<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 15, 1997
REG. NO. 333-19719, 333-19719-01, 333-19719-02
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
THE CHASE MANHATTAN CORPORATION CHASE CAPITAL II
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CHASE CAPITAL III
DELAWARE (EXACT NAME OF EACH REGISTRANT AS SPECIFIED IN ITS TRUST
(STATE OR OTHER JURISDICTION OF INCORPORATION OR AGREEMENT)
ORGANIZATION) DELAWARE
13-2624488 (STATE OR OTHER JURISDICTION OF INCORPORATION
(I.R.S. EMPLOYER IDENTIFICATION NO.) OR ORGANIZATION OF EACH REGISTRANT)
270 PARK AVENUE, NEW YORK, NEW YORK 10017 13-391851
(212) 270-6000 13-391852
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCLUDING AREA CODE, C/O THE CHASE MANHATTAN CORPORATION
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) 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. [ ]
------------------------
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY , 1997
$ ,000,000
CHASE CAPITAL II
FLOATING RATE CAPITAL SECURITIES, SERIES B
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
THE CHASE MANHATTAN CORPORATION
----------------------
The Floating Rate Capital Securities, Series B (the "Series B Capital
Securities"), offered hereby represent preferred beneficial ownership interests
in Chase Capital II, a statutory business trust created under the laws of the
State of Delaware (the "Series B 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 B
Issuer ("Series B Common Securities" and, collectively with the Series B Capital
Securities, the "Series B Securities"). The Bank of New York is the Property
Trustee of the Series B Issuer. The
---------------------- (Continued on next page)
SEE "RISK FACTORS" BEGINNING ON PAGE S-6 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES B CAPITAL SECURITIES.
----------------------
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>
UNDERWRITING PROCEEDS TO
PRICE TO COMMISSIONS THE SERIES B
PUBLIC(1) AND DISCOUNTS(2) ISSUER(3)(4)
------------------- ---------------------- -------------------
<S> <C> <C> <C>
Per Series B Capital Security....... $1,000 (3) $1,000
Total............................... $ ,000,000 (3) $ ,000,000
</TABLE>
- ---------------
(1) Plus accrued distributions, if any, from , 1997.
(2) The Series B 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."
(3) In view of the fact that the proceeds of the sale of the Series B Capital
Securities will be invested in the Series B Subordinated Debentures, the
Corporation has agreed to pay to the Underwriters as compensation for their
arranging the investment therein of such proceeds $ per Series B Capital
Security (or $ in the aggregate). See "Underwriting."
(4) Expenses of the offering which are payable by the Corporation are estimated
to be $650,000.
----------------------
This Prospectus Supplement and the related Prospectus may be used by direct
or indirect wholly-owned subsidiaries of the Corporation, including Chase
Securities Inc., in connection with offers and sales related to secondary market
transactions in the Series B Capital Securities. Such subsidiaries may act as
principal or agent in such transactions. Such sales will be made at prices
related to prevailing market prices at the time of sale.
The Series B Capital Securities 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 B Capital Securities 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 January 1997, against payment therefor in immediately
available funds.
GOLDMAN, SACHS & CO.
---------------------
The date of this Prospectus Supplement is January , 1997.
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 B
CAPITAL SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER THE COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
Series B Issuer exists for the sole purpose of issuing the Series B Capital
Securities and the Series B Common Securities and investing the proceeds thereof
in $ of Floating Rate Junior Subordinated Deferrable Interest
Debentures, Series B (the "Series B Subordinated Debentures"), to be issued by
the Corporation. The Series B Subordinated Debentures will mature on January ,
2027 (which date may be shortened to a date not earlier than January , 2017
in certain circumstances as described under "Certain Terms of Series B
Subordinated Debentures -- Conditional Right to Shorten Maturity or Redeem upon
a Tax Event or Capital Treatment Event" upon the occurrence of a Tax Event or a
Capital Treatment Event (each as defined herein) if certain conditions are met).
The Corporation may not shorten the Stated Maturity (as defined herein) without
having received the 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 B Capital Securities will
have a preference under certain circumstances with respect to cash distributions
and amounts payable on liquidation or redemption over the Series B Common
Securities. See "Description of Preferred Securities -- Subordination of Common
Securities" in the accompanying Prospectus.
Holders of the Series B Capital Securities will be entitled to receive
preferential cumulative cash distributions accruing from the date of original
issuance and payable quarterly in arrears on the
day of , , and of each year, commencing , , at a
variable annual rate equal to LIBOR (as defined herein) plus % on the
Liquidation Amount (as defined in the accompanying Prospectus) of $1,000 per
Series B Capital Security ("Distributions"). Subject to certain exceptions, as
described herein, the Corporation has the right to defer payment of interest on
the Series B Subordinated Debentures at any time or from time to time for a
period not exceeding 20 consecutive quarterly periods with respect to each
deferral period (each, an "Extension Period"), provided that no Extension Period
may extend beyond the Stated Maturity of the Series B 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 a variable
annual rate equal to LIBOR plus %, 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 B Subordinated Debentures are so deferred, Distributions on the Series B
Capital Securities 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 B Subordinated
Debentures (including the 7.67% Junior Subordinated Deferrable Interest
Debentures, Series A (the "Series A Subordinated Debentures"), of the
Corporation). During an Extension Period, interest on the Series B Subordinated
Debentures will continue to accrue (and the amount of Distributions to which
holders of the Series B Capital Securities are entitled will accumulate), at a
variable annual rate equal to LIBOR plus %, compounded quarterly from the
relevant payment date for such interest, and holders of Series B Capital
Securities will be required to accrue interest income for United States federal
income tax purposes. See "Certain Terms of Series B Subordinated
Debentures -- Option to Defer Interest Payments" and "Certain Federal Income Tax
Consequences -- Interest Income and Original Issue Discount."
S-2
<PAGE> 4
(cover page continued)
The Series B Subordinated Debentures are unsecured and subordinated to all
Senior Debt (as defined in the accompanying Prospectus). Substantially all of
the Corporation's existing indebtedness constitutes Senior Debt (other than
approximately $618.6 million of the Corporation's existing indebtedness
evidenced by the Series A Subordinated Debentures). 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 B Subordinated Debentures (and therefore the Series B
Capital Securities) will be effectively subordinated to all existing and future
liabilities of the Corporation's subsidiaries, and holders thereof should only
look to the assets of the Corporation for payments on the Series B Subordinated
Debentures. See "Description of Junior Subordinated Debentures -- Subordination"
in the accompanying Prospectus.
The Corporation has, through the Series B Guarantee, the Series B Trust
Agreement, the Series B Subordinated Debentures and the Indenture (each as
defined herein), taken together, fully, irrevocably and unconditionally
guaranteed all of the Series B Issuer's obligations under the Series B Capital
Securities. See "Relationship Among the Preferred Securities, the Corresponding
Junior Subordinated Debentures and the Guarantees -- Full and Unconditional
Guarantee" in the accompanying Prospectus. The Series B Guarantee of the
Corporation guarantees the payment of Distributions and payments on liquidation
of the Series B Issuer or redemption of the Series B Capital Securities, but
only in each case to the extent of funds held by the Series B Issuer, as
described herein (the "Series B Guarantee"). See "Description of Guarantees" in
the accompanying Prospectus. If the Corporation does not make interest payments
on the Series B Subordinated Debentures held by the Series B Issuer, the Series
B Issuer will have insufficient funds to pay Distributions on the Series B
Capital Securities. The Series B Guarantee does not cover payment of
Distributions when the Series B Issuer has insufficient funds to pay such
Distributions. In such event, a holder of Series B Capital Securities 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 B Guarantee are subordinate and junior in right of payment to all Senior
Debt of the Corporation.
The Series B Capital Securities are subject to mandatory redemption, in
whole or in part, upon repayment of the Series B Subordinated Debentures at
their Stated Maturity or 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 B Subordinated Debentures
are redeemable prior to their Stated Maturity at the option of the Corporation
(i) on or after January , 2007, in whole at any time or in part from time to
time, or (ii) at any time in certain circumstances as described under "Certain
Terms of Series B Subordinated Debentures -- Conditional Right to Shorten
Maturity or Redeem upon a Tax Event or Capital Treatment Event", in whole (but
not in part), upon the occurrence of a Tax Event or a Capital Treatment Event.
See "Certain Terms of Series B Capital Securities -- Redemption" and "Certain
Terms of Series B Subordinated Debentures -- Redemption."
The Corporation will have the right at any time to terminate the Series B
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 B Capital Securities -- Liquidation of
Series B Issuer and Distribution of Series B Subordinated Debentures to
Holders." In the event of the termination of the Series B Issuer, after
satisfaction of liabilities to creditors of the
S-3
<PAGE> 5
(cover page continued)
Series B Issuer as required by applicable law, the holders of the Series B
Capital Securities will be entitled to receive a Liquidation Amount of $1,000
per Series B Capital Security 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 B Subordinated Debentures in exchange therefor, subject to
certain exceptions. See "Description of Preferred Securities -- Liquidation
Distribution Upon Termination" in the accompanying Prospectus.
The Series B Capital Securities will be represented by global certificates
registered in the name of The Depository Trust Company ("DTC") or its nominee.
Beneficial interests in the Series B Capital Securities will be shown on, and
transfers thereof will be effected only through, records maintained by
participants in DTC. A portion of the Series B Capital Securities is being
offered by the Underwriters specified herein directly or through their
representative selling agents, , ,
and , outside the United States (the
"International Offering"). The Series B Capital Securities offered in the
International Offering will be represented by global certificates deposited with
a custodian for and registered in the name of a nominee of DTC in New York, New
York for the account of Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System ("Euroclear") and CEDEL Bank,
societe anonyme ("Cedel"). Except as described in the accompanying Prospectus,
Series B Capital Securities in certificated form will not be issued in exchange
for the global certificates. See "Certain Terms of Series B Capital
Securities -- Registration of Series B Capital Securities."
S-4
<PAGE> 6
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, THE SERIES B ISSUER OR 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 OR THE SERIES B ISSUER 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.
------------------
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, dated as of December 1, 1996, 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 "Series B Trust Agreement" means the Amended
and Restated Trust Agreement relating to the Series B 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"), the Administrative Trustees named therein (collectively,
with the Property Trustee and Delaware Trustee, the "Issuer Trustees") and the
holders of the Series B Capital Securities from time to time. 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.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Risk Factors................................................................................... S- 6
Chase Capital II............................................................................... S-11
The Chase Manhattan Corporation................................................................ S-12
Consolidated Ratios of Earnings to Fixed Charges............................................... S-14
Use of Proceeds................................................................................ S-14
Capitalization................................................................................. S-15
Accounting Treatment........................................................................... S-15
Certain Terms of Series B Capital Securities................................................... S-16
Certain Terms of Series B Subordinated Debentures.............................................. S-19
Certain Terms of Series B Guarantee............................................................ S-24
Certain Federal Income Tax Consequences........................................................ S-25
Certain ERISA Considerations................................................................... S-30
Underwriting................................................................................... S-32
Validity of Securities......................................................................... S-34
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>
S-5
<PAGE> 7
RISK FACTORS
Prospective purchasers of the Series B Capital Securities 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 B Capital Securities may receive
Series B Subordinated Debentures in exchange therefor upon liquidation of the
Series B Issuer, prospective purchasers of Series B Capital Securities are also
making an investment decision with regard to the Series B Subordinated
Debentures and should carefully review all the information regarding the Series
B Subordinated Debentures contained herein.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES B GUARANTEE AND THE SERIES
B SUBORDINATED DEBENTURES
The obligations of the Corporation under the Series B Guarantee issued by
the Corporation for the benefit of the holders of Series B Securities and under
the Series B Subordinated Debentures are unsecured and rank subordinate and
junior in right of payment to all Senior Debt of the Corporation. Substantially
all of the Corporation's existing indebtedness constitutes Senior Debt (other
than approximately $618.6 million of the Corporation's existing indebtedness
evidenced by the Series A Subordinated Debentures). 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. There are various legal limitations on the extent to which certain
of the Corporation's subsidiaries may extend credit, pay dividends or otherwise
supply funds to, or engage in transactions with, the Corporation or certain of
its other subsidiaries. Accordingly, the Series B Subordinated Debentures will
be effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and holders of Series B Subordinated Debentures
should look only to the assets of the Corporation for payments on the Series B
Subordinated Debentures. See "The Chase Manhattan Corporation." None of the
Indenture, the Series B Guarantee or the Series B 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 B Issuer to pay amounts due on the Series B
Capital Securities is solely dependent upon the Corporation making payments on
the Series B 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 and is
continuing, the Corporation has the right under the Indenture to defer payment
of interest on the Series B Subordinated Debentures at any time or from time to
time for a period not exceeding 20 consecutive quarterly periods with respect to
each Extension Period, provided that no Extension Period may extend beyond the
Stated Maturity of the Series B Subordinated Debentures. As a consequence of any
such deferral, quarterly Distributions on the Series B Capital Securities by the
Series B Issuer will also be deferred (and the amount of Distributions to which
holders of the Series B Capital Securities are entitled will accumulate
additional Distributions thereon at a variable annual rate equal to LIBOR plus
%, 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 B
S-6
<PAGE> 8
Subordinated Debentures (including, without limitation, 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 B 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 B 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 that was entered
into prior to the commencement of such Extension Period). 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
quarterly periods or extend beyond the Stated Maturity of the Series B
Subordinated Debentures. Upon the termination of any Extension Period and the
payment of all interest then accrued and unpaid (together with interest thereon
at a variable annual rate equal to LIBOR plus %, 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 B Capital Securities -- Distributions" and "Certain Terms of Series B
Subordinated Debentures -- Option to Defer Interest Payments."
Should an Extension Period occur, a holder of Series B Capital Securities
will be required to accrue income (in the form of original issue discount) in
respect of its pro rata share of the Series B Subordinated Debentures held by
the Series B Issuer for United States federal income tax purposes. As a result,
a holder of Series B Capital Securities 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 B Issuer if the holder disposes of the
Series B Capital Securities 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 B Capital
Securities."
The Corporation has no current intention of exercising its right to defer
payments of interest on the Series B Subordinated Debentures. However, should
the Corporation elect to exercise such right in the future, the market price of
the Series B Capital Securities is likely to be affected. A holder that disposes
of its Series B Capital Securities during an Extension Period, therefore, might
not receive the same return on its investment as a holder that continues to hold
its Series B Capital Securities.
TAX EVENT OR CAPITAL TREATMENT EVENT -- EXCHANGE OF SERIES B CAPITAL SECURITIES
FOR SERIES B SUBORDINATED DEBENTURES, SHORTENING OF MATURITY OF SERIES B
SUBORDINATED DEBENTURES OR REDEMPTION
Upon the occurrence and continuation of a Tax Event or Capital Treatment
Event (whether occurring before or after January , 2007), the Corporation has
the right if certain conditions are met, (i) to terminate the Series B Issuer
and cause the Series B Subordinated Debentures to be distributed to the holders
of the Series B Capital Securities in exchange therefor upon liquidation of the
Series B Issuer, (ii) to shorten the maturity of the Series B Subordinated
Debentures to a date not earlier than January , 2017, or (iii) to redeem
the Series B Subordinated Debentures in whole (but not in part) within 90 days
following the occurrence of such Tax Event or Capital Treatment Event and
thereby cause a mandatory redemption of the Series B Capital Securities. 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. See "Certain Terms of Series B Subordinated
S-7
<PAGE> 9
Debentures -- Conditional Right to Shorten Maturity or Redeem upon a Tax Event
or Capital Treatment Event".
A "Tax Event" means the receipt by the Series B 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 B Capital Securities under the Trust Agreement,
there is more than an insubstantial risk that (i) the Series B 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 B
Subordinated Debentures, (ii) interest payable by the Corporation on the Series
B 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) the Series B 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. With respect to
Series B Subordinated Debentures which are no longer held by the Series B Issuer
or another issuer, "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 decision is announced on or after the
date of issuance of the Series B Subordinated Debentures under the Indenture,
there is more than an insubstantial risk that interest payable by the
Corporation on the Series B 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 (each of the
circumstances referred to in clauses (i) , (ii) and (iii) of the preceding
sentence and the circumstances referred to in this sentence being referred to
herein as an "Adverse Tax Consequence").
See "Risk Factors -- Possible Tax Law Changes Affecting the Series B
Capital Securities" for a discussion of certain legislative proposals that, if
adopted, could give rise to a Tax Event, which may permit the Corporation to
shorten the maturity of the Series B Subordinated Debentures or cause a
redemption of the Series B Capital Securities prior to January , 2007.
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 B Capital Securities
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 B Capital Securities 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.
EXCHANGE OF SERIES B CAPITAL SECURITIES FOR SERIES B SUBORDINATED DEBENTURES
The Corporation will have the right at any time to terminate the Series B
Issuer and, after satisfaction of liabilities to creditors of the Series B
Issuer as required by applicable law, cause the Series B Subordinated Debentures
to be distributed to the holders of the Series B Capital Securities in exchange
therefor upon liquidation of the Series B Issuer. The exercise of such right is
subject to
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the Corporation having received prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies. See "Certain Terms of
Series B Capital Securities -- Liquidation of Series B Issuer and Distribution
of Series B Subordinated Debentures to Holders."
Under current United States federal income tax law and interpretations and
assuming, as expected, the Series B Issuer is classified as a grantor trust for
such purposes, a distribution of the Series B Subordinated Debentures upon a
liquidation of the Series B Issuer should not be a taxable event to holders of
the Series B Capital Securities. However, if a Tax Event were to occur which
would cause the Series B Issuer to be subject to United States federal income
tax with respect to income received or accrued on the Series B Subordinated
Debentures, a distribution of the Series B Subordinated Debentures by the Series
B Issuer could be a taxable event to the Series B Issuer and the holders of the
Series B Capital Securities. See "Certain Federal Income Tax Consequences --
Distribution of Series B Subordinated Debentures to Holders of Series B Capital
Securities."
SHORTENING OF STATED MATURITY OF SERIES B SUBORDINATED DEBENTURES
Upon the occurrence of a Tax Event or a Capital Treatment Event, the
Corporation in certain circumstances will have the right to shorten the maturity
of the Series B Subordinated Debentures to a date not earlier than January ,
2017 and thereby cause the Series B Capital Securities to be redeemed on such
earlier date. See "Certain Terms of Series B Subordinated Debentures --
Conditional Right to Shorten Maturity or Redeem upon a Tax Event or Capital
Treatment Event."
MARKET PRICES
There can be no assurance as to the market prices for Series B Capital
Securities or Series B Subordinated Debentures that may be distributed in
exchange for Series B Capital Securities upon liquidation of the Series B
Issuer. Accordingly, the Series B Capital Securities that an investor may
purchase, whether pursuant to the offer made hereby or in the secondary market,
or the Series B Subordinated Debentures that a holder of Series B Capital
Securities may receive on liquidation of the Series B Issuer, may trade at a
discount to the price that the investor paid to purchase the Series B Capital
Securities offered hereby. As a result of the existence of the Corporation's
right to defer interest payments, the market price of the Series B Capital
Securities (which represent beneficial ownership interests in the Series B
Issuer) may be more volatile than the market prices of other securities that are
not subject to such optional deferrals. See "Certain Terms of Series B
Subordinated Debentures" and "Description of Junior Subordinated
Debentures -- Corresponding Junior Subordinated Debentures" in the accompanying
Prospectus.
RIGHTS UNDER THE SERIES B GUARANTEE
The Series B Guarantee guarantees to the holders of the Series B Securities
the following payments, to the extent not paid by the Series B Issuer: (i) any
accumulated and unpaid Distributions required to be paid on the Series B
Securities, to the extent that the Series B Issuer has funds on hand available
therefor at such time, (ii) the redemption price with respect to any Series B
Securities called for redemption, to the extent that the Series B 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 B Issuer
(unless the Series B Subordinated Debentures are distributed to holders of the
Series B 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 B Issuer has funds on hand available therefor at such
time, and (b) the amount of assets of the Series B Issuer remaining available
for distribution to holders of the Series B Securities after payment of
creditors of the Series B Issuer as required by applicable law. The Series B
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 B Guarantee (the "Guarantee Trustee") for
the purpose of compliance with the Trust Indenture Act and will hold the Series
B Guarantee for the benefit of the holders of the Series B Securities. The
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<PAGE> 11
Bank of New York will also act as Debenture Trustee for the Series B
Subordinated Debentures and as Property Trustee under the Indenture and The Bank
of New York (Delaware) will act as Delaware Trustee under the Series B Trust
Agreement.
The Series B Guarantee is subordinate as described under "-- Ranking of
Subordinated Obligations Under the Series B Guarantee and the Series B
Subordinated Debentures."
The holders of not less than a majority in aggregate Liquidation Amount of
the Series B 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 B Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee under the Series B Guarantee. Any holder of
the Series B Securities may institute a legal proceeding directly against the
Corporation to enforce its rights under the Series B Guarantee without first
instituting a legal proceeding against the Series B 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 B Subordinated Debentures,
the Series B Issuer would lack funds for the payment of Distributions or amounts
payable on redemption of the Series B Securities or otherwise, and, in such
event, holders of the Series B Securities would not be able to rely upon the
Series B 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 or premium, if
any, on or principal of the Series B Subordinated Debentures on the applicable
payment date, then a holder of Series B Capital 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 or premium, if any, on such Series B Subordinated Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Series B
Capital 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 B
Capital Securities in the Direct Action. Except as described herein, holders of
Series B Capital Securities will not be able to exercise directly any other
remedy available to the holders of the Series B Subordinated Debentures or
assert directly any other rights in respect of the Series B 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
Series B Trust Agreement provides that each holder of Series B Securities by
acceptance thereof agrees to the provisions of the Series B Guarantee and the
Indenture.
LIMITED VOTING RIGHTS
Holders of Series B Capital Securities generally will have limited voting
rights relating only to the modification of the Series B Capital Securities and
the Series B Guarantee and the exercise of the Series B Issuer's rights as
holder of Series B Subordinated Debentures and the Series B Guarantee. Holders
of Series B Capital Securities 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 B 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 Series B Trust Agreement without the consent of
holders of Series B Capital Securities to ensure that the Series B Issuer will
not be classified for United States federal income tax purposes as an
association or publicly traded partnership subject to taxation as a corporation
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.
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TRADING CHARACTERISTICS OF SERIES B CAPITAL SECURITIES
The Corporation does not intend to have the Series B Capital Securities
listed on The New York Stock Exchange or any other securities exchange. See
"Certain Federal Income Tax Consequences -- Interest Income and Original Issue
Discount" and "-- Sales or Redemption of Series B Capital Securities" for a
discussion of the United States federal income tax consequences that may result
from a taxable disposition of the Series B Capital Securities.
POSSIBLE TAX LAW CHANGES AFFECTING THE SERIES B CAPITAL SECURITIES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
introduced in the 104th Congress which would have, among other things, generally
denied 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. This provision of
the Bill was proposed to be effective generally for instruments issued on or
after December 7, 1995. If this provision were to apply to the Series B
Subordinated Debentures, the Corporation would not be able to deduct interest on
the Series B 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 Bill, if enacted, 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"). The 104th Congress adjourned without enacting the Bill. Moreover, if
the principles contained in the Joint Statement and the Democrat Letters were
followed, any proposed legislation in this area that is subsequently enacted
would not apply to the Series B Subordinated Debentures. Although the 104th
Congress adjourned without enacting the Bill, there can be no assurance that
current or future legislative proposals or final legislation will not adversely
affect the ability of the Corporation to deduct interest on the Series B
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 shorten the maturity of the
Series B Subordinated Debentures to a date not earlier than January , 2017 or
to cause a redemption of the Series B Capital Securities before January ,
2007. See "Certain Terms of Series B Subordinated Debentures -- Conditional
Right to Shorten Maturity or Redeem upon a Tax Event or Capital Treatment Event"
and "-- Redemption" in this Prospectus Supplement and "Description of Preferred
Securities -- Redemption or Exchange -- Tax Event or Capital Treatment Event
Redemption" in the accompanying Prospectus. See also "Certain Federal Income Tax
Consequences -- Possible Tax Law Changes."
CHASE CAPITAL II
Chase Capital II (the "Series B Issuer") is a statutory business trust
created under Delaware law pursuant to (i) the Series B 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 B
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 B Issuer exists for
the exclusive purposes of (i) issuing and selling the Series B Capital
Securities and Series B Common Securities, (ii) using the proceeds from the sale
of Series B Capital Securities and Series B
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Common Securities to acquire Series B 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 B
Securities). Accordingly, the Series B Subordinated Debentures will be the sole
assets of the Series B Issuer, and payments under the Series B Subordinated
Debentures will be the sole revenue of the Series B Issuer. All of the Series B
Common Securities will be owned by the Corporation. The Series B Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Series B Capital Securities, except that upon the occurrence and
continuance of an event of default under the Series B Trust Agreement resulting
from an event of default under the Indenture, the rights of the Corporation as
holder of the Series B 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 B Capital Securities. See "Description
of Preferred Securities -- Subordination of Common Securities" in the
accompanying Prospectus. The Corporation will acquire Series B Common Securities
in an aggregate Liquidation Amount equal to 3% of the total capital of the
Series B Issuer. The Series B Issuer has a term of 55 years, but may terminate
earlier as provided in the Trust Agreement. The principal executive office of
the Series B Issuer is 270 Park Avenue, New York, New York 10017 and its
telephone number is (212) 270-6000. See "The Issuers" in the accompanying
Prospectus.
It is anticipated that the Series B 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 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,
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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 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); and Texas Commerce. The
Corporation maintains a leading market share position in serving the financial
needs of consumers, middle market commercial enterprises and small businesses in
the tri-state 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 September 30, 1996, the
Corporation was custodian or trustee for approximately $3 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.
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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 YEAR ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------------------------
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 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 B Capital Securities will
be invested by the Series B Issuer in Series B Subordinated Debentures. The
Corporation intends that the proceeds from the sale of the Series B 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 B Capital Securities 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 B Subordinated Debentures, will provide the Corporation
with a more cost-effective means of obtaining capital for bank regulatory
purposes than other Tier 1 Capital alternatives currently available to it.
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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 (i) the issuance of $600 million of 7.67% Capital Securities,
Series A, by Chase Capital I on December 4, 1996, and (ii) the consummation of
the offering of the Series B Capital Securities. 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
-------- --------
(IN MILLIONS)
<S> <C> <C>
Total long-term debt........................... $ 12,379 $ 12,379
-------- --------
Guaranteed Preferred Beneficial Interests in
Corporation's Junior Subordinated Deferrable
Interest Debentures, Series A(a)............. -- 600
Guaranteed Preferred Beneficial Interests in
Corporation's Junior Subordinated Deferrable
Interest Debentures, Series B(b)............. --
Preferred Stock of Subsidiary(c)............... 550 550
-------- --------
Stockholders' Equity
Preferred Stock.............................. 2,650 2,650
Common Stock................................. 440 440
Capital Surplus.............................. 10,444 10,444
Retained Earnings............................ 8,091 8,091
Net Unrealized Loss on Securities Available
for Sale Net of Taxes..................... (480) (480)
Treasury Stock, At Cost...................... (5) (5)
-------- --------
Total Stockholders' Equity................ $ 21,140 $ 21,140
-------- --------
Total Capitalization........................... $ 34,069 $
======== ========
</TABLE>
- ---------------
(a) The sole assets of Chase Capital I are approximately $618.6 million
principal amount of Series A Subordinated Debentures issued by the Corporation
to Chase Capital I. The Series A Subordinated Debentures bear interest at the
rate of 7.67% per annum and mature on December 1, 2026. The Corporation owns all
of the common securities of Chase Capital I.
(b) As described herein, the sole assets of the Series B Issuer will be
approximately $ million principal amount of Series B Subordinated
Debentures to be issued by the Corporation to the Series B Issuer. The Series B
Subordinated Debentures will bear interest at a variable rate equal to LIBOR
plus % on the Liquidation Amount of $1,000 per Series B Subordinated
Debenture and is scheduled to mature on January , 2027. The Corporation will
own all of the Series B common securities of the Series B Issuer.
It is anticipated that the Series B Issuer will not be subject to the
reporting requirements under the Exchange Act.
(c) 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 B Issuer will be treated as a
subsidiary of the Corporation and, accordingly, the accounts of the Series B
Issuer will be included in the consolidated financial statements of the
Corporation. The Series B Capital Securities will be presented as part of 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, Series A and Series B" and
appropriate disclosures about the Series B Capital Securities, the Series B
Guarantee and the Series B Subordinated Debentures will be included in the notes
to the consolidated financial statements. For financial reporting purposes, the
Corporation will
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record Distributions payable on the Series B Capital Securities as an expense in
the consolidated statements of income.
The Corporation has agreed that future financial reports of the Corporation
will: (i) present the Preferred Securities issued by other trusts created by the
Corporation on the Corporation's balance sheet as a separate line item entitled
"Guaranteed Preferred Beneficial Interests in Corporation's Junior Subordinated
Deferrable Interest Debentures Series A and Series B"; (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,
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 relevant indenture, trust agreement and guarantee, in the aggregate,
constitute a full and unconditional guarantee by the Corporation of such trust's
obligations under the Preferred Securities issued by such trust.
CERTAIN TERMS OF SERIES B CAPITAL SECURITIES
GENERAL
The following summary of certain terms and provisions of the Series B
Capital Securities 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 B
Capital Securities, which describes the material provisions thereof, does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the Series B Trust Agreement to which reference is hereby made.
The form of the Series B 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 B Capital Securities represent beneficial ownership interests in
the Series B Issuer, and Distributions on the Series B Capital Securities will
be payable at a variable annual rate equal to LIBOR plus % on the stated
Liquidation Amount of $1,000, payable quarterly in arrears on
and , , of each year, to the holders of the Series B Capital
Securities on the relevant record dates. The record dates for the Series B
Capital Securities will be, for so long as the Series B Capital Securities
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 B Capital Securities are not in book-entry form, the day of
the month preceding the month in which the relevant Distribution payment date
occurs. Distributions will accumulate from January , 1997. The first
Distribution payment date for the Series B Capital Securities will be
, 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 B Capital
Securities 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.
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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 B Subordinated Debentures at any time or from time to
time for a period not exceeding 20 consecutive quarterly periods with respect to
each Extension Period, provided that no Extension Period may extend beyond the
Stated Maturity of the Series B Subordinated Debentures. As a consequence of any
such deferral of interest payments by the Corporation, quarterly Distributions
on the Series B Capital Securities by the Series B Issuer will also be deferred
during any such Extension Period. Distributions to which holders of the Series B
Capital Securities are entitled will accumulate additional Distributions thereon
a variable annual rate equal to LIBOR plus %, 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 B Subordinated Debentures
(including 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 B 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 B 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 that was entered into prior to the commencement of such
Extension Period). Prior to the termination of any such Extension Period, the
Corporation may further defer the payment of interest on the Series B
Subordinated Debentures, provided that no Extension Period may exceed 20
consecutive quarterly periods or extend beyond the Stated Maturity of the Series
B 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 a variable annual rate equal to LIBOR plus %, 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 B 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 B
Subordinated Debentures.
DISTRIBUTION RATE
LIBOR and the amount of Distributions payable in respect of each
Distribution period will be calculated by The Bank of New York, as Calculation
Agent, in the same manner as LIBOR and the interest payable in respect of each
interest payment period for the Series B Subordinated Debentures, as described
under "Certain Terms of Series B Subordinated Debentures -- Interest Rate."
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Series B
Subordinated Debentures, whether at Stated Maturity or upon earlier redemption
as provided in the Indenture, the
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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 B Securities, upon not less than 30 nor more than 60 days notice
prior to the date fixed for redemption, at a redemption price, with respect to
the Series B Securities (the "Redemption Price"), equal to the aggregate
Liquidation Amount of such Series B Securities plus accumulated and 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 Series B Subordinated Debentures. See "Description
of Series B Subordinated Debentures -- Redemption." If less than all of the
Series B 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 Series B Capital Securities and the Series B
Common Securities. The amount of premium, if any, paid by the Corporation upon
the redemption of all or any part of Series B Subordinated Debentures to be
repaid or redeemed on a Redemption Date shall be allocated to the redemption pro
rata of the Series B Capital Securities and the Series B Common Securities.
The Corporation has the right to redeem the Series B Subordinated
Debentures (i) on or after January , 2007, in whole at any time or in part
from time to time, or (ii) at any time, in certain circumstances as described
under "Certain Terms of Series B Subordinated Debentures -- Conditional Right to
Shorten Maturity or Redeem upon a Tax Event or Capital Treatment Event," in
whole (but not in part) within 90 days following the occurrence of a Tax Event
or a Capital Treatment Event.A redemption of the Series B Subordinated
Debentures would cause a mandatory redemption of Series B Capital Securities and
Series B Common Securities.
The Redemption Price, in the case of a redemption under (i) or (ii) above,
shall be equal to the aggregate Liquidation Amount of such Series B Capital
Securities plus accumulated and unpaid Distributions thereon to the Redemption
Date.
LIQUIDATION OF SERIES B ISSUER AND DISTRIBUTION OF SERIES B SUBORDINATED
DEBENTURES TO HOLDERS
The Corporation will have the right at any time to terminate the Series B
Issuer and cause the Series B Subordinated Debentures to be distributed to the
holders of the Series B Capital Securities in exchange therefor upon liquidation
of the Series B 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 B Issuer is treated as a grantor trust, a
distribution of Series B Subordinated Debentures in exchange for the Series B
Capital Securities should not be a taxable event to holders of the Series B
Capital Securities. 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 B Capital Securities. See
"Certain Federal Income Tax Consequences -- Distribution of Series B
Subordinated Debentures to Holders of Series B Capital Securities." If the
Corporation elects neither to redeem the Series B Subordinated Debentures prior
to maturity nor to liquidate the Series B Issuer and distribute the Series B
Subordinated Debentures to holders of the Series B Capital Securities in
exchange therefor, the Series B Capital Securities will remain outstanding until
the Stated Maturity of the Series B Subordinated Debentures.
If the Corporation elects to liquidate the Series B Issuer and thereby
causes the Series B Subordinated Debentures to be distributed to holders of the
Series B Capital Securities in exchange therefor upon liquidation of the Series
B Issuer, the Corporation shall continue to have the right to shorten the
maturity of or to redeem the Series B Subordinated Debentures in certain
circumstances upon the occurrence of a Tax Event or a Capital Treatment Event,
as described under "Certain Terms of Series B Subordinated
Debentures -- Conditional Right to Shorten Maturity or Redeem upon a Tax Event
or Capital Treatment Event."
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LIQUIDATION VALUE
The amount payable on the Series B Capital Securities in the event of any
liquidation of the Series B Issuer is $1,000 per Series B Capital Security plus
accumulated and unpaid Distributions, which amount may be paid in the form of a
distribution of a Like Amount of Series B Subordinated Debentures, subject to
certain exceptions. See "Description of Preferred Securities -- Liquidation
Distribution Upon Termination" in the accompanying Prospectus.
REGISTRATION OF SERIES B CAPITAL SECURITIES
The Series B Capital Securities will be represented by global certificates
registered in the name of DTC or its nominee. Beneficial interests in the Series
B Capital Securities 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 B Capital Securities 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 B Capital Securities
registered in the names of persons other than DTC or its nominee only if (i) DTC
notifies the Series B 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 Series B 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 B 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 B Capital Securities are issued in definitive form, such Series B Capital
Securities will be in denominations of $1,000 and integral multiples thereof and
may be transferred or exchanged at the offices described below.
Payments on Series B Capital Securities represented by a global security
will be made to DTC, as the depositary for the Series B Capital Securities. In
the event Series B Capital Securities are issued in certificated form, the
Liquidation Amount and Distributions will be payable, the transfer of the Series
B Capital Securities will be registrable, and Series B Capital Securities will
be exchangeable for Series B Capital Securities 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 B Capital Securities are issued in certificated form,
the record dates for payment of Distributions will be the 15th day of the month
preceding 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.
CERTAIN TERMS OF SERIES B SUBORDINATED DEBENTURES
GENERAL
The following summary of certain terms and provisions of the Series B
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
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<PAGE> 21
description reference is hereby made. The summary of certain terms and
provisions of the Series B Subordinated Debentures set forth below, which
describes the material provisions thereof, does not purport to be complete and
is subject to, and qualified in its entirety by reference to, the Indenture, to
which reference is hereby made. The 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 B Capital Securities, the
Series B Issuer will invest the proceeds thereof, together with the
consideration paid by the Corporation for the Series B Common Securities, in the
Series B Subordinated Debentures issued by the Corporation. The Series B
Subordinated Debentures will bear interest at a variable annual rate equal to
LIBOR plus % on the principal amount thereof, payable quarterly in arrears
on , , and of each year (each, an "Interest Payment Date"),
commencing , to the person in whose name each Series B
Subordinated Debenture is registered 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 B Issuer, each Series B Subordinated
Debenture will be held by the Property Trustee in trust for the benefit of the
holders of the Series B Capital Securities. 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 B
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 a variable annual rate equal to LIBOR plus %, 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 B Subordinated Debentures will be issued as a series of junior
subordinated deferrable interest debentures under the Indenture.
The Series B Subordinated Debentures will mature on January , 2027 (such
date, as it may be shortened as hereinafter described, the "Stated Maturity").
Such date may be shortened by the Corporation in certain circumstances upon the
occurrence of a Tax Event or a Capital Treatment Event as described under
"-- Conditional Right to Shorten Maturity or Redeem upon a Tax Event or Capital
Treatment Event" to any date not earlier than January , 2017. The Corporation
may not shorten the Stated Maturity without having received the prior approval
of the Federal Reserve to do so, if then required under applicable capital
guidelines or policies. In the event that the Corporation elects to shorten the
maturity of the Series B Subordinated Debentures, it shall give notice to the
Debenture Trustee, and the Debenture Trustee shall give notice of such
shortening to the holders of the Series B Subordinated Debentures no more than
30 and no less than 60 days prior to the effectiveness thereof.
The Series B 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. Substantially all of the Corporation's existing
indebtedness constitutes Senior Debt (other than approximately $618.6 million of
the Corporation's existing indebtedness evidenced by the Series A Subordinated
Debentures). 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 B
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of
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<PAGE> 22
Series B Subordinated Debentures should look only to the assets of the
Corporation for payments on the Series B 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.
INTEREST RATE
The Bank of New York, as Calculation Agent (the "Calculation Agent"), will
calculate the interest rate for each quarterly interest period based on LIBOR
determined as of two London Business Days (defined as any day, other than a
Saturday or Sunday, on which banks are open for business in London) prior to the
first day of such interest period (each, a "Determination Date"). "LIBOR" means,
with respect to a quarterly interest period relating to a payment date an
Interest Payment Date (in the following order of priority):
(1) the rate (expressed as a percentage per annum) for Eurodollar
deposits having a three-month maturity that appears on Telerate Page 3750
as of 11:00 a.m. (London time) on the related Determination Date;
(2) if such rate does not appear on Telerate Page 3750 as of 11:00
a.m. (London time) on the related Determination Date, LIBOR will be the
arithmetic mean (if necessary rounded upwards to the nearest whole multiple
of 0.00001%) of the rates (expressed as percentages per annum) for
Eurodollar deposits having a three-month maturity that appear on Reuters
Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of 11:00 a.m.
(London time) on such Determination Date;
(3) if such rate does not appear on Reuters Page LIBO as of 11:00 a.m.
(London time) on the related Determination Date, the Calculation Agent will
request the principal London offices of four leading banks in the London
interbank market to provide such banks' offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for
Eurodollar deposits having a three-month maturity as of 11:00 a.m. (London
time) on such Determination Date. If at least two quotations are provided,
LIBOR will be the arithmetic mean (if necessary rounded upwards to the
nearest whole multiple of 0.00001%) of such quotations;
(4) if fewer than two such quotations are provided as requested in
clause (3) above, the Calculation Agent will request four major New York
City banks to provide such banks' offered quotations (expressed as
percentages per annum) to leading European banks for loans in Eurodollars
having a three-month maturity as of 11:00 a.m. (London time) on such
Determination Date. If at least two such quotations are provided, LIBOR
will be the arithmetic mean (if necessary rounded upwards to the nearest
whole multiple of 0.00001%) of such quotations; and
(5) if fewer than two such quotations are provided as requested in
clause (4) above, LIBOR will be LIBOR as determined on the previous
Determination Date.
If the rate for Eurodollar deposits having a three-month maturity that
initially appears on Telerate Page 3750 or Reuters Page LIBO, as the case may
be, as of 11:00 a.m. (London time) on the related Determination Date is
superseded on Telerate Page 3750 or Reuters Page LIBO, as the case may be, by a
corrected rate before 12:00 noon (London time) on such Determination Date, the
corrected rate as so substituted on the applicable page will be the applicable
LIBOR for such Determination Date.
Absent manifest error, the Calculation Agent's determination of LIBOR and
its calculation of the applicable dividend rate for each interest period will be
final and binding. Investors may obtain the interest rates for the current and
preceding interest period by writing or calling Corporate Trust
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<PAGE> 23
Administration at the Calculation Agent at The Bank of New York, 101 Barclay
Street, Floor 21 West, New York, New York 10286 (telephone (212) 815-5375).
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 B Subordinated Debentures to
defer payment of interest on the Series B Subordinated Debentures for a period
not exceeding 20 consecutive quarterly periods with respect to each Extension
Period, provided that no Extension Period may extend beyond the Stated Maturity
of the Series B Subordinated Debentures. At the end of such Extension Period,
the Corporation must pay all interest then accrued and unpaid on the Series B
Subordinated Debentures (together with interest on such unpaid interest at a
variable annual rate equal to LIBOR plus %, 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 B
Subordinated Debentures (or holders of Series B Capital Securities 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 B Subordinated Debentures (including 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 B
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 B
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 that was entered into prior to the
commencement of such Extension Period). Prior to the termination of any such
Extension Period, the Corporation may further defer the payment of interest on
the Series B Subordinated Debentures, provided that no Extension Period may
exceed 20 consecutive quarterly periods or extend beyond the Stated Maturity of
the Series B 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 a variable annual rate equal to LIBOR plus %,
compounded 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 Distributions on the Series B Securities 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 B Capital Securities may then be
listed or quoted or to holders of Series B Subordinated Debentures of the record
date for such Distributions 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 B Subordinated
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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.
TRUST COSTS AND EXPENSES
In the Indenture, the Corporation, as borrower, has agreed to pay all debts
and other obligations (other than with respect to the Series B Capital
Securities) and all costs and expenses of the Series B Issuer (including costs
and expenses relating to the organization of the Series B Issuer, the fees and
expenses of the Trustees and the costs and expenses relating to the operation of
the Series B Issuer) and to pay any and all taxes and all costs and expenses
with respect thereto (other than United States withholding taxes) to which the
Series B Issuer might become subject.
REDEMPTION
Subject to the Corporation having received prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies, the
Series B Subordinated Debentures are redeemable prior to maturity at the option
of the Corporation (i) on or after January 1, 2007, in whole at any time or in
part from time to time or (ii) at any time, in certain circumstances as
described under "Certain Terms of Series B Subordinated Debentures --
Conditional Right to Shorten Maturity or Redeem upon a Tax Event or Capital
Treatment Event", in whole (but not in part) within 90 days following the
occurrence of a Tax Event or Capital Treatment Event. The proceeds of any such
redemption will be used by the Series B Issuer to redeem the Series B
Securities.
The Redemption Price, in the case of a redemption under clauses (i) or (ii)
above, shall be equal to 100% of the principal amount plus accrued and unpaid
interest thereon to the Redemption Date.
DISTRIBUTION OF SERIES B SUBORDINATED DEBENTURES
As described under "Certain Terms of Series B Capital
Securities -- Liquidation of Series B Issuer and Distribution of Series B
Subordinated Debentures to Holders," under certain circumstances involving the
termination of the Series B Issuer, Series B Subordinated Debentures may be
distributed to the holders of the Series B Capital Securities in exchange
therefor upon liquidation of the Series B Issuer after satisfaction of
liabilities to creditors of the Series B Issuer as provided by applicable law.
If distributed to holders of Series B Capital Securities, the Series B
Subordinated Debentures will initially be issued in the form of one or more
global securities and DTC, or any successor depositary for the Series B Capital
Securities, will act as depositary for the Series B Subordinated Debentures. It
is anticipated that the depositary arrangements for the Series B Subordinated
Debentures would be substantially identical to those in effect for the Series B
Capital Securities. There can be no assurance as to the market price of any
Series B Subordinated Debentures that may be distributed to the holders of
Series B Capital Securities.
CONDITIONAL RIGHT TO SHORTEN MATURITY OR REDEEM UPON A TAX EVENT OR CAPITAL
TREATMENT EVENT
If a Tax Event or a Capital Treatment Event occurs and either (i) in the
opinion of counsel to the Corporation experienced in such matters, there would
in all cases, after effecting the termination of the Series B Issuer and the
distribution of the Series B Subordinated Debentures to the holders of the
Series B Capital Securities in exchange therefor, be more than an insubstantial
risk that an Adverse Tax Consequence (as defined in "Risk Factors -- Tax Event
or Capital Treatment Event -- Exchange of Series B Capital Securities for Series
B Subordinated Debentures, Shortening of Maturity of Series B Debentures or
Redemption") would continue to exist, (ii) in the reasonable determination of
the Corporation, there would in all cases, after effecting the termination of
the Series B Issuer and the distribution of the Series B Subordinated Debentures
to the holders of the
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Series B Capital Securities in exchange therefor upon liquidation of the Series
B Issuer, be more than an insubstantial risk that the Corporation will not be
entitled to treat an amount equal to the Liquidation Amount of the Series B
Capital Securities as "Tier 1 Capital" (or the equivalent thereof) or (iii) the
Series B Subordinated Debentures are not held by the Series B Issuer, then the
Corporation shall have the right (a) to shorten the Stated Maturity of the
Series B Subordinated Debentures to the minimum extent required, but in any
event to a date not earlier than January , 2017 (the action referred to in
this clause (a) being referred to herein as a "Maturity Advancement"), such
that, in the opinion of counsel to the Corporation experienced in such matters,
after advancing the Stated Maturity, interest paid on the Series B Subordinated
Debentures will be deductible for federal income tax purposes, or (b) if either
(x) in the opinion of counsel to the Corporation experienced in such matters,
there would in all cases, after effecting a Maturity Advancement, be more than
an insubstantial risk that an Adverse Tax Consequence would continue to exist or
(y) in the reasonable determination of the Corporation, there would in all
cases, after effecting a Maturity Advancement, be more than an insubstantial
risk that the Corporation will not be entitled to treat an amount equal to the
Liquidation Amount of the Series B Capital Securities 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, to
redeem the Series B Subordinated Debentures, in whole but not in part, at any
time within 90 days following the occurrence of a Tax Event or Capital Treatment
Event at a Redemption Price equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon to the Redemption Date. See "Certain Terms
of Series B Capital Securities -- Liquidation of Series B Issuer and
Distribution of Series B Subordinated Debentures to Holders" and
" -- Redemption" and "Certain Terms of Series B Subordinated
Debentures -- General."
Holders of Series B Capital Securities should consult their own tax
advisors regarding the tax consequences to them of a Maturity Advancement.
See "Certain Federal Tax Law Consequences -- Possible Tax Law Changes" for
a discussion of certain legislative proposals that, if adopted, could give rise
to a Tax Event, which may permit the Corporation to shorten the Stated Maturity
of the Series B Subordinated Debentures or cause a redemption of Series B
Capital Securities prior to January , 2007.
REGISTRATION OF SERIES B SUBORDINATED DEBENTURES
The Series B Subordinated Debentures will be registered in the name of the
Series B Issuer. In the event that the Series B Debentures are distributed to
holders of Series B Capital Securities, it is anticipated that the depositary
and other arrangements for the Series B Subordinated Debentures will be
substantially identical to those in effect for the Series B Capital Securities
as applicable. See "Certain Terms of Series B Capital Securities -- Registration
of Series B Capital Securities."
CERTAIN TERMS OF SERIES B GUARANTEE
The Series B Guarantee guarantees to the holders of the Series B Securities
the following payments, to the extent not paid by the Series B Issuer: (i) any
accumulated and unpaid Distributions required to be paid on the Series B
Securities, to the extent that the Series B Issuer has funds on hand available
therefor at such time, (ii) the Redemption Price with respect to any Series B
Securities called for redemption, to the extent that the Series B 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 B Issuer
(unless the Series B Subordinated Debentures are distributed to holders of the
Series B 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 B Issuer has funds on hand available therefor at such
time, and (b) the amount of assets of the Series B Issuer remaining available
for distribution to holders of the Series B Securities after payment of
creditors of the Series B Issuer as required by applicable law. The Series B
Guarantee
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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 Series B Guarantee for the benefit of the
holders of the Series B Securities. The Bank of New York will also act as
Debenture Trustee for the Series B Subordinated Debentures and as Property
Trustee.
The holders of not less than a majority in aggregate Liquidation Amount of
the Series B 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 B Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee under the Series B Guarantee. Any holder of
the Series B Securities may institute a legal proceeding directly against the
Corporation to enforce its rights under the Series B Guarantee without first
instituting a legal proceeding against the Series B 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 B Subordinated Debentures,
the Series B Issuer would lack funds for the payment of Distributions or amounts
payable on redemption of the Series B Securities or otherwise, and, in such
event, holders of the Series B Capital Securities would not be able to rely upon
the Series B 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 or premium, if
any, on or principal of the Series B Subordinated Debentures on the applicable
payment date, then a holder of Series B 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 or premium, if any, on
such Series B Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Series B Capital 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 B Capital Securities in the Direct Action. Except as
described herein, holders of Series B Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Series B
Subordinated Debentures or assert directly any other rights in respect of the
Series B Subordinated Debentures. See "Description of Guarantees" in the
accompanying Prospectus. The Series B Trust Agreement provides that each holder
of Series B Securities by acceptance thereof agrees to the provisions of the
Series B Guarantee and the Indenture.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
In the opinion of Simpson Thacher & Bartlett, special tax counsel to the
Corporation and the Series B 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 B
Capital Securities. Unless otherwise stated, this summary deals only with Series
B Capital Securities held as capital assets by United States Persons (defined
below) who purchase the Series B Capital Securities upon original issuance at
their original offering price. 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) any trust if a court within the United States
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-
S-25
<PAGE> 27
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 B Capital Securities. 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 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 presented
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 B
CAPITAL SECURITIES, 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 B
CAPITAL SECURITIES UPON THE OCCURRENCE OF CERTAIN TAX EVENTS SEE "DESCRIPTION OF
SERIES B CAPITAL SECURITIES -- "REDEMPTION."
CLASSIFICATION OF THE SERIES B ISSUER
In connection with the issuance of the Series B Capital Securities, 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 B 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 B
Capital Securities (a "Securityholder") will be treated as owning an undivided
beneficial interest in the Series B 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 B Subordinated Debentures. See "-- Interest Income and Original
Issue Discount."
CLASSIFICATION OF THE SERIES B SUBORDINATED DEBENTURES
The Corporation, the Series B Issuer and the holders of the Series B
Securities (by acceptance of a beneficial interest in a Series B Security) will
agree to treat the Series B Subordinated Debentures as indebtedness for all
United States tax purposes. In connection with the issuance of the Series B
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 B Subordinated Debentures will be classified as indebtedness
for United States federal income tax purposes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under the applicable Treasury regulations, the Series B 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.
Accordingly, except as set forth below, stated interest on the Series B
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.
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<PAGE> 28
If, however, the Corporation exercises its right to defer payments of
interest on the Series B Subordinated Debentures, the Series B Subordinated
Debentures will become OID instruments at such time and all Securityholders will
be required to accrue the stated interest on the Series B 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 B 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 B 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 B Subordinated Debentures, and actual cash payments of
interest on the Series B 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 B Capital Securities, and the amount of
Distributions received by a Securityholder with respect to such Series B Capital
Securities will reduce the tax basis of such Series B Capital Securities.
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 B Subordinated Debentures was OID regardless of
whether the Corporation exercises its right to defer payments of interest on
such 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 B
Capital Securities.
DISTRIBUTION OF SERIES B SUBORDINATED DEBENTURES TO HOLDERS OF SERIES B CAPITAL
SECURITIES
Under current law, a distribution by the Series B Issuer of the Series B
Subordinated Debentures as described under the caption "Certain Terms of Series
B Capital Securities -- Liquidation of Series B Issuer and Distribution of
Series B Subordinated Debentures to Holders" will be non-taxable and will result
in the Securityholder receiving directly its pro rata share of the Series B
Subordinated Debentures previously held indirectly through the Series B Issuer,
with a holding period and aggregate tax basis equal to the holding period and
aggregate tax basis such Securityholder had in its Series B Capital Securities
before such distribution. If, however, the liquidation of the Series B Issuer
were to occur because the Series B Issuer is subject to United States federal
income tax with respect to income accrued or received on the Series B
Subordinated Debentures as a result of a Tax Event or otherwise, the
distribution of Series B Subordinated Debentures to Securityholders by the
Series B Issuer could be a taxable event to the Series B Issuer and each
Securityholder, and a Securityholder would recognize gain or loss as if the
Securityholder had exchanged its Series B Capital Securities for the Series B
Subordinated Debentures it received upon the liquidation of the Series B Issuer.
A Securityholder will accrue interest in respect of Series B Subordinated
Debentures received from the Series B Issuer in the manner described above under
"-- Interest Income and Original Issue Discount."
SALES OR REDEMPTION OF SERIES B CAPITAL SECURITIES
Gain or loss will be recognized by a Securityholder on a sale of Series B
Capital Securities (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 B Capital Securities (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 B Subordinated
Debentures that such
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<PAGE> 29
Securityholder had not included in income previously) and the Securityholder's
adjusted tax basis in the Series B Capital Securities sold or redeemed. Such
gain or loss generally will be taxable as long-term capital gain or loss if the
Securityholder held the Series B Capital Securities 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.
NON-UNITED STATES HOLDERS
As used herein, the term "Non-United States Holder" means any
Securityholder that is not a United States Person. As discussed above, the
Series B Capital Securities will be treated as evidence of an indirect
beneficial ownership interest in the Series B Subordinated Debentures. See
"-- Classification of the Trust." Thus, under present United States federal
income tax law, and subject to the discussion below concerning backup
withholding:
(a) no withholding of United States federal income tax will be
required with respect to the payment by the Series B Issuer (or the
Corporation) or any paying agent of principal or interest (which for
purposes of this discussion includes any OID) on the Series B Capital
Securities (or this Series B Subordinated Debentures) to a Non-United
States Holder, provided (i) that the beneficial owner of the Series B
Capital Securities ("Beneficial Owner") does not actually or constructively
own 10% or more of the total combined voting power of all classes of stock
of the Corporation entitled to vote within the meaning of section 871(h)(3)
of the Code and the regulations thereunder, (ii) the Beneficial Owner is
not a controlled foreign corporation that is related to the Corporation
through stock ownership, (iii) the Beneficial Owner is not a bank whose
receipt of interest on the Series B Subordinated Debentures is described in
section 881(c)(3)(A) of the Code and (iv) the Beneficial Owner satisfies
the statement requirement (described generally below) set forth in section
871(h) and section 881(c) of the Code and the regulations thereunder; and
(b) no withholding of United States federal income tax will be
required with respect to any gain realized by a Non-United States Holder
upon the sale or other disposition of the Series B Capital Securities (or
the Series B Subordinated Debentures).
To satisfy the requirement referred to in (a)(iv) above, the Beneficial
Owner, or a financial institution holding the Series B Capital Securities on
behalf of such owner, must provide, in accordance with specified procedures, to
the Series B Issuer or its paying agent, a statement to the effect that the
Beneficial Owner is not a United States Person. Pursuant to current temporary
Treasury regulations, these requirements will be met if (1) the Beneficial Owner
provides his name and address, and certifies, under penalties of perjury, that
it is not a United States Person (which certification may be made on an IRS Form
W-8 (or successor form)) or (2) a financial institution holding the Series B
Capital Securities on behalf of the Beneficial Owner certifies, under penalties
of perjury, that such statement has been received by it and furnishes the Series
B Issuer or the paying agent with a copy thereof.
If a Non-United States Holder cannot satisfy the requirements of the
"portfolio interest" exception described in (a) above, payments of interest made
to such Non-United States Holder will be subject to a 30% United States federal
withholding tax unless the Beneficial Owner provides the Series B Issuer or its
paying agent, as the case may be, with a properly executed (1) IRS Form 1001 (or
a successor form) claiming an exemption from, or a reduction of, such
withholding tax under the benefit of a tax treaty or (2) IRS Form 4224 (or a
successor form) stating that interest paid on the Series B Capital Securities
(or the Series B Subordinated Debentures) is not subject to such withholding tax
because it is effectively connected with the Beneficial Owner's conduct of a
trade or business in the United States.
As discussed below, legislation was introduced in the 104th Congress that
would have affected the characterization of interest payable on the Series B
Subordinated Debentures, and would have adversely affected Non-United States
Holders by characterizing income derived from the Series B
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<PAGE> 30
Subordinated Debentures as dividends which generally would be subject to a 30%
United States federal withholding tax when paid to a Non-United States Holder.
The 104th Congress adjourned without enacting such legislation. However, it is
possible that legislation could be enacted in the future that could affect the
characterization of income paid on the Series B Subordinated Debentures. See
"--Possible Tax Law Changes".
If a Non-United States Holder is engaged in a trade or business in the
United States and interest on the Series B Capital Securities (or the Series B
Subordinated Debentures) is effectively connected with the conduct of such trade
or business, the Non-United States Holder, although exempt from the withholding
tax discussed above, will be subject to United States federal income tax on such
interest on a net income basis in the same manner as if it were a United States
Person. In addition, if such Non-United States Holder is a foreign corporation,
it may be subject to a branch profits tax equal to 30% of its effectively
connected earnings and profits for the taxable year, subject to adjustments. For
this purpose, such interest income would be included in such foreign
corporation's earnings and profits.
Any gain realized upon the sale or other disposition of the Series B
Capital Securities (or the Series B Subordinated Debentures) generally will not
be subject to United States federal income tax unless (i) such gain is
effectively connected with a United States trade or business of the Non-United
States Holder, (ii) in the case of a Non-United States Holder who is an
individual, such individual is present in the United States for 183 days or more
in the taxable year of such sale, exchange or retirement, and certain other
conditions are met, or (iii) in the case of any gain representing accrued
interest on the Series B Subordinated Debentures, the requirements described
above are not satisfied.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of OID accrued on the Series B Capital Securities held of record
by United States Persons (other than corporations and other exempt
Securityholders), if any, will be reported to the IRS. "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 B Capital Securities
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 IRS.
It is anticipated that income on the Series B Capital Securities will be
reported to holders on Form 1099 and mailed to holders of the Series B Capital
Securities by January 31 following each calendar year.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
introduced in the 104th Congress which would have, among other things, generally
denied 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. This provision of
the Bill was proposed to be effective generally for
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<PAGE> 31
instruments issued on or after December 7, 1995. If this provision were to apply
to the Series B Subordinated Debentures, the Corporation would not be able to
deduct interest on the Series B Subordinated Debentures. However, on March 29,
1996, the Chairmen of the Senate Finance and House Ways and Means Committees
issued the Joint Statement to the effect that it was their intention that the
effective date of the Bill, if enacted, 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 the Democrat letters to Treasury Department
officials concurring with the view expressed in the Joint Statement. The 104th
Congress adjourned without enacting the Bill. Moreover, if the principles
contained in the Joint Statement and the Democrat Letters were followed any
similar legislation in this area that is subsequently proposed would not apply
to the Series B Subordinated Debentures. Although the 104th Congress adjourned
without enacting the Bill, there can be no assurance that current or future
legislative proposals or final legislation will not adversely affect the ability
of the Corporation to deduct interest on the Series B 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, to shorten the maturity of the Series
B Subordinated Debentures to a date not earlier than January , 2017, or to
cause a redemption of the Series B Capital Securities before January , 2007.
See "Certain Terms of Series B Subordinated Debentures -- Conditional Right to
Shorten Maturity or Redeem upon a Tax Event or Capital Treatment Event", and
"-- Redemption" in the Prospectus Supplement and "Description of Preferred
Securities -- Redemption or Exchange -- Tax Event or Capital Event Redemption"
in the accompanying Prospectus.
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an investment
in the Series B Capital Securities. Accordingly, among other factors, the
fiduciary should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA and would be consistent with the documents
and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well
as individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or "disqualified
persons" under the Code ("Parties in Interest") with respect to such Plan. A
violation of these "prohibited transaction" rules may result in an excise tax or
other liabilities under ERISA and/or Section 4975 of the Code for such persons,
unless exemptive relief is available under an applicable statutory or
administrative exemption. Employee benefit plans that are governmental plans (as
defined in Section 3(32) of ERISA), certain church plans (as defined in Section
3(33) of ERISA) and foreign plans (as described in Section 4(b)(5) of ERISA) are
not subject to the requirements of ERISA or Section 4975 of the Code;
governmental plans may be subject to similar provisions under applicable state
laws.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the Series B Issuer would be
deemed to be "plan assets" of a Plan for purposes of ERISA and Section 4975 of
the Code if "plan assets" of the Plan were used to acquire an equity interest in
the Series B Issuer and no exception were applicable under the Plan Assets
Regulation. An "equity interest" is defined under the Plan Assets Regulation as
any interest in an entity other than an instrument which is treated as
indebtedness under applicable local law and which has no substantial equity
features and specifically includes a beneficial interest in a trust.
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Pursuant to an exception contained in the Plan Assets Regulation, the
assets of the Series B Issuer would not be deemed to be "plan assets" of
investing Plans if, immediately after the most recent acquisition of any equity
interest in the Series B Issuer, less than 25% of the value of each class of
equity interests in the Series B Issuer were held by Plans, other employee
benefit plans not subject to ERISA or Section 4975 of the Code (such as
governmental, church and foreign plans), and entities holding assets deemed to
be "plan assets") of any Plan (collectively, "Benefit Plan Investors"), or if
the Series B Capital Securities were "publicly-offered securities" for purposes
of the Plan Assets Regulation. No assurance can be given that the Series B
Capital Securities held by Benefit Plan Investors will be less than 25% of the
total value of such Series B Capital Securities at the completion of the initial
offering or thereafter, and no monitoring or other measures will be taken with
respect to the satisfaction of the conditions to this exception. In addition, no
assurance can be given that the Series B Capital Securities would be considered
to be "publicly-offered securities" under the Plan Assets Regulation. All of the
Series B Common Securities will be purchased and initially held by the
Corporation.
Certain transactions involving the Series B Issuer could be deemed to
constitute direct or indirect prohibited transactions under ERISA and Section
4975 of the Code with respect to a Plan if the Series B Capital Securities were
acquired with "plan assets" of such Plan and the assets of the Series B Issuer
were deemed to be "plan assets" of Plans investing in the Series B Issuer. For
example, if the Corporation were a Party in Interest with respect to a Plan
(either directly or by reason of its ownership of the Bank or other
subsidiaries), extensions of credit between the Corporation and the Series B
Issuer (as represented by the Series B Subordinated Debentures and the Series B
Guarantee) would likely be prohibited by Section 406(a)(1)(B) of ERISA and
Section 4975(c)(1)(B) of the Code, unless exemptive relief were available under
an applicable administrative exemption (see below). In addition, if the
Corporation were considered to be a fiduciary with respect to the Series B
Issuer as a result of certain powers it holds (such as the powers to remove and
replace the Property Trustee and the Administrative Trustees). It is possible
that the optional redemption or acceleration of the Series B Subordinated
Debentures would be considered to be prohibited transactions under Section
406(b) of ERISA and Section 4975(c)(1)(E) of the Code. In order to avoid such
prohibited transactions, each investing plan, by purchasing Series B Capital
Securities, will be deemed to have directed the Series B Issuer to invest in the
Series B Subordinated Debentures and to have appointed the Property Trustee.
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief if required for direct or indirect prohibited
transactions that may arise from the purchase or holding of the Series B Capital
Securities if assets of the Series B Issuer were deemed to be "plan assets" of
Plans investing in the Series B Issuer as described above. Those class
exemptions are PTCE 96-23 (for certain transactions determined by in-house asset
managers). PTCE 95-60 (for certain transactions involving insurance company
general accounts), PTCE 91-38 (for certain transactions involving bank
collective investment funds), PTCE 90-1 (for certain transactions involving
insurance company separate accounts), and PTCE 84-14 (for certain transactions
determined by independent qualified asset managers).
Because the Series B Capital Securities may be deemed to be equity
interests in the Series B Issuer for purposes of applying ERISA and Section 4975
of the Code, the Series B Capital Securities may not be purchased or held by any
Plan, any entity whose underlying assets include "plan assets" by reason of any
Plan's investment in the entity (a "Plan Asset Entity") or any person investing
"plan assets" of any Plan, unless such purchaser or holder is eligible for the
exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or
another applicable exemption. Any purchaser or holder of the Series B Capital
Securities or any interest therein will be deemed to have represented by its
purchase and holding thereof that it either (a) is not a Plan or a Plan Asset
Entity and is not purchasing such securities on behalf of or with "plan assets"
of any Plan or (b) is eligible for the exemptive relief available under PTCE
96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable exemption with respect
to such purchase or holding. If a purchaser or holder of the
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Series B Capital Securities that is a Plan or a Plan Asset Entity elects to rely
on an exemption other than PTCE 96-23, 95-60, 91-38, 90-1 or 84-14, the
Corporation and the Series B Issuer may require a satisfactory opinion of
counsel or other evidence with respect to the availability of such exemption for
such purchase and holding.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions; it is particularly
important that fiduciaries or other persons considering purchasing the Series B
Capital Securities on behalf of or with "plan assets" of any Plan consult with
their counsel regarding the potential consequences if the assets of the Series B
Issuer were deemed to be "plan assets" and the availability of exemptive relief
under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or any other applicable exemption.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Corporation and the Series B Issuer have agreed that the Series B
Issuer will sell to each of the Underwriters named below, and each of such
Underwriters, for whom Goldman, Sachs & Co., are acting as
representatives (the "Representatives"), has severally agreed to purchase from
the Series B Issuer, the respective number of Series B Capital Securities set
forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER
OF
SERIES B
CAPITAL
NAME SECURITIES
--------------------------------------------------------------- --------
<S> <C>
Goldman, Sachs & Co.
--------
Total................................................
=========
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Series B Capital
Securities if any are taken.
The Underwriters propose initially to offer the Series B Capital Securities
in part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus Supplement and in part to certain securities
dealers at such price less a concession not in excess of $ per Series B
Capital Security. The Underwriters may allow, and such dealers may reallow, a
concession not to exceed $ per Series B Capital Security to certain brokers
and dealers. After the Series B Capital Securities are released for sale to the
public, the initial public offering price and other selling terms may from time
to time be varied by the Underwriters.
In view of the fact that the proceeds from the sale of the Series B Capital
Securities will be used to purchase the Series B 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 B Capital
Security for the accounts of the several Underwriters.
Because the National Association of Securities Dealers, Inc. ("NASD") is
expected to view the Series B Capital Securities offered hereby as interests in
a direct participation program, the offering is being made in compliance with
Rule 2810 of the NASD's Conduct Rules. Offers and sales of Series B Capital
Securities will be made only to (i) "qualified institutional buyers", as defined
in
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Rule 144A under the Securities Act of 1933, as amended (the "Act"); (ii)
institutional "accredited investors", as defined in Rule 501(a)(1)-(3) of
Regulation D under the Act or (iii) individual "accredited investors", as
defined in Rule 501(a)(4)-(6) of Regulation D under the Act, for whom an
investment in non-convertible investment grade preferred securities is
appropriate. The Underwriters may not confirm sales to any accounts over which
they exercise discretionary authority without the prior written approval of the
transaction by the customer.
The Corporation and the Series B 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 B Capital Securities, as determined by the Representatives, and (ii) 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 B Issuer, or any preferred securities or any other securities of the
Series B Issuer or the Corporation which are substantially similar to the Series
B Capital Securities, 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 B Issuer or the Corporation, without the prior written consent
of the Underwriters, except for the Series B Capital Securities offered in
connection with this offering.
The Series B Capital Securities are a new issue of securities with no
established trading market. The Series B Issuer does not intend to apply for
listing of the Series B Capital Securities on a national securities exchange,
but has been advised by the Underwriters that they presently intend to make a
market in the Series B Capital Securities as permitted by applicable laws and
regulations. The Underwriters are not obligated, however, to make a market in
the Series B Capital Securities and any such market making may be discontinued
at any time at the sole discretion of the Underwriters. Accordingly, no
assurance can be given as to the liquidity of, or trading markets for, the
Series B Capital Securities.
The Corporation and the Series B 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.
Chase Securities Inc., one of the Representatives, is a wholly owned
subsidiary of the Corporation. The underwriting arrangements for this offering
comply with the requirements of Rule 2720 of the Conduct Rules of the NASD
regarding an NASD member firm's underwriting securities of an affiliate. In
accordance with Rule 2720, no Underwriter may make sales in this offering to any
discretionary account without the prior written approval of the customer. This
Prospectus Supplement and the related Prospectus may be used by direct or
indirect wholly owned subsidiaries of the Corporation, including Chase
Securities Inc., in connection with offers and sales related to secondary market
transactions in the Series B Capital Securities. Such subsidiaries may act as
principal or agent in such transactions. Such sales will be made at prices
related to prevailing market prices at the time of sale.
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.
S-33
<PAGE> 35
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Series B
Capital Securities, the enforceability of the Series B Trust Agreement and the
formation of the Series B Issuer will be passed upon by Richards, Layton &
Finger, special Delaware counsel to the Corporation and the Series B Issuer. The
validity of the Series B Guarantee and the Series B 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-34
<PAGE> 36
$500,000,000
THE CHASE MANHATTAN CORPORATION
JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES
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 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 January , 1997.
<PAGE> 37
(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 million. 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.
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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
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<PAGE> 39
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,
October 15, 1996 and December 17, 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.
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.
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<PAGE> 40
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 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
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<PAGE> 41
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.
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
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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 Subordinated 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,
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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.
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
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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 which may include the account of
Morgan Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System ("Euroclear"), and CEDEL Bank, societe anonyme ("Cedel")
("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 including CEDEL and Euroclear and their
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 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
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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 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.
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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 $1,000 may be redeemed in part but only in integral multiples of $1,000.
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 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
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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 that was entered into prior to the commencement of such
Extension Period) 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.
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
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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.
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
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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."
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
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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 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.
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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 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.
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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 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
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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 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
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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, (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
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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 that was entered into prior to the
commencement of such Extension Period).
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 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.
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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"), was introduced in the 104th Congress which would
have, among other things, generally denied 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. This
provision of the Bill was proposed to be effective generally for instruments
issued on or after December 7, 1995. If this 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 Bill, if enacted, 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"). The 104th Congress adjourned without enacting the
Bill. Moreover, if the principles contained in the Joint Statement and the
Democrat Letters were followed, any similar legislation in this area that is
subsequently proposed would not apply to the Junior Subordinated Debentures.
Although the 104th Congress adjourned without enacting the Bill, there can be no
assurance 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 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
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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 $1,000 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 The Depository Trust Company ("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 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
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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 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.
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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 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.
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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 ten 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.
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.
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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 or as otherwise described in the Trust Agreement. 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, 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 substantially 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
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"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 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
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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
Securities to the accounts of Participants, which may include Euroclear and
Cedel. 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 including
Euroclear and Cedel. 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.
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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 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 $1,000 and
integral multiples thereof.
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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 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.
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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 the Property
Trustee as custodian for 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,
including Euroclear and Cedel. 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.
Transfers between Participants will be effected in accordance with DTC's
procedures and will be settled in same-day funds. Transfers between participants
in Euroclear and Cedel will be effected in the ordinary way in accordance with
their respective rules and operating procedures.
Cross-market transfers between Participants, on the one hand, and Euroclear
participants or Cedel participants, on the other hand, will be effected in DTC
in accordance with DTC's rules on behalf of Euroclear or Cedel, as the case may
be, by its respective depositary; however, such cross-market transactions will
require delivery of instructions to Euroclear or Cedel, as the case may be, by
the counterparty in such system in accordance with the rules and procedures and
within the established deadlines (Brussels time) of such system. Euroclear or
Cedel, as the case may be, will, if the transaction meets its settlement
requirements, deliver instructions to its respective depositary to take action
to effect final settlement on its behalf by delivering or receiving interests in
the
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Preferred Securities or the Junior Subordinated Debentures in DTC, and making or
receiving payment in accordance with normal procedures for same-day funds
settlement applicable to DTC. Euroclear participants and Cedel participants may
not deliver instructions directly to the depositaries for Euroclear or Cedel.
Because of time zone differences, the securities account of a Euroclear or
Cedel participant purchasing an interest in a Preferred Security or Junior
Subordinated Debenture from a Participant in DTC will be credited, and any such
crediting will be reported to the relevant Euroclear participant or Cedel
participant, during the securities settlement processing day (which must be a
business day for Euroclear and Cedel, as the case may be) immediately following
the DTC settlement date. Cash received in Euroclear or Cedel as a result of
sales of interests in a Preferred Security or Junior Subordinated Debenture by
or through a Euroclear or Cedel participant to a Participant in DTC will be
received with value on the DTC settlement date but will be available in the
relevant Euroclear or Cedel cash account only as of the business day for
Euroclear or Cedel following the DTC settlement date.
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 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
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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.
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 and Common
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 and Common 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 Trust 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 Trust
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 Trust 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 Trust Securities or by
causing the Issuer to pay such amounts to such holders.
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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 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 Guaran-
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tee 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.
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.
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
35
<PAGE> 71
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 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
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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, after satisfaction of liabilities to creditors of such Issuer as
required by applicable law, the holders of the related Preferred Securities will
be entitled to receive, out of the assets held by such Issuer, the Liquidation
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.
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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.
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.
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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......... $151,515.15
Blue Sky fees and expenses (including counsel fees)................... 15,000.00
NASD fee.............................................................. 30,500.00
Fees of rating agencies............................................... 200,000.00
Trustees' fee and expenses............................................ 20,000.00
Printing and engraving................................................ 60,000.00
Accounting services................................................... 25,000.00
Legal fees of Registrant's counsel.................................... 100,000.00
Miscellaneous......................................................... 47,984.85
----------
Total....................................................... $650,000.00
==========
</TABLE>
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* 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.
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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 Trustees 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.
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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).
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. (incorporated by reference to Exhibit 4.5 to the Registration Statement on
Form S-3 (File No. 333-14959) of The Chase Manhattan Corporation).
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> 77
<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 (incorporated by
reference to Exhibit 4.12 to the Registration Statement on Form S-3 (File No. 333-
14959) of The Chase Manhattan Corporation).
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 (incorporated by reference to Exhibit
4.18 to the Registration Statement on Form S-3 (File No. 333-14959) of The Chase
Manhattan Corporation).
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 (incorporated by reference to Exhibit
4.20 to the Registration Statement on Form S-3 (File No. 333-14959) of The Chase
Manhattan Corporation).
</TABLE>
II-4
<PAGE> 78
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
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 (incorporated by
reference to Exhibit 4.22 to the Registration Statement on Form S-3 (File No. 333-
14959) of The Chase Manhattan Corporation).
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 (incorporated by
reference to Exhibit 4.23 to the Registration Statement on Form S-3 (File No. 333-
14959) of The Chase Manhattan Corporation).
*4.24 Junior Subordinated Indenture, dated December 1, 1996, between The Chase Manhattan
Corporation and The Bank of New York, as Debenture Trustee.
4.25 Restated Certificate of Trust of Chase Capital II (incorporated by reference to
Exhibit 4.27 to the Registration Statement on Form S-3 (File No. 333-14959) of The
Chase Manhattan Corporation).
4.26 Trust Agreement of Chase Capital II (incorporated by reference to Exhibit 4.28 to
the Registration Statement on Form S-3 (File No. 333-14959) of The Chase Manhattan
Corporation).
4.27 Restated Certificate of Trust of Chase Capital III (incorporated by reference to
Exhibit 4.29 to the Registration Statement on Form S-3 (File No. 333-14959) of The
Chase Manhattan Corporation).
4.28 Trust Agreement of Chase III (incorporated by reference to Exhibit 4.30 to the
Registration Statement on Form S-3 (File No. 333-14959) of The Chase Manhattan
Corporation).
*4.29 Form of Amended and Restated Trust Agreement of Chase Capital II.
*4.30 Form of Amended and Restated Trust Agreement of Chase Capital III.
4.31 Form of Preferred Security Certificate for Chase Capital II (included as Exhibit D
of Exhibit 4.29).
4.32 Form of Preferred Security Certificate for Chase Capital III (included as Exhibit
D of Exhibit 4.30).
*4.33 Form of Guarantee Agreement for Chase Capital II.
*4.34 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 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)).
</TABLE>
II-5
<PAGE> 79
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
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 (incorporated by reference to Exhibit 25.1 to
the Registration Statement on Form S-3 (File No. 333-14959) of The Chase Manhattan
Corporation).
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 II (incorporated herein
by reference to Exhibit 25.3 to the Registration Statement on Form S-3 (File No.
333-14959) of The Chase Manhattan Corporation).
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 III (incorporated herein
by reference to Exhibit 25.4 to the Registration Statement on Form S-3 (File No.
333-14959) of The Chase Manhattan Corporation).
25.4 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
(incorporated herein by reference to Exhibit 25.6 to the Registration Statement on
Form S-3 (File No. 333-14959) of The Chase Manhattan Corporation).
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 III
(incorporated herein by reference to Exhibit 25.7 to the Registration Statement on
Form S-3 (File No. 333-14959) of The Chase Manhattan Corporation).
</TABLE>
- ---------------
* 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
II-6
<PAGE> 80
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% 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> 81
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
No. 1 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 15th day of January, 1997.
THE CHASE MANHATTAN CORPORATION
By: ANTHONY J. HORAN
--------------------------------------
Corporate Secretary
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------- ----------------------------------- -------------------
<C> <S> <C>
* Chairman of the Board, Chief January 15, 1997
Executive Officer and Director
- ------------------------------- (Principal Executive Officer)
Walter V. Shipley
* President, Chief Operating Officer January 15, 1997
and Director
- -------------------------------
Thomas G. Labrecque
* Senior Vice Chairman of the Board January 15, 1997
- ------------------------------- and Director
Edward D. Miller
* Vice Chairman of the Board and January 15, 1997
Director
- -------------------------------
William B. Harrison, Jr.
* Director January 15, 1997
- -------------------------------
Frank A. Bennack, Jr.
* Director January 15, 1997
- -------------------------------
Susan V. Berresford
* Director January 15, 1997
- -------------------------------
M. Anthony Burns
* Director January 15, 1997
- -------------------------------
H. Laurance Fuller
* Director January 15, 1997
- -------------------------------
Melvin R. Goodes
</TABLE>
II-8
<PAGE> 82
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------- ----------------------------------- -------------------
<C> <S> <C>
* Director January 15, 1997
- -------------------------------
William H. Gray III
* Director January 15, 1997
- -------------------------------
George V. Grune
* Director January 15, 1997
- -------------------------------
Harold S. Hook
* Director January 15, 1997
- -------------------------------
Helene L. Kaplan
* Director January 15, 1997
- -------------------------------
J. Bruce Llewellyn
* Director January 15, 1997
- -------------------------------
Edmund T. Pratt, Jr.
* Director January 15, 1997
- -------------------------------
Henry B. Schacht
* Director January 15, 1997
- -------------------------------
Andrew C. Sigler
* Director January 15, 1997
- -------------------------------
John R. Stafford
* Director January 15, 1997
- -------------------------------
Marina v.N. Whitman
* Chief Financial Officer January 15, 1997
(Principal Financial Officer)
- -------------------------------
Peter J. Tobin
* Controller January 15, 1997
(Principal Accounting Officer)
- -------------------------------
Joseph L. Sclafani
</TABLE>
- ---------------
* Anthony J. Horan hereby signs this Amendment No. 1 to the Registration
Statement on Form S-3 on January 15, 1997 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> 83
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 No. 1 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
15th day of January, 1997.
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 No. 1 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
15th day of January, 1997.
CHASE CAPITAL III
By: The Chase Manhattan Corporation,
as Depositor
By: Peter J. Tobin
--------------------------------------
II-10
<PAGE> 84
EXHIBIT INDEX
<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).
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 (incorporated by reference to Exhibit 4.5 to the Registration Statement on
Form S-3 (File No. 333-14959) of The Chase Manhattan Corporation).
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> 85
<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 (incorporated by
reference to Exhibit 4.12 to the Registration Statement on Form S-3 (File No. 333-
14959) of The Chase Manhattan Corporation).
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 (incorporated by reference to Exhibit
4.18 to the Registration Statement on Form S-3 (File No. 333-14959) of The Chase
Manhattan Corporation).
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 (incorporated by reference to Exhibit
4.20 to the Registration Statement on Form S-3 (File No. 333-14959) of The Chase
Manhattan Corporation).
</TABLE>
<PAGE> 86
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
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 (incorporated by
reference to Exhibit 4.22 to the Registration Statement on Form S-3 (File No. 333-
14959) of The Chase Manhattan Corporation).
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 (incorporated by
reference to Exhibit 4.23 to the Registration Statement on Form S-3 (File No. 333-
14959) of The Chase Manhattan Corporation).
*4.24 Junior Subordinated Indenture, dated December 1, 1996, between The Chase Manhattan
Corporation and The Bank of New York, as Debenture Trustee.
4.25 Restated Certificate of Trust of Chase Capital II (incorporated by reference to
Exhibit 4.27 to the Registration Statement on Form S-3 (File No. 333-14959) of The
Chase Manhattan Corporation).
4.26 Trust Agreement of Chase Capital II (incorporated by reference to Exhibit 4.28 to
the Registration Statement on Form S-3 (File No. 333-14959) of The Chase Manhattan
Corporation).
4.27 Restated Certificate of Trust of Chase Capital III (incorporated by reference to
Exhibit 4.29 to the Registration Statement on Form S-3 (File No. 333-14959) of The
Chase Manhattan Corporation).
4.28 Trust Agreement of Chase III (incorporated by reference to Exhibit 4.30 to the
Registration Statement on Form S-3 (File No. 333-14959) of The Chase Manhattan
Corporation).
*4.29 Form of Amended and Restated Trust Agreement of Chase Capital II.
*4.30 Form of Amended and Restated Trust Agreement of Chase Capital III.
4.31 Form of Preferred Security Certificate for Chase Capital II (included as Exhibit D
of Exhibit 4.29).
4.32 Form of Preferred Security Certificate for Chase Capital III (included as Exhibit
D of Exhibit 4.30).
*4.33 Form of Guarantee Agreement for Chase Capital II.
*4.34 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 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)).
</TABLE>
<PAGE> 87
<TABLE>
<CAPTION>
EXHIBIT
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<C> <S>
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 (incorporated by reference to Exhibit 25.1 to
the Registration Statement on Form S-3 (File No. 333-14959) of The Chase Manhattan
Corporation).
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 II (incorporated herein
by reference to Exhibit 25.3 to the Registration Statement on Form S-3 (File No.
333-14959) of The Chase Manhattan Corporation).
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 III (incorporated herein
by reference to Exhibit 25.4 to the Registration Statement on Form S-3 (File No.
333-14959) of The Chase Manhattan Corporation).
25.4 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
(incorporated herein by reference to Exhibit 25.6 to the Registration Statement on
Form S-3 (File No. 333-14959) of The Chase Manhattan Corporation).
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 III
(incorporated herein by reference to Exhibit 25.7 to the Registration Statement on
Form S-3 (File No. 333-14959) of The Chase Manhattan Corporation).
</TABLE>
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* Previously filed.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of The Chase Manhattan Corporation (the "Corporation"),
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
January 15, 1997
