal Revenue Service
("IRS") or the courts, either of which could take a contrary
<PAGE> 4
-4- November 22, 1996
position. Nevertheless, we believe that if challenged, the opinions we express
herein would be sustained by a court with jurisdiction in a properly presented
case.
Our opinion is based upon the Code, the Treasury regulations
promulgated thereunder and other relevant authorities and law, all as in effect
on the date hereof. Consequently, future changes in the law may cause the tax
treatment of the transactions referred to herein to be materially different from
that described above.
We are admitted to practice law only in the State of New York and the
opinions we express herein are limited solely to matters governed by the federal
law of the United States.
We hereby consent to the use of this opinion for filing as Exhibit 8
to the Registration Statement and the use of our name in the Registration
Statement under the captions "Certain Federal Income Tax Consequences" and
"Legal Matters".
Very truly yours,
/s/ Simpson Thacher & Bartlett
Simpson Thacher & Bartlett
<PAGE> 5
[The Chase Manhattan Corporation Letterhead]
November 22, 1996
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3
(Registration No. 333-14959) (as amended, the "Registration Statement") related
to the issuance and sale of the Cumulative Quarterly Income Preferred
Securities, Series A (the "Series A QUIPS") by Chase Capital I, a statutory
business trust formed under the laws of the State of Delaware (the "Trust"),
Simpson Thacher & Bartlett, special tax counsel to the Trust and The Chase
Manhattan Corporation, a Delaware corporation (the "Corporation"), will render
its opinion (the "Tax Opinion") with respect to certain material United States
federal income tax consequences related to the issuance and sale of the Series A
QUIPS. In connection with the issuance of the Tax Opinion, the undersigned, an
officer of the Corporation, recognizing that Simpson Thacher & Bartlett will
rely on this certificate in delivering the Tax Opinion, hereby certifies as of
the date hereof as to the matters set forth in paragraphs one through six
hereof, to the best of his or her knowledge and belief after due inquiry and
investigation as to such matters. (Capitalized terms used and not otherwise
defined herein shall have the same meanings ascribed to such terms in the
Registration Statement.)
1. The Corporation and the Trust intend to create a debtor-creditor
relationship between the Corporation, as debtor, and the Trust,
as a creditor, upon the issuance and sale of the Series A
Subordinated
<PAGE> 6
-2- November 22, 1996
Debentures to the Trust by the Corporation, and the Corporation
will (i) record and at all times continue to reflect the Series
A Subordinated Debentures as indebtedness on its separate books
and records for financial accounting purposes and (ii) treat the
Series A Subordinated Debentures as indebtedness for all United
States tax purposes.
2. The sole assets of the Trust will be the Series A Subordinated
Debentures.
3. The Corporation has no present intent to exercise its right to
defer payments of interest by extending the interest payment
period on the Series A Subordinated Debentures.
4. The Corporation believes that the likelihood that it would
exercise its right to defer payments of interest by extending
the interest payment period on the Series A Subordinated
Debentures at any time during which the Series A Subordinated
Debentures are outstanding is remote because of the restrictions
that would be imposed on the Corporation's ability to pay
dividends on its outstanding equity in the event it elected to
defer payments of interest on the Series A Subordinated
Debentures.
5. The Series A QUIPS issued by the Trust are expected to be rated
"investment grade" by at least one nationally recognized
statistical credit rating agency.
6. The Corporation expects that it will be able to cause its
wholly-owned subsidiaries to pay dividends to the Corporation in
amounts and at times
<PAGE> 7
-3- November 22, 1996
sufficient to enable the Corporation to make timely payments of
interest and principal on the Series A Subordinated Debentures.
The Corporation acknowledges that if any of the foregoing
certifications is inaccurate, the Tax Opinion may not accurately describe the
proper United States federal income tax treatment of the Series A Subordinated
Debentures or the Series A QUIPS and the discussion set forth in the
Registration Statement under the caption "Certain Federal Income Tax
Consequences" may not accurately describe the United States federal income tax
consequences of the transactions described in the Registration Statement. The
Corporation will promptly and timely notify Simpson Thacher & Bartlett if it
discovers that any of the above certifications ceases to be true, correct or
complete.
Very truly yours,
THE CHASE MANHATTAN
CORPORATION
By:/s/ DEBORAH L. DUNCAN
Title: Executive Vice President & Treasurer
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Amendment to
the Registration Statement on Form S-3 of The Chase Manhattan Corporation (the
"Corporation"), Chase Capital I, Chase Capital II and Chase Capital III of our
report dated March 31, 1996 appearing on page 50 of the 1995 Annual Report to
Stockholders of the Corporation set forth in the Current Report on Form 8-K
dated April 16, 1996 of the Corporation and of our report dated January 16, 1996
appearing on page 42 of Chemical Banking Corporation's Annual Report on Form
10-K for the year ended December 31, 1995. We also consent to the reference to
us under the heading "Experts" in such Registration Statement.
/s/ PRICE WATERHOUSE LLP
--------------------------------------
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
November 25, 1996
