<PAGE>
As filed with the Securities and Exchange Commission on July 3, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
<S> <C> <C>
DONALDSON, LUFKIN & JENRETTE, INC. DELAWARE 13-1898818
DLJ CAPITAL TRUST I DELAWARE 13-7093229
DLJ CAPITAL TRUST II DELAWARE 13-7093230
CAPITAL TRUST III DELAWARE 13-7093231
DLJ CAPITAL TRUST IV DELAWARE 13-7093232
(Exact name of Registrant as (State or other jurisdiction of (I.R.S. employer
specified in its charter) incorporation or organization) identification number)
</TABLE>
277 PARK AVENUE
NEW YORK, NEW YORK 10172
(212) 892-3000
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
MICHAEL A. BOYD
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
DONALDSON, LUFKIN & JENRETTE, INC.
277 PARK AVENUE
NEW YORK, NEW YORK 10172
(212) 892-3000
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
COPIES TO:
JEFFREY SMALL
RICHARD D. TRUESDELL, JR.
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this 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, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [ ]
- ------
If this Form is a post-effective amendment filed pursuant to rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- -----
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED PRICE(1) FEE
- ------------------------------------------------------- ------------------------- ----------------
<S> <C> <C>
Senior debt securities, subordinated debt securities
and junior subordinated debt securities (collectively,
"Debt Securities") of Donaldson, Lufkin &
Jenrette, Inc. ........................................
- ------------------------------------------------------- ------------------------- ----------------
Preferred Stock of Donaldson, Lufkin &
Jenrette, Inc. ("Preferred Stock") .................... $500,000,000(2)(3)(4) $172,414
- ------------------------------------------------------- ------------------------- ----------------
Preferred Securities of DLJ Capital Trust I, II, III
and IV, severally ("Preferred Securities") ............
- ------------------------------------------------------- ------------------------- ----------------
Guarantees (the "Guarantees") of Preferred
Securities of DLJ Capital Trust I, II, III and IV by
Donaldson, Lufkin & Jenrette, Inc. (5) ................
- ------------------------------------------------------- -------------------------
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(o), exclusive of accrued interest and dividends,
if any.
(2) Such indeterminable number or amount of (i) Debt Securities and
Preferred Stock of Donaldson, Lufkin & Jenrette, Inc. as may from time
to time be issued at indeterminate prices or upon conversion or
exchange of securities so issued and (ii) Preferred Securities of DLJ
Capital Trust I, II, III and IV, as may from time to time be issued at
indeterminate prices. Junior Subordinated Debt Securities may be issued
and sold to DLJ Capital Trust I, II, III and IV, severally in which
event such Junior Subordinated Debt Securities may later be distributed
to the holders of Preferred Securities upon a dissolution of DLJ
Capital Trust I, II, III or IV and the distribution of the assets
thereof.
(3) Such amount in U.S. dollars or the equivalent in foreign denominated
currency or currency units or, if any Debt Securities are issued at
original issue discount, such greater amount as shall result in an
aggregate initial offering price of $500,000,000. The Prospectuses
herein cover $500,000,000 of securities.
(4) This Registration Statement also relates to offers and sales of Debt
Securities, Preferred Stock, Preferred Securities and Guarantees in
connection with market-making transactions by and through affiliates of
the registrant, including Donaldson, Lufkin & Jenrette Securities
Corporation.
(5) Donaldson, Lufkin & Jenrette, Inc. is also registering under this
registration statement all other obligations that it may have with
respect to Preferred Securities issued by DLJ Capital Trust I, II, III,
and IV. No separate consideration will be received for any Guarantee or
any other such obligations.
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, AS AMENDED OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two forms of Prospectuses to be used
in connection with offerings of the following securities: (1) debt securities
(both senior and subordinated) and preferred stock of Donaldson, Lufkin &
Jenrette, Inc. and (2) preferred securities of DLJ Capital Trust I, II, III
and IV, severally, junior subordinated debt securities of Donaldson, Lufkin &
Jenrette, Inc. and Guarantees by Donaldson, Lufkin & Jenrette, Inc. of
preferred securities issued by DLJ Capital Trust I, II, III and IV. Each
offering of securities made under this Registration Statement will be made
pursuant to one of these Prospectuses, with the specifications of the
securities offered thereby set forth in an accompanying Prospectus Supplement.
In addition, this Registration Statement contains separate prospectus pages
relating to certain market-making transactions in (1) the debt securities and
preferred stock of Donaldson, Lufkin & Jenrette, Inc. and (2) the preferred
securities of DLJ Capital Trust I, II, III and IV, the junior subordinated
debt securities of Donaldson, Lufkin & Jenrette, Inc. and Guarantees by
Donaldson, Lufkin & Jenrette, Inc. of preferred securities issued by DLJ
Capital Trust I, II, III and IV.
The complete Prospectus for the offering of the debt securities (both
senior and subordinated) and preferred stock of Donaldson, Lufkin & Jenrette,
Inc. follows immediately after this Explanatory Note, which is then
immediately followed by the complete Prospectus for the offering of the
preferred securities of DLJ Capital Trust I, II, III and IV, the junior
subordinated debt securities of Donaldson, Lufkin & Jenrette, Inc. and
Guarantees by Donaldson, Lufkin & Jenrette, Inc. of preferred securities
issued by DLJ Capital Trust I, II, III and IV. Following such Prospectuses are
certain portions of such Prospectuses relating to the market-making
transactions, which include an alternative front and back cover page, an
alternate "Use of Proceeds" section and an alternate "Plan of Distribution"
section. All other sections of the respective Prospectus for the initial sale
of the debt securities and preferred stock of Donaldson, Lufkin & Jenrette,
Inc. or the preferred securities of DLJ Capital Trust I, II, III and IV, the
junior subordinated debt securities of Donaldson, Lufkin & Jenrette, Inc. and
Guarantees by Donaldson, Lufkin & Jenrette, Inc. of preferred securities
issued by DLJ Capital Trust I, II, III and IV, are to be used in the
respective Prospectus relating to the market-making transactions.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
SUBJECT TO COMPLETION, DATED JULY 3, 1996
PROSPECTUS SUPPLEMENT
, 1996
(TO PROSPECTUS DATED , 1996)
PREFERRED SECURITIES
DLJ CAPITAL TRUST I
% PREFERRED TRUST SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
DONALDSON, LUFKIN & JENRETTE, INC.
The % Preferred Trust Securities (the "Preferred Securities") offered
hereby represent preferred undivided beneficial interests in the assets of
DLJ Capital Trust I, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"). Donaldson, Lufkin & Jenrette, Inc., a
Delaware corporation (the "Company"), will directly or indirectly own all the
common securities (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") representing common undivided beneficial
interests in the assets of the Trust. The Trust exists for the sole purpose
of issuing the Preferred Securities and Common Securities and investing the
proceeds thereof in an equivalent amount of % Junior Subordinated Debentures
due 2046 of the Company ("Junior Subordinated Debentures").
(continued on next page)
Application will be made to list the Preferred Securities on the New York
Stock Exchange, Inc. (the "NYSE"). If so approved, trading of the Preferred
Securities on the New York Stock Exchange is expected to commence within a 30
day period after the initial delivery of the Preferred Securities. See
"Underwriting."
SEE "RISK FACTORS" BEGINNING ON PAGE S-10 FOR A DISCUSSION OF CERTAIN
FACTORS RELATING TO THE PREFERRED SECURITIES THAT SHOULD BE CONSIDERED BY
INVESTORS, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH
PAYMENTS ON THE JUNIOR SUBORDINATED DEBENTURES AND THE PREFERRED SECURITIES
MAY BE DEFERRED AND THE RELATED FEDERAL INCOME TAX CONSEQUENCES.
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. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
INITIAL PUBLIC PROCEEDS TO DLJ
OFFERING UNDERWRITING CAPITAL TRUST I
PRICE(1) COMMISSION(2) (3)(4)
<S> <C> <C> <C>
Per Preferred Security $25.00 (3) $25.00
Total(5) ............... (3)
</TABLE>
(1) Plus accrued distributions, if any, from , 1996.
(2) The Company has 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 Preferred
Securities will be invested in Junior Subordinated Debentures, the
Company has agreed to pay to the Underwriters as compensation
("Underwriters' Compensation") for their arranging the investment
therein of such proceeds, $ per Preferred Security (or $ in the
aggregate); provided, that such compensation for sales of 10,000 or
more Preferred Securities to a single purchaser will be $ per
Preferred Security. Therefore, to the extent of such sales, the actual
amount of Underwriters' Compensation will be less than the aggregate
amount specified in the preceding sentence. See "Underwriting."
(4) Expenses of the offering which are payable by the Company are estimated
to be $ .
(5) The Trust and the Company have granted to the Underwriters an option,
exercisable within 30 days of the date hereof, to purchase up to
additional Preferred Securities at the Initial Public Offering Price
for the purpose of covering overallotments, if any. If such option is
exercised in full, the total Initial Public Offering Price,
Underwriting Commission and Proceeds to DLJ Capital Trust I will be
$ , $ and $ , respectively.
The Preferred Securities offered hereby are being offered by the several
Underwriters, subject to prior sale, when, as and if delivered to and
accepted by them and subject to various prior conditions, including their
rights to reject orders in whole or in part. See "Underwriting" herein. It is
expected that the Preferred Securities will be ready for delivery in
book-entry form only through the facilities of the Depository Trust Company
of New York on or about , 1996, against payment therefor in immediately
available funds.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
<PAGE>
(Continued from previous page)
The Preferred Securities and the Common Securities will rank pari passu
with each other and will have equivalent terms; provided that (i) if an Event
of Default (as defined herein) under the Declaration (as defined herein)
occurs and is continuing, the holders of Preferred Securities will have a
priority over holders of the Common Securities with respect to payments in
respect of distributions and payments upon liquidation, redemption or
otherwise and (ii) holders of Common Securities have the exclusive right
(subject to the terms of the Declaration) to appoint, replace or remove
Trustees (as defined in the accompanying Prospectus) and to increase or
decrease the number of Trustees.
Holders of the Preferred Securities will be entitled to receive cumulative
cash distributions at an annual rate of % of the liquidation amount of $25
per Preferred Security, accruing from the date of original issuance of the
Preferred Securities and payable monthly, in arrears, commencing on
("distributions"). Cash distributions in arrears for more than one month will
bear interest thereon at the rate per annum of % of the stated liquidation
amount of $25 per Preferred Security (to the extent permitted by applicable
law), compounded monthly. The term "distributions" as used herein includes
such cash distributions and any such interest payable unless otherwise
stated. The distribution rate and the distribution and other payment dates
for the Preferred Securities will correspond to the interest rate and the
interest and other payment dates on the Junior Subordinated Debentures
deposited in the Trust as trust assets. If principal or interest is not paid
on the Junior Subordinated Debentures, including as a result of the Company's
election to extend the interest payment period on the Junior Subordinated
Debentures as described below, the Trust will not make payments on the Trust
Securities. The Junior Subordinated Debentures provide that, so long as the
Company shall not be in default in the payment of interest on the Junior
Subordinated Debentures, the Company shall have the right to defer payments
of interest on the Junior Subordinated Debentures by extending the interest
payment period from time to time for a period not exceeding 60 consecutive
monthly interest periods (each, an "Extension Period"). No interest shall be
due and payable during an Extension Period and, as a consequence,
distributions on the Trust Securities will also be deferred, but at the end
of such Extension Period the Company shall pay all interest then accrued and
unpaid on the Junior Subordinated Debentures, together with interest thereon
at the rate specified for the Junior Subordinated Debentures to the extent
permitted by applicable law, compounded monthly ("Compounded Interest"). All
references herein to interest shall include Compounded Interest unless
otherwise stated. There could be multiple Extension Periods of varying
lengths throughout the term of the Junior Subordinated Debentures, not to
exceed 60 consecutive months or to cause any extension beyond the maturity of
the Junior Subordinated Debentures. During any such Extension Period, the
Company may not declare or pay dividends on, or redeem, purchase, acquire or
make a distribution or liquidation payment with respect to, any of its common
stock or preferred stock; provided that (i) the Company will be permitted to
pay accrued dividends upon the exchange or redemption of any series of
preferred stock of the Company as may be outstanding from time to time, in
accordance with the terms of such stock, and (ii) the foregoing will not
apply to any stock dividends paid by the Company. See "Risk Factors--Option
to Extend Interest Payment Period; Tax Impact of Extension"; "Description of
the Junior Subordinated Debentures--Interest" and "--Option to Extend
Interest Payment Period."
The payment of distributions out of moneys held by the Property Trustee
(as defined in the accompanying Prospectus) and payments on liquidation of
the Trust and the redemption of Preferred Securities, as set forth below, are
guaranteed by the Company on a subordinated basis as and to the extent
described herein (the "Preferred Securities Guarantee"). See "Description of
the Preferred Securities Guarantee" in the accompanying Prospectus. The
Preferred Securities Guarantee is a full and unconditional guarantee from the
time of issuance of the Preferred Securities, but the Preferred Securities
Guarantee covers distributions and other payments on the Preferred Securities
only if and to the extent that the Company has made a payment to the Property
Trustee of interest or principal on the Junior Subordinated Debentures
deposited in the Trust as trust assets. The obligations of the Company under
the Preferred Securities Guarantee are subordinate and junior in right of
payment to all other liabilities of the
S-2
<PAGE>
(Continued from previous page)
Company, including Junior Subordinated Debt Securities (as defined in the
accompanying Prospectus) and senior to all capital stock now or hereafter
issued by the Company and to any guarantee now or hereafter entered into by
the Company in respect of its capital stock. The obligations of the Company
under the Junior Subordinated Debentures are subordinate and junior in right
of payment to all present and future Senior Indebtedness (as defined in the
accompanying Prospectus) which aggregated $1.1 billion at March 31, 1996.
The Junior Subordinated Debentures are redeemable by the Company (in whole
or in part) from time to time, on or after , 2001 or at any time in
certain circumstances upon the occurrence of a Tax Event (as defined herein).
If the Company redeems Junior Subordinated Debentures, the Trust must redeem
Trust Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Junior Subordinated Debentures so redeemed
at $25 per Trust Security plus accrued and unpaid distributions thereon (the
"Redemption Price") to the date fixed for redemption. See "Description of the
Preferred Securities--Mandatory Redemption." The Preferred Securities will be
redeemed upon maturity of the Junior Subordinated Debentures. The Junior
Subordinated Debentures mature on , 2046. In addition, upon the
occurrence of a Special Event (as defined herein) arising from a change in
law or a change in legal interpretation, unless the Junior Subordinated
Debentures are redeemed in the limited circumstances described below, the
Trust shall be dissolved with the result that the Junior Subordinated
Debentures will be distributed to the holders of the Preferred Securities, on
a pro rata basis, in lieu of any cash distribution. In the case of a Special
Event that is a Tax Event, the Company will have the right in certain
circumstances to redeem the Junior Subordinated Debentures, which would
result in the redemption by the Trust of the Trust Securities in the same
amount on a pro rata basis. If the Junior Subordinated Debentures are
distributed to the holders of the Preferred Securities, the Company will use
its best efforts to have the Junior Subordinated Debentures listed on the New
York Stock Exchange or on such other exchange as the Preferred Securities are
then listed. See "Description of the Preferred Securities--Special Event
Redemption or Distribution" and "Description of the Junior Subordinated
Debentures."
In the event of the voluntary or involuntary dissolution, winding up or
termination of the Trust, the holders of the Preferred Securities will be
entitled to receive, for each Preferred Security, a liquidation amount of $25
plus accrued and unpaid distributions thereon (including interest thereon) to
the date of payment, unless in connection with such dissolution, the Junior
Subordinated Debentures are distributed to the holders of the Preferred
Securities. See "Description of the Preferred Securities--Liquidation
Distribution Upon Dissolution."
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-3
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial information is qualified by
reference to and should be read in conjunction with, the Company's
Consolidated Financial Statements and the Notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
included in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "Form 10-K"), which is incorporated by reference
in the accompanying Prospectus. The selected consolidated statement of income
data for the years ended December 31, 1993, 1994 and 1995 and the selected
consolidated statement of financial condition data as of December 31, 1994
and 1995 are derived from the Company's audited Consolidated Financial
Statements which are incorporated by reference herein. The selected unaudited
financial information as of and for the three months ended March 31, 1995 and
1996 should be read in conjunction with the Company's audited Consolidated
Financial Statements and Notes thereto contained in the Form 10-K and the
Company's unaudited Consolidated Financial Statements and Notes thereto
contained in Company's quarterly report on Form 10-Q for the quarter ended
March 31, 1996 (the "Form 10-Q"), which report is also incorporated by
reference in the accompanying Prospectus. Such unaudited information
reflects, in the opinion of management, all adjustments, consisting of normal
recurring adjustments which the Company considers necessary for a fair
presentation of its financial position and results of operations for these
periods. Operating results for the three months ended March 31, 1996 are not
necessarily indicative of the results that may be expected for the entire
year ending December 31, 1996. The selected consolidated statement of
financial condition data as of December 31, 1991, 1992, 1993 and the selected
consolidated statement of income data for the years ended December 31, 1991
and 1992 are derived from the audited Consolidated Financial Statements of
the Company which are not included or incorporated by reference in the
accompanying Prospectus.
S-4
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- ------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE DATA AND FINANCIAL RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Commissions ............................... $ 257.9 $ 289.7 $ 358.8 $ 376.1 $ 460.2 $107.2 $146.5
Underwritings ............................. 170.9 350.3 574.6 261.1 441.5 52.4 135.4
Fees ...................................... 166.2 158.1 211.3 281.3 369.1 87.8 83.2
Interest-net(1) ........................... 323.0 381.7 657.3 791.9 904.1 195.3 230.9
Principal transactions-net:
Trading ................................... 264.2 272.0 381.5 165.7 364.9 67.6 143.5
Investment ................................ 17.3 195.9 79.9 97.6 163.7 59.6 25.6
Other ...................................... 15.1 16.4 21.9 35.0 55.1 12.5 10.8
--------- --------- --------- --------- --------- -------- --------
Total Revenues ........................... 1,214.6 1,664.1 2,285.3 2,008.7 2,758.6 582.4 775.9
--------- --------- --------- --------- --------- -------- --------
Costs and Expenses:
Compensation and benefits ................. 567.9 886.6 1,200.4 897.8 1,261.4 266.7 344.3
Compensation expense--restricted stock
units .................................... -- -- -- -- 6.2 -- --
Interest .................................. 236.4 212.3 381.7 503.8 680.6 139.0 175.0
Other expenses ............................ 321.3 320.2 401.2 402.1 511.9 114.2 148.1
--------- --------- --------- --------- --------- -------- --------
Total costs and expenses ................. 1,125.6 1,419.1 1,983.3 1,803.7 2,460.1 519.9 667.4
--------- --------- --------- --------- --------- -------- --------
Income before provision for income taxes .. 89.0 245.0 302.0 205.0 298.5 62.5 108.5
Provision for income taxes ................. 31.2 98.0 115.9 82.0 119.4 25.0 43.4
--------- --------- --------- --------- --------- -------- --------
Net income ................................. $ 57.8 $ 147.0 $ 186.1 $ 123.0 $ 179.1 $ 37.5 $ 65.1
--------- --------- --------- --------- --------- -------- --------
Dividends on preferred stock ............... -- -- -- $ 21.0 $ 19.9 $ 5.0 $ 5.0
--------- --------- --------- --------- --------- -------- --------
Earnings applicable to common stock ....... $ 57.8 $ 147.0 $ 186.1 $ 102.0 $ 159.2 $ 32.5 $ 60.1
========= ========= ========= ========= ========= ======== ========
Weighted average common shares
outstanding(2) ............................ 51.7 59.6
========= ========
Earnings per common share(2) ............... $ 3.08 $ 1.01
========= ========
Pro forma weighted average common shares(3) 51.5 51.5
========= ========
Pro forma earnings per common share(3) .... $ 1.98 $ 0.63
========= ========
</TABLE>
S-5
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
-------------------------------------------------------------- --------------------
1991 1992 1993 1994 1995 1995 1996
--------- ----------- ----------- ----------- ----------- ------- ------
(IN MILLIONS, EXCEPT PER SHARE DATA AND FINANCIAL RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT END OF PERIOD):
Securities purchased under agreements to resell
and securities borrowed ....................... $10,942.5 $14,378.4 $21,575.2 $19,166.9 $27,793.1 $24,902.5 $27,678.0
Total assets ................................... 18,721.7 24,436.2 38,766.7 33,261.6 44,576.5 38,030.4 46,618.6
Securities sold under agreements to repurchase
and securities loaned ......................... 11,200.8 14,732.4 24,116.7 20,385.4 29,369.0 24,860.8 28,396.7
Long-term borrowings ........................... 268.1 478.6 549.0 539.9 958.9 737.8 1,101.7
Preferred stock ................................ -- -- 225.0 225.0 225.0 225.0 225.0
Stockholders' equity ........................... 340.3 454.6 750.3 820.3 1,198.7 844.7 1,252.1
OTHER FINANCIAL DATA (AT END OF PERIOD):
Book value per common share outstanding ....... $ 6.81 $ 9.09 $ 15.01 $ 16.41 $ 20.50 $ 16.89 $ 21.41
Ratio of net assets to stockholders' equity (4) 22.86x 22.12x 22.91x 17.18x 14.00x 15.54x 15.13x
Ratio of long-term borrowings to total
capitalization (5) ............................ 0.42x 0.51x 0.34x 0.30x 0.37x 0.36x 0.43x
Return on average equity (6) ................... 18.2% 36.8% 30.5% 13.1% 17.1% 15.8% 19.6%
Pre-tax profit margin (7) ...................... 9.1% 16.9% 15.9% 13.6% 14.4% 14.1% 18.1%
After-tax profit margin (7) .................... 5.9% 10.1% 9.8% 8.2% 8.6% 8.5% 10.8%
Ratio of earnings to fixed charges (8) ........ 1.07x 1.21x 1.20x 1.10x 1.11x 1.10x 1.16x
Ratio of earnings to combined fixed charges and
preferred stock dividends (9) ................. -- -- -- 1.09x 1.10x 1.10x 1.15x
</TABLE>
- ------------
(1)Interest is net of interest expense to finance U.S. government and
agency instruments of $1,008.0 million, $918.4 million, $1,083.6
million, $1,612.8 million, $2,109.2 million, $454.2 million and $487.4
million, respectively.
(2)Earnings per common share has been calculated by dividing earnings
applicable to common share (net income less preferred dividends) by the
weighted average number of common shares and common share equivalents
outstanding. Common share equivalents include shares of common stock
issuable under the Restricted Stock Unit Plan and the dilutive effect
of options under the treasury stock method. Weighted average common
shares outstanding are the same for both primary and fully diluted
earnings per common shares. Earnings per common share prior to 1994
were not presented because the amounts would not be meaningful.
(3)Pro forma earnings per common share are calculated by dividing earnings
applicable to common shares (net income less preferred dividends) by
the pro forma weighted average common shares and common share
equivalents outstanding. Pro forma common shares outstanding represent
actual historical shares outstanding adjusted for the dilutive effect
of the Restricted Stock Units ("RSUs") using the treasury stock method.
(4)Net assets excludes securities purchased under agreements to resell and
securities borrowed.
(5)Long-term borrowings and total capitalization (the sum of long-term
borrowings, preferred stock and stockholders' equity) exclude current
maturities of long-term borrowings.
(6)After payment of dividends on the Company's Cumulative Exchangeable
$8.83 Preferred Stock.
(7)Based on net revenues.
(8)For the purpose of calculating the ratio of earnings to fixed charges
(i) earnings consist of income before provision for income taxes and
fixed charges and (ii) fixed charges consist of interest expense and
one-third of rental expense which is deemed representative of an
interest factor.
(9)For the purpose of calculating the ratio of earnings to combined fixed
charges and preferred stock dividends (i) earnings consist of income
before the provision for income taxes and fixed charges and (ii) fixed
charges consist of interest expense and one-third of rental expense
which is deemed representative of an interest factor. No preferred
dividends were paid until 1994.
S-6
<PAGE>
THE FOLLOWING INFORMATION CONCERNING THE COMPANY, DLJ CAPITAL TRUST I, THE
PREFERRED SECURITIES, THE PREFERRED SECURITIES GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES IS IN ADDITION TO, AND SHOULD BE READ IN CONJUNCTION
WITH, THE INFORMATION CONTAINED IN THE ACCOMPANYING PROSPECTUS. CAPITALIZED
TERMS USED IN THIS PROSPECTUS SUPPLEMENT HAVE THE SAME MEANINGS AS IN THE
ACCOMPANYING PROSPECTUS.
THE COMPANY
The Company is a leading integrated investment and merchant bank that
serves institutional, corporate, governmental and individual clients. The
Company's businesses include securities underwriting, sales and trading;
merchant banking; financial advisory services; investment research;
correspondent brokerage services; and asset management. While results have
fluctuated from year to year, for the years 1991 through 1995, the Company's
total revenues and net income increased by a compound annual growth rate of
22.8% and 32.7%, respectively. The Company's average annual after-tax return
on common equity for the past five years was 23.1%. At March 31, 1996, the
Company had total assets of $46.6 billion and total stockholders' equity of
$1.3 billion.
The Company's principal strategy is to focus its resources on certain core
businesses where management believes the Company can compete profitably and
be among the leading participants in each targeted market. Over the past
several years, the Company has significantly expanded the scope of its
business activities and its customer base, both in the U.S. and
internationally. It has established strong positions in selected high-margin
activities, including equity and high-yield corporate securities underwriting
as well as merchant banking, and has increased its market share in a broad
range of businesses. Key elements of this expansion have been the Company's
recruitment of experienced professionals during periods of turmoil in the
securities industry, the continued development and retention of the Company's
existing personnel at all levels and the continuity of senior management. In
addition, the Company has historically emphasized economic and investment
research in the development of its business and believes that its commitment
to research has been an important contributor to its success.
The Company conducts its business through three principal operating
groups, each of which is an important contributor to revenues and earnings:
the Banking Group, which includes the Company's Investment Banking, Merchant
Banking and Emerging Markets groups; the Capital Markets Group, consisting of
the Company's institutional debt and equity businesses as well as Sprout, its
venture capital affiliate; and the Financial Services Group, comprised of its
Pershing clearing division, high-net-worth retail brokerage and asset
management businesses.
The Company's Banking Group is a major participant in the raising of
capital and the providing of financial advice to companies throughout the
U.S. and has significantly expanded its activities abroad. Through its
Investment Banking group, the Company manages and underwrites public
offerings of securities, arranges private placements and provides advisory
and other services in connection with mergers, acquisitions, restructurings
and other financial transactions. Since 1991, the Investment Banking group
has raised over $190.0 billion for clients from the public and private
markets in corporate equity and debt securities and has completed over 350
merger and acquisition, restructuring and divesture assignments aggregating
approximately $89.0 billion. Its Merchant Banking group pursues direct
investments in a variety of areas through a number of investment vehicles
funded with capital provided primarily by institutional investors, the
Company and its employees. Since the Company began investing in leveraged
investments in 1985 through March 31, 1996, it invested over $1.0 billion on
behalf of the Company, its employees and funds it manages in 52 companies
with an aggregate purchase price of over $19.5 billion and achieved an
average annual internal rate of return substantially in excess of comparable
industry benchmarks. The Emerging Markets group specializes in client
advisory services, merchant banking and the underwriting, sales and trading
of securities in Latin America, Asia and certain other international markets.
The Capital Markets Group encompasses a broad range of activities
including trading, research, origination and distribution of equity and
fixed-income securities, private equity investments and venture capital. Its
focus is primarily client-driven, in contrast to that of many other
securities firms which
S-7
<PAGE>
emphasize proprietary trading, an approach that reduces the Company's
exposure to market volatility. Its Taxable Fixed-Income division provides
institutional clients with research, trading and sales services for a broad
range of taxable fixed-income products including high-yield corporate,
investment-grade corporate, U.S. government and mortgage-backed securities.
The Institutional Equities division provides institutional clients with
research, trading and sales services in U.S. listed and over-the-counter
equity securities. The Company's equity sales and trading capabilities,
combined with its research expertise, have contributed to commission revenues
increasing, for the years 1991 through 1995, at a compound annual growth rate
of 15.6%. In addition, the Company's Equity Derivatives division provides a
broad range of equity and index options products, while Sprout is one of the
oldest and largest groups in the private equity investment and venture
capital industry.
The Financial Services Group provides a broad array of services to
individual investors and the financial intermediaries which represent them.
Pershing is a leading provider of correspondent brokerage services, clearing
transactions for over 600 U.S. brokerage firms which collectively maintain
over 1.3 million client accounts. These client accounts held over $127.0
billion of assets at March 31, 1996. During 1995, Pershing accounted for more
than 10% of the daily reported trading volume on the NYSE. In addition,
Pershing's PC Financial Network (Service Mark) , a leading on-line discount
broker in the U.S., has experienced significant growth over the past several
years. The Company's Investment Services Group, which consists of
approximately 270 account executives, provides high-net worth individuals and
medium to smaller size institutions with access to the Company's equity and
fixed-income research, trading services and underwriting and has one of the
highest revenues per account executive in the industry. Through Wood,
Struthers & Winthrop Management Corp. and affiliates the Company provides
investment management and trust services primarily to high-net-worth
individual investors and institutions, and at March 31, 1996 had over $4.1
billion in assets under management.
Apart from its three principal operating groups, the Company also
maintains a separate brokerage subsidiary, Autranet, Inc., which provides
institutional investors with research generated by independent originators
that are not affiliated with Wall Street brokerage firms.
Founded in 1959, the Company initially focused on providing in-depth
investment research to institutional investors. In 1970, the Company became
the first member firm of the New York Stock Exchange, Inc. to be owned
publicly. Fifteen years later, the Company was purchased by subsidiaries of
the Equitable Companies Incorporated ("EQ") (EQ and its subsidiaries other
than the Company, collectively, "Equitable"). Equitable, which as of March
31, 1996, owned an approximately 80% interest in the Company following the
Company's initial public offering in October 1995, is a diversified financial
services organization and one of the world's largest investment management
organizations. AXA is EQ's largest stockholder, beneficially owning at March
31, 1996, approximately 60.7% of EQ's outstanding shares of common stock and
$392.2 million of EQ's Series E convertible preferred stock.
S-8
<PAGE>
DLJ CAPITAL TRUST I
DLJ Capital Trust I is a statutory business trust formed on June 19, 1996
under the Delaware Business Trust Act (the "Business Trust Act") pursuant to
a declaration of trust among the Trustees and the Company and the filing of a
certificate of trust with the Secretary of State of the State of Delaware.
Such declaration will be amended and restated in its entirety (as so amended
and restated, the "Declaration") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus Supplement and
the accompanying Prospectus form a part, as of the date the Preferred
Securities are initially issued. The Declaration is qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance
of the Preferred Securities, the holders thereof will own all of the issued
and outstanding Preferred Securities. The Company will acquire Common
Securities in an amount equal to at least 3% of the total capital of the
Trust and will own, directly or indirectly, all of the issued and outstanding
Common Securities. The Trust exists for the purpose of (a) issuing its Trust
Securities for cash and investing the proceeds thereof in an equivalent
amount of Junior Subordinated Debentures and (b) engaging in such other
activities as are necessary, convenient and incidental thereto. The rights of
the holders of the Trust Securities, including economic rights, rights to
information and voting rights, are as set forth in the Declaration, the
Business Trust Act and the Trust Indenture Act. The Declaration does not
permit the incurrence by the Trust of any indebtedness for borrowed money or
the making of any investment other than in the Junior Subordinated
Debentures. In the Declaration, the Company has agreed to pay for all debts
and obligations (other than with respect to the Trust Securities) and all
costs and expenses of the Trust, including the fees and expenses of the
Trustees and any income taxes, duties and other governmental charges, and all
costs and expenses with respect thereto, to which the Trust may become
subject, except for United States withholding taxes.
S-9
<PAGE>
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following
matters:
RANKING OF SUBORDINATED OBLIGATIONS UNDER PREFERRED SECURITIES GUARANTEE AND
JUNIOR SUBORDINATED DEBENTURES; DEPENDENCE ON THE COMPANY
The obligations of the Company under the Junior Subordinated Debentures
are unsecured obligations of the Company and will be subordinate and junior
in right of payment to Senior Indebtedness of the Company but senior to its
capital stock. At March 31, 1996, the Company had Senior Indebtedness
outstanding of approximately $1.1 billion. The Company's obligations under
the Preferred Securities Guarantee are unsecured and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Company, including the Junior Subordinated Debentures, except those made pari
passu or subordinate by their terms, and (ii) senior to all capital stock now
or hereafter issued by the Company and to any guarantee now or hereafter
entered into by the Company in respect of its capital stock. Because the
Company is a holding company, the Junior Subordinated Debentures (and the
Company's obligations under the Preferred Securities Guarantee) are also
effectively subordinated to all existing and future liabilities, including
trade payables, of the Company's subsidiaries, except to the extent that the
Company is a creditor of the subsidiaries recognized as such. As of March 31,
1996, the aggregate amount of indebtedness of the Company's subsidiaries to
which holders of the Junior Subordinated Debentures and the Preferred
Securities Guarantees would have been structurally subordinated was
approximately $1.4 billion, substantially all of which was incurred under
customary arrangements utilized by the securities brokerage industry. There
are no terms in the Preferred Securities, the Junior Subordinated Debentures
or the Preferred Securities Guarantee that limit the Company's ability to
incur additional indebtedness, including indebtedness that ranks senior to or
pari passu with the Junior Subordinated Debentures and the Preferred
Securities Guarantee, or the ability of its subsidiaries to incur additional
indebtedness. See "Description of the Preferred Securities Guarantees--Status
of the Preferred Securities Guarantees" and "Description of the Junior
Subordinated Debt Securities--Subordination" in the accompanying Prospectus.
The Trust's ability to make distributions and other payments on the
Preferred Securities is solely dependent upon the Company making interest and
other payments on the Junior Subordinated Debentures deposited as trust
assets as and when required. If the Company were not to make distributions or
other payments on the Junior Subordinated Debentures for any reason,
including as a result of the Company's election to defer the payment of
interest on the Junior Subordinated Debentures by extending the interest
period on the Junior Subordinated Debentures, the Trust will not make
payments on the Trust Securities. In such an event, holders of the Preferred
Securities would not be able to rely on the Preferred Securities Guarantee
since distributions and other payments on the Preferred Securities are
subject to such Guarantee only if and to the extent that the Company has made
a payment to the Property Trustee of interest or principal on the Junior
Subordinated Debentures deposited in the Trust as trust assets. Instead,
holders of Preferred Securities would rely on the enforcement by the Property
Trustee of its rights as registered holder of the Junior Subordinated
Debentures against the Company pursuant to the terms of the Indenture.
However, if the Trust's failure to make distributions on the Preferred
Securities is a consequence of the Company's exercise of its right to extend
the interest payment period for the Junior Subordinated Debentures, the
Property Trustee will have no right to enforce the payment of distributions
on the Preferred Securities until an Event of Default under the Declaration
shall have occurred. The Company's obligations under the Preferred Securities
Guarantee are subordinate and junior in right of payment to all other
liabilities of the Company, including the Junior Subordinated Debentures,
except those made pari passu or subordinate by their terms to the Preferred
Securities Guarantee and senior to its capital stock or to any guarantee of
the Company in respect of its capital stock.
The Declaration provides that the Company shall pay for all debts and
obligations (other than with respect to the Trust Securities) and all costs
and expenses of the Trust, including any taxes and all costs
S-10
<PAGE>
and expenses with respect thereto, to which the Trust may become subject,
except for United States withholding taxes. No assurance can be given that
the Company will have sufficient resources to enable it to pay such debts,
obligations, costs and expenses on behalf of the Trust.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX IMPACT OF EXTENSION
So long as the Company shall not be in default in the payment of interest
on the Junior Subordinated Debentures, the Company has the right under the
Indenture to defer payments of interest on the Junior Subordinated Debentures
by extending the interest payment period from time to time on the Junior
Subordinated Debentures for an Extension Period not exceeding 60 consecutive
monthly interest periods, during which no interest shall be due and payable.
In such an event, monthly distributions on the Preferred Securities would not
be made (but would continue to accrue with interest thereon at the rate of
% per annum, compounded monthly) by the Trust during any such Extension
Period. If the Company exercises the right to extend an interest payment
period, the Company may not during such Extension Period declare or pay
dividends on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock or preferred
stock; provided that (i) the Company will be permitted to pay accrued
dividends upon the exchange or redemption of any series of preferred stock of
the Company as may be outstanding from time to time, in accordance with the
terms of such stock and (ii) the foregoing will not apply to stock dividends
paid by the Company. As of March 31, 1996, the Company had 2,250,000 Shares
of Cumulative Exchangeable $8.83 Preferred Stock outstanding. Each holder of
Cumulative Exchangeable Preferred Stock is entitled to receive when, as and
if it is declared by the Board of Directors, out of funds legally available
therefor, cumulative cash dividends of $8.83 per share per annum, payable
quarterly in arrears. Subject to certain conditions, after October 15, 1996,
the Company may exchange the Cumulative Exchangeable $8.83 Preferred Stock
for an equal principal amount of subordinated notes of the Company bearing a
rate of interest of 9.58% per annum and having the same redemption provisions
as the Cumulative Exchangeable $8.83 Preferred Stock (as described under
"Description of Capital Stock" in the accompanying Prospectus.) The Company
is required to redeem all outstanding shares of the Cumulative Exchangeable
$8.83 Preferred Stock on October 15, 2003 and may redeem such Preferred Stock
in whole or in part at any time at its option in certain circumstances.
Prior to the termination of any Extension Period, the Company may further
extend such Extension Period; provided that such Extension Period together
with all such previous and further extensions thereof may not exceed 60
consecutive monthly interest periods. Upon the termination of any Extension
Period and the payment of all amounts then due, the Company may commence a
new Extension Period, subject to the above requirements. The Company may also
prepay at any time all or any portion of the interest accrued during an
Extension Period. Consequently, there could be multiple Extension Periods of
varying lengths throughout the term of the Junior Subordinated Debentures,
not to exceed 60 consecutive months or to cause any extension beyond the
maturity of the Junior Subordinated Debentures. See "Description of the
Preferred Securities--Distributions" and "Description of the Junior
Subordinated Debentures--Option to Extend Interest Payment Period."
Because the Company has the right to extend the interest payment period
for an Extension Period of up to 60 consecutive monthly interest periods on
various occasions, the Junior Subordinated Debentures will be treated as
issued with "original issue discount" for United States Federal income tax
purposes. As a result, holders of Preferred Securities will be required to
include their pro rata share of original issue discount in gross income as it
accrues for United States Federal income tax purposes in advance of the
receipt of cash. Generally, all of a securityholder's taxable interest income
with respect to the Junior Subordinated Debentures will be accounted for as
"original issue discount" and actual distributions of stated interest will
not be separately reported as taxable income. See "Taxation--Accrual of
Original Issue Discount and Premium" and "--Potential Extension of Payment
Period on the Junior Subordinated Debentures."
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence and during the continuation of a Tax Event or
Investment Company Event (each as defined herein), which may occur at any
time, the Trust shall, unless the Junior Subordinated
S-11
<PAGE>
Debentures are redeemed in the limited circumstances described below, be
dissolved with the result that, in the manner described in "Description of
the Preferred Securities--Liquidation Distribution Upon Dissolution," Junior
Subordinated Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of, and bearing accrued and unpaid
distributions on, the Preferred Securities and Common Securities would be
distributed on a Pro Rata Basis (as defined under "The DLJ Trusts" in the
accompanying Prospectus) to the holders of the Preferred Securities and
Common Securities in liquidation of the Trust. In the case of a Tax Event, in
certain circumstances, the Company shall have the right to redeem at any time
the Junior Subordinated Debentures, in whole or in part, in which event the
Trust will redeem Preferred Securities and Common Securities on a Pro Rata
Basis to the same extent as the Junior Subordinated Debentures are redeemed.
There can be no assurance as to the market prices for Preferred Securities or
the Junior Subordinated Debentures which may be distributed in exchange for
Preferred Securities if a dissolution and liquidation of the Trust were to
occur. Accordingly, the Preferred Securities that an investor may purchase,
or the Junior Subordinated Debentures that the investor may receive on
dissolution and liquidation of the Trust, may trade at a discount to the
price that the investor paid to purchase the Preferred Securities offered
hereby. Because holders of Preferred Securities may receive Junior
Subordinated Debentures upon the occurrence of a Special Event, prospective
purchasers of Preferred Securities are also making an investment decision
with regard to the Junior Subordinated Debentures and should carefully review
all the information regarding the Junior Subordinated Debentures contained
herein and in the accompanying Prospectus. See "Description of the Preferred
Securities--Special Event Redemption or Distribution" and "Description of the
Junior Subordinated Debentures--General."
If enacted in their present form, certain legislative proposals in the
Revenue Reconciliation Bill of 1996 (the "Bill") would prevent the Company
from deducting interest on the Junior Subordinated Debentures. The Bill as
proposed would be effective generally for instruments issued on or after
December 7, 1995. However, on March 29, 1996, the Chairmen of the Senate
Finance and House Ways and Means Committees issued a joint statement to the
effect that it was their intention that the effective date of the President's
legislative proposals, if adopted, will be no earlier than the date of
appropriate Congressional action. There can be no assurance, however, that
current or future legislative proposals if enacted would not prevent the
Company from deducing interest on the Junior Subordinated Debentures. This
would constitute a Tax Event and could result in the distribution of the
Junior Subordinated Debentures to holders of the Preferred Securities or, in
certain circumstances, the redemption of such securities by the Company and
the distribution of the resulting cash in redemption of the Preferred
Securities. See "Description of the Preferred Securities--Special Event
Redemption or Distribution."
Under current United States Federal income tax law, a distribution of the
Junior Subordinated Debentures upon a Tax Event or Investment Company Event
would not be a taxable event to holders of the Preferred Securities. See
"Taxation--Distribution of Junior Subordinated Debentures to Holders of
Preferred Securities."
LIMITING VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights, but will
not be able to appoint, remove or replace, or to increase or decrease the
number of, Trustees, which rights are vested exclusively in the Common
Securities.
LISTING OF PREFERRED SECURITIES; TRADING PRICES
The Preferred Securities constitute a new issue of securities with no
established trading market. While application will be made to list the
Preferred Securities on the NYSE, there can be no assurance that an active
market for the Preferred Securities will develop or be sustained in the
future on such exchange. Although Donaldson, Lufkin & Jenrette Securities
Corporation has indicated to the Company and the Trust that it intends to
make a market in the Preferred Securities as permitted by applicable laws and
regulations prior to the commencement of trading on the NYSE, it is not
obligated to do so and may discontinue any such market-making at any time
without notice. Accordingly, no assurance can be given as to the liquidity
of, or trading markets for, the Preferred Securities.
S-12
<PAGE>
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who disposes of his Preferred
Securities between record dates for payments of distributions thereon will be
required to include accrued but unpaid interest on the Junior Subordinated
Debentures through the date of disposition in income as ordinary income, and
to add such amount to his adjusted tax basis in his pro rata share of the
underlying Junior Subordinated Debentures deemed disposed of. Accordingly,
such a holder will recognize a capital loss to the extent the selling price
(which may not fully reflect the value of accrued but unpaid interest) is
less than the holders adjusted tax basis (which will include accrued but
unpaid interest). Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States Federal income
tax purposes. See "Taxation--Accrual of Original Issue Discount and Premium"
and "--Disposition of the Preferred Securities."
POTENTIAL MARKET VOLATILITY DURING EXTENSION PERIOD
As described above, the Company has the right to extend an interest
payment period on the Junior Subordinated Debentures from time to time for a
period not exceeding 60 consecutive monthly interest periods. If the Company
determines to extend an interest payment period, or if the Company thereafter
extends an Extension Period or prepays interest accrued during an Extension
Period as described above, the market price of the Preferred Securities is
likely to be affected. In addition, as a result of such rights, the market
price of the Preferred Securities (which represent an undivided interest in
Junior Subordinated Debentures) may be more volatile than other securities on
which original issue discount accrues that do not have such rights. A holder
that disposes of its Preferred Securities during an Extension Period,
therefore, may not receive the same return on its investment as a holder that
continues to hold its Preferred Securities. See "Description of the Junior
Subordinated Debentures--Option to Extend Interest Payment Period."
S-13
<PAGE>
CAPITALIZATION OF THE COMPANY
The following table sets forth the unaudited consolidated capitalization
of the Company at March 31, 1996, and as adjusted to reflect the application
of the estimated net proceeds from the sale of the Preferred Securities
(assuming no exercise of the Underwriters overallotment option). See "Use of
Proceeds." The table should be read in conjunction with the Company's
consolidated financial statements and notes thereto included in the documents
incorporated by reference herein. See "Incorporation of Certain Documents by
Reference" in the accompanying Prospectus.
<TABLE>
<CAPTION>
MARCH 31, 1996
---------------------------
ACTUAL AS ADJUSTED
(IN THOUSANDS)
<S> <C> <C>
Short-term borrowings .......................................... $1,727,730
============
Long-term borrowings:
Senior Notes .................................................. $ 496,917
Senior subordinated revolving credit .......................... 250,000
Medium-term notes ............................................. 337,519
Other borrowings .............................................. 17,259
------------
Total long-term borrowings .................................... 1,101,695
Cumulative Exchangeable $8.83 Preferred Stock, at redemption
value ......................................................... 225,000
Company-obligated mandatorily redeemable preferred securities
of grantor trusts (1) ......................................... --
Stockholders' equity:
Common stock ($0.10 par value) 150,000,000 shares authorized;
53,300,000 shares issued and outstanding ..................... 5,330
Restricted stock units; 5,179,147 units authorized, issued and
outstanding .................................................. 106,163
Paid-in capital ............................................... 363,993
Retained earnings ............................................. 777,330
Cumulative translation adjustment ............................. (729)
------------
Total stockholders' equity .................................... 1,252,087
------------
Total capitalization .......................................... $2,578,782
============
</TABLE>
- ------------
(1) As described in this Prospectus Supplement, the sole asset of the Trust
will be the Junior Subordinated Debentures.
S-14
<PAGE>
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated with the
Company's financial statements, with the Preferred Securities shown as
Company-obligated mandatorily redeemable preferred securities in grantor
trusts holding junior subordinated debentures of the Company.
USE OF PROCEEDS
The proceeds of the sale of the Preferred Securities will be invested by
the Trust in Junior Subordinated Debentures of the Company. The proceeds from
the issuance of such Junior Subordinated Debentures will be used by the
Company for the reduction of short-term indebtedness, and for general
corporate purposes.
S-15
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration which is qualified under the Trust Indenture Act. The Property
Trustee, The Bank of New York, but not the other Trustees of the Trust, will
act as the indenture trustee for purposes of the Trust Indenture Act. The
terms of the Preferred Securities and the Declaration include those stated in
the Declaration and those made part of the Declaration by the Trust Indenture
Act and the Business Trust Act. The following summarizes the material terms
and provisions of the Preferred Securities and is qualified in its entirety
by reference to, the Declaration, which has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement forms a part, the
Business Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Trust to issue the Preferred Securities,
which represent preferred undivided beneficial interests in the assets of the
Trust, and the Common Securities, which represent common undivided beneficial
interests in the assets of the Trust. All of the Common Securities will be
owned, directly or indirectly, by the Company. The Common Securities and the
Preferred Securities rank pari passu with each other and will have equivalent
terms except that (i) if an Event of Default under the Declaration occurs and
is continuing, the rights of the holders of the Common Securities to payment
in respect of periodic distributions and payments upon liquidation,
redemption or otherwise are subordinated to the rights of the holders of the
Preferred Securities and (ii) holders of Common Securities have the exclusive
right (subject to the terms of the Declaration) to appoint, remove or replace
Trustees and to increase or decrease the number of Trustees. The Declaration
does not permit the issuance by the Trust of any securities or other
evidences of beneficial ownership of, or beneficial interests in, the Trust
other than the Preferred Securities and the Common Securities, the incurrence
of any indebtedness for borrowed money by the Trust or the making of any
investment other than in the Junior Subordinated Debentures. Pursuant to the
Declaration, the Property Trustee will own and hold the Junior Subordinated
Debentures as trust assets for the benefit of the holders of the Preferred
Securities and the Common Securities. The payment of distributions out of
moneys held by the Property Trustee and payments on redemption of the
Preferred Securities or liquidation of the Trust are guaranteed by the
Company on a subordinated basis as and to the extent described under
"Description of the Preferred Securities Guarantees" in the accompanying
Prospectus. The Property Trustee will hold the Preferred Securities Guarantee
for the benefit of holders of the Preferred Securities. The Preferred
Securities Guarantee is a full and unconditional guarantee from the time of
issuance of the Preferred Securities, but the Preferred Securities Guarantee
covers distributions and other payments on the Preferred Securities only if
and to the extent that the Company has made a payment to the Property Trustee
of interest or principal on the Junior Subordinated Debentures deposited in
the Trust as trust assets. See "Voting Rights."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per
annum of % of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one month will bear interest thereon
at the rate per annum of % of the stated liquidation amount of $25 per
Preferred Security (to the extent permitted by law), compounded monthly. The
term "distributions" as used herein includes any such interest payable unless
otherwise stated. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
Distributions on the Preferred Securities will be cumulative, will accrue
from the original date of issuance and, except as otherwise described below,
will be payable monthly in arrears, commencing on , 1996, but only if,
and to the extent that, interest payments are made in respect of Junior
Subordinated Debentures held by the Property Trustee.
So long as the Company shall not be in default in the payment of interest
on the Junior Subordinated Debentures, the Company has the right under the
Indenture to defer payments of interest on the Junior Subordinated Debentures
by extending the interest payment period from time to time on the Junior
Subordinated Debentures for a period not exceeding 60 consecutive monthly
interest periods and, as a
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consequence, the Trust would defer monthly distributions on the Preferred
Securities (though such distributions would continue to accrue with interest
thereon at the rate of % per annum, compounded monthly) during any such
Extension Period. If the Company exercises the right to extend an interest
payment period, the Company may not declare or pay dividends on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect
to, any of its common stock or preferred stock during such Extension Period;
provided that (i) the Company will be permitted to pay accrued dividends upon
the exchange or redemption of any series of preferred stock of the Company as
may be outstanding from time to time, in accordance with the terms of such
stock, and (ii) the foregoing will not apply to any stock dividend by the
Company. Prior to the termination of any such Extension Period, the Company
may further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed
60 consecutive monthly interest periods. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the above requirements. The
Company may also prepay at any time all or any portion of the interest
accrued during an Extension Period. Consequently, there could be multiple
Extension Periods of varying lengths throughout the term of the Junior
Subordinated Debentures, not to exceed 60 consecutive months or to cause any
extension beyond the maturity of the Junior Subordinated Debentures. See
"Risk Factors" "--Option to Extend Interest Payment Period; Tax Impact of
Extension"; "Description of the Junior Subordinated Debentures--Interest" and
"--Option to Extend Interest Payment Period." Payments of accrued
distributions will be payable to holders of Preferred Securities as they
appear on the books and records of the Trust on the first record date after
the end of an Extension Period.
Distributions on the Preferred Securities must be paid on the dates
payable to the extent that the Property Trustee has cash on hand in the
Property Account to permit such payment. The funds available for distribution
to the holders of the Preferred Securities will be limited to payments
received by the Property Trustee in respect of the Junior Subordinated
Debentures that are deposited in the Trust as trust assets. See "Description
of the Junior Subordinated Debentures." If the Company does not make interest
payments on the Junior Subordinated Debentures, the Property Trustee will not
make distributions on the Preferred Securities. Under the Declaration, if and
to the extent the Company does make interest payments on the Junior
Subordinated Debentures deposited in the Trust as trust assets, the Property
Trustee is obligated to make distributions on the Trust Securities on a Pro
Rata Basis. The payment of distributions on the Preferred Securities is
guaranteed by the Company on a subordinated basis as and to the extent set
forth under "Description of the Preferred Securities Guarantees" in the
accompanying Prospectus. The Preferred Securities Guarantee is a full and
unconditional guarantee from the time of issuance of the Preferred Securities
but the Preferred Securities Guarantee covers distributions and other
payments on the Preferred Securities only if and to the extent that the
Company has made a payment to the Property Trustee of interest or principal
on the Junior Subordinated Debentures deposited in the Trust as trust assets.
Distributions on the Preferred Securities will be made to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Preferred Securities remain in book-entry
form, will be one Business Day (as defined herein) prior to the relevant
Distribution payment date. Distributions payable on any Preferred Securities
that are not punctually paid on any Distribution payment date as a result of
the Company having failed to make the corresponding interest payment on the
Junior Subordinated Debentures will forthwith cease to be payable to the
person in whose name such Preferred Security is registered on the relevant
record date, and such defaulted Distribution will instead be payable to the
person in whose name such Preferred Security is registered on the special
record date established by the Regular Trustees, which record date shall
correspond to the special record date or other specified date determined in
accordance with the Indenture; provided, however, that Distributions shall
not be considered payable on any Distribution payment date falling within an
Extension Period unless the Company has elected to make a full or partial
payment of interest accrued on the Junior Subordinated Debentures on such
Distribution payment date. Distributions on the Preferred Securities will be
paid through the Property Trustee who will hold amounts received in respect
of the Junior Subordinated Debentures in the Property Account for the benefit
of the holders of the Preferred and Common Securities. Subject to any
applicable laws and regulations and the provisions of
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the Declaration, each such payment will be made as described under
"Book-Entry Only Issuance--The Depository Trust Company" below. In the event
that the Preferred Securities do not continue to remain in book-entry form,
the Regular Trustees shall have the right to select relevant record dates
which shall be more than one Business Day prior to the relevant payment
dates. The Declaration provides that the payment dates or record dates for
the Preferred Securities shall be the same as the payment dates and record
dates for the Junior Subordinated Debentures. All distributions paid with
respect to the Trust Securities shall be paid on a Pro Rata Basis to the
holders thereof entitled thereto. If any date on which distributions are to
be made on the Preferred Securities is not a Business Day, then payment of
the distribution to be made 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 such date. "Business Day" shall mean any day other than Saturday,
Sunday or any other day on which banking institutions in the City of New York
in the State of New York) are permitted or required by any applicable law to
close.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
If, at any time, a Tax Event or an Investment Company Event (each as
hereinafter defined, and each a "Special Event") shall occur and be
continuing, the Trust shall, unless the Junior Subordinated Debentures are
redeemed in the limited circumstances described below, be dissolved with the
result that, after satisfaction of creditors of the Trust, Junior
Subordinated Debentures with an aggregate principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities and the
Common Securities would be distributed on a Pro Rata Basis to the holders of
the Preferred Securities and the Common Securities in liquidation of such
holders' interests in the Trust, within 90 days following the occurrence of
such Special Event; provided, however, that in the case of the occurrence of
a Tax Event, as a condition of such dissolution and distribution, the Regular
Trustees shall have received an opinion of nationally recognized independent
tax counsel experienced in such matters (a "No Recognition Opinion"), which
opinion may rely on any then applicable published revenue rulings of the
Internal Revenue Service, to the effect that the holders of the Preferred
Securities will not recognize any gain or loss for United States Federal
income tax purposes as a result of such dissolution and distribution of
Junior Subordinated Debentures; and, provided, further, that, if at the time
there is available to the Trust the opportunity to eliminate, within such 90
day period, the Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar
reasonable measure, which has no adverse effect on the Trust or the Company
or the holders of the Preferred Securities, the Trust will pursue such
measure in lieu of dissolution. Furthermore, if in the case of the occurrence
of a Tax Event, (i) the Regular Trustees have received an opinion (a
"Redemption Tax Opinion") of nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more
than an insubstantial risk that the Company would be precluded from deducting
the interest on the Junior Subordinated Debentures for United States Federal
income tax purposes even if the Junior Subordinated Debentures were
distributed to the holders of Preferred Securities and Common Securities in
liquidation of such holders' interests in the Trust as described above or
(ii) the Regular Trustees shall have been informed by such tax counsel that a
No Recognition Opinion cannot be delivered to the Trust, the Company shall
have the right, upon not less than 30 nor more than 60 days notice, to redeem
the Junior Subordinated Debentures in whole or in part for cash within 90
days following the occurrence of such Tax Event, and promptly following such
redemption Preferred Securities and Common Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Junior
Subordinated Debentures so redeemed will be redeemed by the Trust at the
Redemption Price on a Pro Rata Basis; provided, however, that if at the time
there is available to the Company or the Regular Trustees the opportunity to
eliminate, within such 90 day period, the Tax Event by taking some
ministerial action, such as filing a form or making an election, or pursuing
some other similar reasonable measure, which has no adverse effect on the
Trust, the Company or the holders of the Preferred Securities, the Company
will pursue such measure in lieu of redemption and provided further that the
Company shall have no right to redeem the Junior Subordinated Debentures
while the Regular Trustees on behalf of the
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Trust are pursuing any such ministerial action. The Common Securities will be
redeemed on a Pro Rata Basis with the Preferred Securities, except that if an
Event of Default under the Declaration has occurred and is continuing, the
Preferred Securities will have a priority over the Common Securities with
respect to payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have obtained an opinion
of a nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after the date
of this Prospectus Supplement as a result of (a) any amendment to, or change
in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) any
amendment to, or change in, an interpretation or application of any such laws
or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
effective or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after the date of this Prospectus
Supplement, there is more than an insubstantial risk that (i) the Trust is,
or will be within 90 days of the date thereof, subject to United States
Federal income tax with respect to income accrued or received on the Junior
Subordinated Debentures, (ii) the Trust is, or will be within 90 days of the
date thereof, subject to more than a de minimis amount of other taxes, duties
or other governmental charges or (iii) interest payable by the Company to the
Trust on the Junior Subordinated Debentures is not, or within 90 days of the
date thereof will not be, deductible by the Company for United States Federal
income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced
in practice under the Investment Company Act of 1940, as amended (the "1940
Act"), that as a result of the occurrence of a change in law or regulation or
a change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an "investment company" which is required to
be registered under the 1940 Act, which Change in 1940 Act Law becomes
effective on or after the date of this Prospectus Supplement.
On the date fixed for any distribution of Junior Subordinated Debentures,
upon dissolution of the Trust, (i) the Preferred Securities and the Common
Securities will no longer be deemed to be outstanding, (ii) the depositary or
its nominee, as the record holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Junior
Subordinated Debentures to be delivered upon such distribution, and (iii) any
certificates representing Preferred Securities not held by the depositary or
its nominee will be deemed to represent Junior Subordinated Debentures having
an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the distribution rate of, and
accrued and unpaid interest equal to accrued and unpaid distributions on,
such Preferred Securities, until such certificates are presented to the
Company or its agent for transfer or reissuance.
There can be no assurance as to the market price for the Junior
Subordinated Debentures which may be distributed in exchange for Preferred
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Junior Subordinated Debentures which the investor may
subsequently receive on dissolution and liquidation of the Trust, may trade
at a discount to the price of the Preferred Securities exchanged. If the
Junior Subordinated Debentures are distributed to the holders of Preferred
Securities upon the dissolution of the Trust, the Company will use its best
efforts to list the Junior Subordinated Debentures on the NYSE or on such
other exchange on which the Preferred Securities are then listed.
MANDATORY REDEMPTION
Upon the repayment of the Junior Subordinated Debentures, whether at
maturity, upon redemption or otherwise, the proceeds from such repayment or
payment will be promptly applied to redeem Preferred Securities and Common
Securities having an aggregate liquidation amount equal to the Junior
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Subordinated Debentures so repaid, upon not less than 30 nor more than 60
days' notice, at the Redemption Price. The Common Securities will be entitled
to be redeemed on a Pro Rata Basis with the Preferred Securities, except that
if an Event of Default under the Declaration has occurred and is continuing,
the Preferred Securities will have a priority over the Common Securities with
respect to payment of the Redemption Price. Subject to the foregoing, if
fewer than all outstanding Preferred Securities and Common Securities are to
be redeemed, the Preferred Securities and Common Securities will be redeemed
on a Pro Rata Basis. In the event fewer than all outstanding Preferred
Securities are to be redeemed, Preferred Securities registered in the name of
and held by DTC or its nominee will be redeemed as described under
"Book-Entry-Only; Delivery and Form" below.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all monthly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable) then, by 12:00 noon, New York
City time, on the redemption date and provided that the Company has paid to
the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Junior Subordinated Debentures, the
Trust will irrevocably deposit with the Depositary funds sufficient to pay
the applicable Redemption Price and will give the Depositary irrevocable
instructions and authority to pay the Redemption Price to the holders of the
Preferred Securities. See "Book-Entry Only Issuance--The Depository Trust
Company." If notice of redemption shall have been given and funds deposited
as required, then, immediately prior to the close of business on the date of
such deposit, distributions will cease to accrue on the Preferred Securities
called for redemption, such Preferred Securities shall no longer be deemed to
be outstanding and all rights of 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. Neither the Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Preferred
Securities which have been so called for redemption. If 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
that 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 each case with the same force and effect as if made on such
date fixed for redemption. If the Company fails to repay Junior Subordinated
Debentures on maturity or on the date fixed for this redemption or if payment
of the Redemption Price in respect of Preferred Securities is improperly
withheld or refused and not paid by the Property Trustee or by the Company
pursuant to the Preferred Securities Guarantee described under "Description
of the Preferred Securities Guarantee" in the accompanying Prospectus,
distributions on such Preferred Securities will continue to accrue, from the
original redemption date of the Preferred Securities to the date of payment,
in which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Preferred Securities
are to be redeemed, the Preferred Securities will be redeemed as described
below under "Book-Entry Only Issuance--The Depository Trust Company."
If a partial redemption of the Preferred Securities would result in the
delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed, the
Company pursuant to the Indenture will only redeem Debentures in whole and,
as a result, the Trust may only redeem the Preferred Securities in whole.
Subject to the foregoing and applicable law (including, without
limitation, United States Federal securities laws), the Company or any of 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.
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LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary dissolution, liquidation,
winding-up or termination of the Trust, the holders of the Preferred
Securities and Common Securities at the date of dissolution, winding-up or
termination of the Trust will be entitled to receive on a Pro Rata Basis
solely out of the assets of the Trust, after satisfaction of liabilities of
creditors (to the extent not satisfied by the Company as provided in the
Declaration), an amount equal to the aggregate of the stated liquidation
amount of $25 per Trust Security plus accrued and unpaid distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, liquidation,
winding-up or termination, Junior Subordinated Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of such
Trust Securities and bearing accrued and unpaid interest in an amount equal
to the accrued and unpaid distributions on such Trust Securities, shall be
distributed on a Pro Rata Basis to the holders of the Preferred Securities
and Common Securities in exchange therefor.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid on a Pro Rata Basis. The holders of the Common Securities will
be entitled to receive distributions upon any such dissolution on a Pro Rata
Basis with the holders of the Preferred Securities, except that if an Event
of Default under the Declaration has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities with
respect to payment of the Liquidation Distribution.
Pursuant to the Declaration, the Trust shall terminate: (i) on , 2046;
(ii) when all of the Trust Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to the
holders of Trust Securities in accordance with the terms of the Trust
Securities; or (iii) when all of the Junior Subordinated Debentures shall
have been distributed to the holders of Trust Securities in exchange for all
of the Trust Securities in accordance with the terms of the Trust Securities.
NO MERGER, CONSOLIDATION OR AMALGAMATION OF THE TRUST
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets to, any
corporation or other entity.
DECLARATION EVENTS OF DEFAULT
An Indenture Event of Default (as defined in the accompanying Prospectus)
will constitute an event of default under the Declaration with respect to the
Trust Securities (an "Event of Default"); provided that pursuant to the
Declaration, the holder of the Common Securities will be deemed to have
waived any such Event of Default with respect to the Common Securities until
all Events of Default with respect to the Preferred Securities have been
cured or waived. Until all such Events of Default with respect to the
Preferred Securities have been so cured or waived, the Property Trustee will
be deemed to be acting solely on behalf of the holders of the Preferred
Securities, and only the holders of the Preferred Securities will have the
right to direct the Property Trustee with respect to certain matters under
the Declaration and consequently under the Indenture. In the event that any
Event of Default with respect to the Preferred Securities is waived by the
holders of the Preferred Securities as provided in the Declaration, the
holders of Common Securities pursuant to the Declaration have agreed that
such waiver also constitutes a waiver of such Event of Default with respect
to the Common Securities for all purposes under the Declaration without any
further act, vote or consent of the holders of the Common Securities. See
"Voting Rights."
Upon the occurrence of an Event of Default, the Property Trustee as the
holder of all of the Junior Subordinated Debentures will have the right under
the Indenture to declare the principal of and interest on the Junior
Subordinated Debentures to be immediately due and payable. In addition, the
Property Trustee will have the power to exercise all rights, powers and
privileges under the Indenture. See "Description of the Junior Subordinated
Debentures."
VOTING RIGHTS
Except as provided below, under "Modification and Amendment of the
Declaration" and "Description of the Preferred Securities
Guarantee--Amendments and Assignment" in the accompanying
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Prospectus and as otherwise required by the Business Trust Act, the Trust
Indenture Act and the Declaration, the holders of the Preferred Securities
will have no voting rights.
Subject to the requirements of the second to last sentence of this
paragraph, the holders of a majority in aggregate liquidation amount of the
Preferred Securities have the right (i) on behalf of all holders of Preferred
Securities, to waive any past default that is waivable under the Declaration
and (ii) to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under the Declaration, including
the right to direct the Property Trustee, as the holder of the Junior
Subordinated Debentures, to (A) direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee
(as defined herein), or executing any trust or power conferred on the
Indenture Trustee with respect to the Junior Subordinated Debentures, (B)
waive any past default that is waivable under Section 6.06 of the Indenture,
or (C) exercise any right to rescind or annul a declaration that the
principal of all the Junior Subordinated Debentures shall be due and payable;
provided that where a consent under the Indenture would require the consent
of (a) holders of Junior Subordinated Debentures representing a specified
percentage greater than a majority in principal amount of the Junior
Subordinated Debentures or (b) each holder of Junior Subordinated Debentures
affected thereby, no such consent shall be given by the Property Trustee
without the prior consent of, in the case of clause (a) above, holders of
Preferred Securities representing such specified percentage of the aggregate
liquidation amount of the Preferred Securities or, in the case of clause (b)
above, each holder of all Preferred Securities affected thereby. The Property
Trustee shall not revoke any action previously authorized or approved by a
vote of the holders of Preferred Securities. The Property Trustee shall
notify all holders of record of Preferred Securities of any notice of default
received from the Indenture Trustee with respect to the Junior Subordinated
Debentures. Other than with respect to directing the time, method and place
of conducting any proceeding for any remedy available to the Property Trustee
or the Indenture Trustee as set forth above, the Property Trustee shall be
under no obligation to take any of the foregoing actions at the direction of
the holders of the Preferred Securities unless the Property Trustee shall
have obtained an opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that the Trust will not be
classified for United States Federal income tax purposes as an association
taxable as a corporation or a partnership on account of such action and will
be treated as a grantor trust for United States Federal income tax purposes
following such action. If the Property Trustee fails to enforce its rights
under the Declaration (including, without limitation, its rights, powers and
privileges as a holder of the Debentures under the Indenture), any holder of
Preferred Securities may, to the extent permitted by applicable law, after a
period of 30 days has elapsed from such holder's written request to the
Property Trustee to enforce such rights, institute a legal proceeding
directly against the Company to enforce the Property Trustee's rights under
the Declaration, without first instituting a legal proceeding against the
Property Trustee or any other Person. In addition, holders of at least 25% in
aggregate liquidation preference of the outstanding Preferred Securities
would have the right to directly institute proceedings for enforcement of
payment to such holders of principal of, or premium, if any, or interest on
the Junior Subordinated Debentures having a principal amount equal to the
aggregate liquidation preference of the Preferred Securities of such holders.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Trust Securities.
In the event the consent of the Property Trustee as the holder of the
Junior Subordinated Debentures is required under the Indenture with respect
to any amendment, modification or termination of the Indenture or the Junior
Subordinated Debentures, the Property Trustee shall request the direction of
the holders of the Trust Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a majority in liquidation amount
of the Trust Securities voting together as a single class; provided, however,
that where any such amendment, modification or termination under the
Indenture would require the consent of holders of Junior Subordinated
Debentures representing a specified percentage greater than a majority in
principal amount of the Junior Subordinated Debentures, the Property Trustee
may only give such consent at the
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direction of the holders of Trust Securities representing such specified
percentage of the aggregate liquidation amount of the Trust Securities; and,
provided, further, that the Property Trustee shall be under no obligation to
take any such action in accordance with the directions of the holders of the
Trust Securities unless the Property Trustee has obtained an opinion of
nationally recognized independent tax counsel recognized as expert in such
matters to the effect that the Trust will not be classified for United States
Federal income tax purposes as an association taxable as a corporation or a
partnership on account of such action and will be treated as a grantor trust
for United States Federal income tax purposes following such action.
Any required approval or direction of holders of Preferred Securities may
be given at a separate meeting of holders of Preferred Securities convened
for such purpose, at a meeting of all of the holders of Trust Securities or
pursuant to written consent. The Regular Trustees 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 mailed to each holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is sought;
and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the holders of Preferred Securities will be required
for the Trust to redeem and cancel Preferred Securities or distribute Junior
Subordinated Debentures in accordance with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the
Preferred Securities at such time that are owned by the Company or by any
entity directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company shall not be entitled to vote or
consent and shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
The procedures by which persons owning Preferred Securities registered in
the name of and held by DTC or its nominee may exercise their voting rights
are described under "Book-Entry; Delivery and Form" below.
Holders of the Preferred Securities will have no rights to increase or
decrease the number of Trustees or to appoint, remove or replace a Trustee,
which rights are vested exclusively in the holders of the Common Securities.
MODIFICATION AND AMENDMENT OF THE DECLARATION
The Declaration may be modified and amended on approval of a majority of
the Regular Trustees, provided, that, if any proposed modification or
amendment provides for, or the Regular Trustees otherwise propose to effect,
(a) any action that would adversely affect the powers, preferences or special
rights of the Trust Securities, whether by way of amendment to the
Declaration or otherwise, or (b) the dissolution, winding-up or termination
of the Trust other than pursuant to the terms of the Declaration, then the
holders of the outstanding Trust Securities as a class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of at least 66 2/3% in liquidation
amount of the Trust Securities, provided that if any amendment or proposal
referred to above would adversely affect only the Preferred Securities or the
Common Securities, then only the affected class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of 66 2/3% in liquidation amount of such
class of Securities.
Notwithstanding the foregoing, (i) no amendment or modification may be
made to the Declaration unless the Regular Trustees shall have obtained (a)
either a ruling from the Internal Revenue Service or a written unqualified
opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that such amendment will not cause the Trust to be
classified for United States Federal income tax purposes as an association
taxable as a corporation or a partnership and to the effect that the Trust
will continue to be treated as a grantor trust for purposes of United States
Federal income taxation and (b) a written unqualified opinion of nationally
recognized independent counsel experienced
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in such matters to the effect that such amendment will not cause the Trust to
be an "investment company" which is required to be registered under the 1940
Act; (ii) certain specified provisions of the Declaration may not be amended
without the consent of all of the holders of the Trust Securities; (iii) no
amendment which adversely affects the rights, powers and privileges of the
Property Trustee shall be made without the consent of the Property Trustee;
(iv) Article IV of the Declaration relating to the obligation of the Company
to purchase the Common Securities and to pay certain obligations and expenses
of the Trust as described under "The DLJ Trusts" in the accompanying
Prospectus may not be amended without the consent of the Company; and (v) the
rights of holders of Common Securities under Article V of the Declaration to
increase or decrease the number of, and to appoint, replace or remove,
Trustees shall not be amended without the consent of each holder of Common
Securities.
The Declaration further provides that it may be amended without the
consent of the holders of the Trust Securities to (i) cure any ambiguity;
(ii) correct or supplement any provision in the Declaration that may be
defective or inconsistent with any other provision of the Declaration; (iii)
to add to the covenants, restrictions or obligations of the Company; and (iv)
to conform to changes in, or a change in interpretation or application of
certain 1940 Act requirements by the Commission, which amendment does not
adversely affect the rights, preferences or privileges of the holders.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary for
the Preferred Securities. The Preferred Securities will be issued only as
fully registered securities registered in the name of DTC or its nominee. One
or more fully-registered global Preferred Securities certificates (each a
"Preferred Securities Global Certificate"), representing the total aggregate
number of Preferred Securities, will be issued and will be deposited with
DTC.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in a global Preferred
Security.
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 ("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 ("Direct
Participants"). DTC is owned by a number of its Direct Participants and by
the NYSE, 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 a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules applicable
to DTC and its Participants are on file with the Securities and Exchange
Commission.
Upon issuance of a Preferred Securities Global Certificate, DTC will
credit on its book-entry registration and transfer system the number of
Preferred Securities represented by such Preferred Securities Global
Certificate to the accounts of institutions that have accounts with DTC.
Ownership of beneficial interests in a Preferred Securities Global
Certificate will be limited to Participants or persons that may hold
interests through Participants. The ownership interest of each actual
purchaser of each Preferred Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which the
Beneficial Owners purchased Preferred Securities. Transfers of ownership
interests in the Preferred Securities are to be accomplished by entries made
on the books of Participants acting on behalf of Beneficial Owners.
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DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Preferred Securities 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. So long as DTC, or its nominee, is the owner of a Preferred
Securities Global Certificate, DTC or such nominee, as the case may be, will
be considered the sole owner and holder of record of the Preferred Securities
represented by such Preferred Securities Global Certificate for all purposes.
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 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 shall be sent to Cede & Co. If less than all of the
Preferred Securities are being redeemed, DTC will reduce pro rata (subject to
adjustment to eliminate fractional Preferred Securities) the amount of
interest of each Direct Participant in the Preferred Securities to be
redeemed.
Although voting with respect to the Preferred Securities is limited, in
those instances in which a vote is required, neither DTC nor Cede & Co.
itself will consent or vote with respect to Preferred Securities. Under its
usual procedures, DTC would mail an Omnibus Proxy to the Trust 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
the Preferred Securities are credited on the record date (identified in a
listing attached to the Omnibus proxy).
Distribution payments on the Preferred Securities represented by a
Preferred Series Global Certificate will be made by the Property 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 Participants and not of DTC, the Trust or the
Company, 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 Trust, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments
to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
Except as provided herein, a Beneficial Owner in a global Preferred
Security certificate will not be entitled to receive physical delivery of
Preferred Securities. Accordingly, each Beneficial Owner must rely on the
procedures of DTC to exercise any rights under the Preferred Securities.
DTC may discontinue providing its services as securities depository with
respect to the Preferred Securities at any time by giving reasonable notice
to the Trust. Under such circumstances, if a successor securities depository
is not obtained, Preferred Security certificates will be required to be
printed and delivered. Additionally, the Trust may decide to discontinue use
of the system of book-entry transfers through DTC (or a successor
depository). In that event, certificates for the Preferred Securities 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 Trust and the Company believe to be
reliable, but the Trust and the Company take no responsibility for the
accuracy thereof.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
In the event the Preferred Securities do not remain in book-entry only
form, the following provisions will apply:
Payment of distributions and payments on redemption of the Preferred
Securities will be payable, the transfer of the Preferred Securities will be
registrable, and Preferred Securities will be exchangeable for Preferred
Securities of other denominations of a like aggregate liquidation amount, at
the principal corporate trust office of the Property Trustee in The City of
New York; provided that payment of
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distributions may be made at the option of the Regular Trustees on behalf of
the Trust by check mailed to the address of the persons entitled thereto and
that the payment on redemption of any Preferred Security will be made only
upon surrender of such Preferred Security to the Property Trustee.
The Bank of New York or one of its affiliates will act as registrar and
transfer agent for the Preferred Securities. The Bank of New York will also
act as paying agent and, with the consent of the Regular Trustees, may
designate additional paying agents.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of the Trust, but upon payment (with the giving of
such indemnity as the Trust or the Company may require) in respect of any tax
or other governmental charges that may be imposed in relation to it.
The Trust will not be required to register or cause to be registered the
transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to a default with respect to the Trust
Securities, undertakes to perform only such duties as are specifically set
forth in the Declaration and, after default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her
own affairs. Subject to such provision, the Property Trustee is under no
obligation to exercise any of the powers vested in it by the Declaration at
the request of any holder of Preferred Securities, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which
might be incurred thereby. The Property 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 Property Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
The Company and certain of its affiliates maintain a deposit account and
banking relationship with the Property Trustee.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to take such action as
they deem reasonable in order that the Trust will not be deemed to be an
"investment company" required to be registered under the 1940 Act or that the
Trust will not be classified for United States Federal income tax purposes as
an association taxable as a corporation or a partnership and will be treated
as a grantor trust for United States Federal income tax purposes. In this
connection, the Regular Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust or the
Declaration, that the Regular Trustees determine in their discretion to be
reasonable and necessary or desirable for such purposes, as long as such
action does not adversely affect the interests of holders of the Trust
Securities.
The Company and the Regular Trustees on behalf of the Trust will be
required to provide to the Property Trustee annually a certificate as to
whether or not the Company and the Trust, respectively, is in compliance with
all the conditions and covenants under the Declaration.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of the Junior Subordinated Debentures in
which the Trust will invest the proceeds from the issuance and sale of the
Trust Securities and which will be deposited in the Trust as trust assets.
The terms of the Junior Subordinated Debentures include those stated in the
Indenture dated , 1996 between the Company and The Bank of New York, as
trustee (the "Indenture Trustee") as supplemented by the First Supplemental
Indenture dated , 1996 between the Company and the Indenture Trustee (as
so supplemented, the "Indenture"), forms of which have been filed as exhibits
to the Registration Statement of which this Prospectus Supplement forms a
part, and those made part of the Indenture by the Trust Indenture Act. This
description supplements the description of the general terms and provisions
of the Subordinated Debt Securities set forth in the accompanying Prospectus
under the caption "Description of the Junior Subordinated Debt Securities."
The following description does not purport to be complete and is qualified in
its entirety by reference to the Indenture and the Trust Indenture Act.
Whenever particular provisions or defined terms in the Indenture are referred
to herein, such provisions or defined terms are incorporated by reference
herein. Section and Article references used herein are references to
provisions of the Indenture.
The Indenture does not limit the aggregate principal amount of
indebtedness which may be issued thereunder and provides that junior
subordinated debentures may be issued thereunder from time to time in one or
more series (collectively, together with the Junior Subordinated Debentures,
the "Subordinated Debentures"). The Junior Subordinated Debentures constitute
a separate series under the Indenture.
Under certain circumstances involving the dissolution of the Trust
following the occurrence of a Special Event, Junior Subordinated Debentures
may be distributed to the holders of the Trust Securities in liquidation of
the Trust. See "Description of the Preferred Securities--Special Event
Redemption or Distribution."
GENERAL
The Junior Subordinated Debentures are unsecured, subordinated obligations
of the Company, limited in aggregate principal amount to an amount equal to
the sum of (i) the stated liquidation amount of the Preferred Securities
issued by the Trust and (ii) the proceeds received by the Trust upon issuance
of the Common Securities to the Company (which proceeds will be used to
purchase an equal principal amount of Junior Subordinated Debentures).
The entire principal amount of the Junior Subordinated Debentures will
become due and payable, together with any accrued and unpaid interest
thereon, on , 2046. The Junior Subordinated Debentures are not subject to
any sinking fund.
If Junior Subordinated Debentures are distributed to holders of Preferred
Securities in dissolution of the Trust, such Junior Subordinated Debentures
will initially be issued as a Global Security (as defined below). As
described herein, under certain limited circumstances, Junior Subordinated
Debentures may be issued in certificated form in exchange for a Global
Security. See "Book-Entry and Settlement" below. In the event that Junior
Subordinated Debentures are issued in certificated form, such Junior
Subordinated Debentures will be in denominations of $25 and integral
multiples thereof and may be transferred or exchanged at the offices
described below. Payments on Junior Subordinated Debentures issued as a
Global Security will be made to DTC, a successor depositary or, in the event
that no depositary is used, to a paying agent for the Junior Subordinated
Debentures.
In the event that Junior Subordinated Debentures are issued in
certificated form, payments of principal and interest will be payable, the
transfer of the Junior Subordinated Debentures will be registrable, and
Junior Subordinated Debentures will be exchangeable for Junior Subordinated
Debentures of other denominations of a like aggregate principal amount, at
the corporate trust office of the Indenture Trustee in The City of New York;
provided that payment of interest may be made at the option of the Company by
check mailed to the address of the persons entitled thereto and that the
payment of principal with respect to any Junior Subordinated Debenture will
be made only upon surrender of such Junior Subordinated Debenture to the
Indenture Trustee.
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If the Junior Subordinated Debentures are distributed to the holders of
Preferred Securities upon the dissolution of the Trust, the Company will use
its best efforts to list the Junior Subordinated Debentures on the NYSE or on
such other exchange on which the Preferred Securities are then listed.
OPTIONAL REDEMPTION
Except as provided below, the Junior Subordinated Debentures may not be
redeemed prior to , 2001. The Company shall have the right to redeem the
Junior Subordinated Debentures, in whole or in part, from time to time, on or
after , 2001 upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to 100% of the principal amount to be redeemed, plus
any accrued and unpaid interest, to the redemption date, including interest
accrued during an Extension Period. The Company will also have the right to
redeem the Junior Subordinated Debentures at any time upon the occurrence of
a Tax Event if certain conditions are met as described under "Description of
the Preferred Securities--Special Event Redemption or Distribution."
If the Company gives a notice of redemption in respect of Junior
Subordinated Debentures (which notice will be irrevocable) then, by 12:00
noon, New York City time, on the redemption date, the Company will deposit
irrevocably with the Indenture Trustee funds sufficient to pay the applicable
redemption price and will give irrevocable instructions and authority to pay
such redemption price to the holders of the Junior Subordinated Debentures.
If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, interest will cease to accrue
on the Junior Subordinated Debentures called for redemption, such Junior
Subordinated Debentures will no longer be deemed to be outstanding and all
rights of holders of such Junior Subordinated Debentures so called for
redemption will cease, except the right of the holders of such Junior
Subordinated Debentures to receive the applicable redemption price, but
without interest on such redemption price. If any date fixed for redemption
of Junior Subordinated Debentures is not a Business Day, then payment of the
redemption price 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 falls in the next
calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the redemption price in respect of
Junior Subordinated Debentures is improperly withheld or refused and not paid
by the Company, interest on such Junior Subordinated Debentures will continue
to accrue, from the original redemption date to the date of payment, in which
case the actual payment date will be considered the date fixed for redemption
for purposes of calculating the applicable redemption price. If fewer than
all of the Junior Subordinated Debentures are to be redeemed, the Junior
Subordinated Debentures to be redeemed shall be selected by lot or pro rata
or in some other equitable manner determined by the Indenture Trustee.
In the event of any redemption in part, the Company shall not be required
to (i) issue, register the transfer of or exchange any Junior Subordinated
Debentures during a period beginning at the opening of business 15 days
before any selection for redemption of Junior Subordinated Debentures and
ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all holders of Junior
Subordinated Debentures to be redeemed and (ii) register the transfer of or
exchange any Junior Subordinated Debentures so selected for redemption, in
whole or in part, except the unredeemed portion of any Junior Subordinated
Debentures being redeemed in part. (Section 2.05)
INTEREST
The Junior Subordinated Debentures will bear interest at the rate of %
per annum from the original date of issuance. Interest will be payable
monthly in arrears on the day of each month (each, an "Interest Payment
Date"), commencing on to the person in whose name such Junior
Subordinated Debenture is registered, subject to certain exceptions, at the
close of business on the Business Day next preceding such Interest Payment
Date. In the event (i) the Preferred Securities shall not continue to remain
in book-entry only form or (ii) if following distribution of the Junior
Subordinated Debentures to holders of Trust Securities upon dissolution of
the Trust as described under "Description
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of the Preferred Securities," the Junior Subordinated Debentures shall not
continue to remain in book-entry only form, the Company shall have the right
to select record dates which shall be more than one Business Day prior to the
Interest Payment Date. Interest payable on any Junior Subordinated Debenture
that is not punctually paid or duly provided for on any interest payment date
will forthwith cease to be payable to the person in whose name such Junior
Subordinated Debenture is registered on the relevant record date, and such
defaulted interest will instead be payable to the person in whose name such
Junior Subordinated Debenture is registered on the special record date or
other specified date determined in accordance with the Indenture; provided,
however, that interest shall not be considered payable by the Company on any
interest payment date falling within an Extension Period unless the Company
has elected to make a full or partial payment of interest accrued on the
Junior Subordinated Debentures on such interest payment date.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months and for any period shorter
than a full monthly period for which interest is computed, the amount of
interest payable will be computed on the basis of the actual number of days
lapsed in such a 30-day month. If any date on which interest is payable on
the Junior 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 such
date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as the Company shall not be in default in the payment of interest
on the Junior Subordinated Debentures, the Company shall have the right to
extend the interest payment period from time to time for period not exceeding
60 consecutive months. The Company has no current intention of exercising its
right to extend an interest payment period. No interest shall be due and
payable during an Extension Period, except at the end thereof. During any
Extension Period, the Company shall not declare or pay any dividends on, or
redeem, purchase, acquire or make a distribution or liquidation payment with
respect to, any of its common stock or preferred stock or make any guarantee
payments with respect thereto; provided that (i) the Company will be
permitted to pay accrued dividends upon exchange or redemption of any series
of preferred stock of the Company as may be outstanding from time to time, in
accordance with the terms of such stock and (ii) the foregoing will not apply
to stock dividends paid by the Company. Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period;
provided that such Extension Period together with all such previous and
further extensions thereof may not exceed 60 consecutive months. On the
interest payment date occurring at the end of each Extension Period, the
Company shall pay to the holders of Junior Subordinated Debentures of record
on the record date for such interest payment date (regardless of who the
holders of record may have been on other dates during the Extension Period)
all accrued and unpaid interest on the Junior Subordinated Debentures,
together with interest thereon at the rate specified for the Junior
Subordinated Debentures to the extent permitted by applicable law, compounded
monthly ("Compounded Interest"). Upon the termination of any Extension Period
and the payment of all amounts then due, the Company may commence a new
Extension Period, subject to the above requirements. The Company may also
prepay at any time all or any portion of the interest accrued during an
Extension Period. Consequently, there could be multiple Extension Periods of
varying lengths throughout the term of the Junior Subordinated Debentures,
not to exceed 60 consecutive months or to cause any extension beyond maturity
of the Junior Subordinated Debentures. The failure by the Company to make
interest payments during an Extension Period would not constitute a default
or an event of default under the Indenture or the Company's currently
outstanding indebtedness.
If the Property Trustee shall be the sole holder of the Junior
Subordinated Debentures, the Company shall give the Property Trustee notice
of its selection of such Extension Period one Business Day prior to the
earlier of (i) the date the distributions on the Preferred Securities are
payable or (ii) the date the Trust
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is required to give notice to the NYSE or other applicable self-regulatory
organization or to holders of the Preferred Securities of the record date or
the date such distribution is payable. The Trust shall give notice of the
Company's selection of such Extension Period to the holders of the Preferred
Securities.
If Junior Subordinated Debentures have been distributed to holders of
Trust Securities, the Company shall give the holders of the Junior
Subordinated Debentures notice of its selection of such Extension Period ten
Business Days prior to the earlier of (i) the next succeeding Interest
Payment Date or (ii) the date the Company is required to give notice to the
NYSE (if the Junior Subordinated Debentures are then listed thereon) or other
applicable self-regulatory organization or to holders of the Junior
Subordinated Debentures of the record or payment date of such related
interest payment.
COMPOUNDED INTEREST
Payments of Compounded Interest on the Junior Subordinated Debentures held
by the Trust will make funds available to pay any interest on distributions
in arrears in respect of the Preferred Securities pursuant to the terms
thereof.
BOOK-ENTRY AND SETTLEMENT
If any Junior Subordinated Debentures are distributed to holders of
Preferred Securities (see "Description of the Preferred Securities"), such
Junior Subordinated Debentures will be issued in the form of one or more
global certificates (each a "Global Security") registered in the name of the
Depositary or its nominee. Except under the limited circumstances described
below, Junior Subordinated Debentures represented by the Global Security will
not be exchangeable for, and will not otherwise be issuable as, Junior
Subordinated Debentures in definitive form. The Global Securities described
above may not be transferred except by the depositary to a nominee of the
depositary or by a nominee of the depositary to the depositary or another
nominee of the depositary or to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a Global
Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Junior
Subordinated Debentures in definitive form and will not be considered the
holders (as defined in the Indenture) thereof for any purpose under the
Indenture, and no Global Security representing Junior Subordinated Debentures
shall be exchangeable, except for another Global Security of like
denomination and tenor to be registered in the name of the Depositary or its
nominee or to a successor Depositary or its nominee. Accordingly, each
Beneficial Owner must rely on the procedures of the Depositary or if such
person is not a Participant, on the procedures of the Participant through
which such person owns its interest to exercise any rights of a holder under
the Indenture. If Junior Subordinated Debentures are distributed to holder of
Preferred Securities, DTC will act as securities depositary for the Junior
Subordinated Debentures.
For a description of DTC and DTC's book-entry system, see "Description of
Preferred Securities-- Book-Entry Only Issuance--The Depository Trust
Company." As of the date of this Prospectus Supplement, the description
herein of DTC's book-entry system and DTC's practices as they relate to
purchases, transfers, notices and payments with respect to the Preferred
Securities apply in all material respects to any debt obligations represented
by one or more Global Securities held by DTC. The Company may appoint a
successor to DTC or any successor depositary in the event DTC or such
successor depositary is unable or unwilling to continue as a depository for
the Global Securities.
None of the Company, the Indenture Trustee, any paying agent and any other
agent of the Company or the Indenture Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in a Global Security for such
Junior Subordinated Debentures or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
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A Global Security shall be exchangeable for Junior Subordinated
Debentures registered in the names of persons other than the depositary or
its nominee only if (i) the depositary notifies the Company that it is
unwilling or unable to continue as a depositary for such Global Security and
no successor depositary shall have been appointed; (ii) the depositary, at
any time, ceases to be a clearing agency registered under the Exchange Act at
which time the depositary is required to be so registered to act as such
depositary and no successor depositary shall have been appointed; (iii) the
Company, in its sole discretion, determines that such Global Security shall
be so exchangeable; or (iv) there shall have occurred an Indenture Event of
Default with respect to such Junior Subordinated Debentures. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Junior Subordinated Debentures registered in such names as
the depositary shall direct. It is expected that such instructions will be
based upon directions received by the depositary from its Participants with
respect to ownership of beneficial interests in such Global Security.
RELATIONSHIP BETWEEN THE PREFERRED SECURITIES, THE JUNIOR
SUBORDINATED DEBENTURES AND THE PREFERRED SECURITIES GUARANTEE
As set forth in the Declaration, the Trust exists for the sole purpose of
(a) issuing the Trust Securities evidencing undivided beneficial interests in
the assets of the Trust, and investing the proceeds from such issuance and
sale in the Junior Subordinated Debentures and (b) engaging in such other
activities as are necessary and incidental thereto.
As long as payments of interest and other payments are made when due on
the Junior Subordinated Debentures, such payments will be sufficient to cover
distributions and other payments due on the Preferred Securities primarily
because (i) the aggregate principal amount of Junior Subordinated Debentures
held as trust assets will be equal to the sum of the aggregate stated
liquidation amount of the Preferred Securities and the proceeds received by
the Trust upon issuance of the Common Securities to the Company; (ii) the
interest rate and interest and other payment dates on the Junior Subordinated
Debentures will match the distribution rate and distribution and other
payment dates for the Preferred Securities; (iii) the Declaration provides
that the Company shall pay for all debts and obligations (other than with
respect to the Trust Securities) and all costs and expenses of the Trust,
including any taxes and all costs and expenses with respect thereto, to which
the Trust may become subject, except for United States withholding taxes; and
(iv) the Declaration further provides that the Trustees shall not cause or
permit the Trust, among other things, to engage in any activity that is not
consistent with the limited purposes of the Trust. With respect to clause
(iii) above, however, no assurance can be given that the Company will have
sufficient resources to enable it to pay such debts, obligations, costs and
expenses on behalf of the Trust.
Payments of distributions and other payments due on the Preferred
Securities are guaranteed by the Company on a subordinated basis as and to
the extent set forth under "Description of the Preferred Securities
Guarantee" in the accompanying Prospectus. If the Company does not make
interest or other payments on the Junior Subordinated Debentures, the Trust
will not make distributions or other payments on the Preferred Securities.
Under the Declaration, if and to the extent the Company does make interest or
other payments on the Junior Subordinated Debentures, the Property Trustee is
obligated to make distributions or other payments on the Preferred
Securities. The Preferred Securities Guarantee is a full and unconditional
guarantee from the time of issuance of the Preferred Securities, but the
Preferred Securities Guarantee covers distributions and other payments on the
Preferred Securities only if and to the extent that the Company has made a
payment to the Property Trustee of interest or principal on the Junior
Subordinated Debentures deposited in the Trust as trust assets.
The Property Trustee will have the Power to exercise all rights, powers
and privileges under the Indenture with respect to the Junior Subordinated
Debentures, including its rights as the holder of the Junior Subordinated
Debentures to enforce the Company's obligations under the Junior Subordinated
Debentures upon the occurrence of an Indenture Event of Default, and will
also have the right to enforce the Preferred Securities Guarantee on behalf
of the holders of the Preferred Securities. In addition, the holders of at
least a majority in liquidation amount of the Preferred Securities will have
the right to direct the Property Trustee with respect to certain matters
under the Declaration and the Preferred Securities
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Guarantee. If the Property Trustee fails to enforce its rights under the
Indenture any holder of Preferred Securities may, after a period of 30 days
has elapsed from such holder's written request to the Property Trustee to
enforce such rights institute a legal proceeding against the Company to
enforce such rights. If the Property Trustee fails to enforce the Preferred
Securities Guarantee, to the extent permitted by applicable law, any holder
of Preferred Securities may institute a legal proceeding directly against the
Company to enforce the Property Trustee's rights under the Preferred
Securities Guarantee. In addition, holders of at least 25% in aggregate
liquidation preference of the outstanding Preferred Securities would have the
right to directly institute proceedings for enforcement of payment to such
holders of principal of, or premium, if any, or interest on the Junior
Subordinates Debentures having a principal amount equal to the aggregate
liquidation preference of the Preferred Securities of such holders. See
"Description of the Preferred Securities" and "Description of the Preferred
Securities Guarantee" in the accompanying Prospectus Supplement.
The above mechanisms and obligations, taken together, provide a full and
unconditional guarantee by the Company of payments due on the Preferred
Securities.
S-32
<PAGE>
TAXATION
In the opinion of Davis Polk & Wardwell, counsel to the Company and the
Trust, the following are the material United States Federal income tax
consequences of the ownership and disposition of Preferred Securities. Unless
otherwise stated, this summary deals only with Preferred Securities held as
capital assets by holders who acquire the Preferred Securities upon original
issuance ("Initial Holders"). It does not deal with special classes of
holders, such as dealers in securities or currencies, life insurance
companies, persons holding Preferred Securities as part of a straddle or as
part of a hedging or conversion transaction, or persons whose functional
currency is not the United States dollar. This summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"). Treasury Regulations
thereunder and administrative and judicial interpretations thereof are of the
date hereof, all of which are subject to change (possibly on a retroactive
basis).
INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF
PREFERRED SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS
THE EFFECT OF ANY STATE, LOCAL OR OTHER TAX LAWS.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Preferred Securities, Davis Polk &
Wardwell, counsel to the Company and the Trust, will render its opinion
generally to the effect that, under then current law and assuming full
compliance with the terms of the Declaration, the Trust will be classified
for United States Federal income tax purposes as a grantor trust and not as
an association taxable as a corporation. Accordingly, each holder of
Preferred Securities (a "Securityholder") will be considered the owner of a
pro rata portion of the Junior Subordinated Debentures held by the Trust.
Accordingly, each Securityholder will be required to include in gross income
his pro rata share of income accrued on the Junior Subordinated Debentures.
ACCRUAL OF ORIGINAL ISSUE DISCOUNT AND PREMIUM
The Junior Subordinated Debentures will be considered to have been issued
with "original issue discount" and each Securityholder, including a taxpayer
who otherwise uses the cash method of accounting, will be required to include
his pro rata share of original issue discount on the Junior Subordinated
Debentures in income as it accrues, in accordance with a constant yield
method based on a compounding of interest, before the receipt of cash
distributions on the Preferred Securities. Generally, all of a
Securityholder's taxable interest income with respect to the Junior
Subordinated Debentures will be accounted for as "original issue discount"
and actual distributions of stated interest will not be separately reported
as taxable income. So long as the interest payment period is not extended,
cash distributions received by an initial Holder for any monthly interest
period (assuming no disposition prior to the record date for such
distribution) will equal or exceed the sum of the daily accruals of income
for such monthly interest period, unless the issue price of the Junior
Subordinated Debentures (as defined below) is less than $25.
The total amount of "original issue discount" on the Junior Subordinated
Debentures will equal the difference between the "issue price" of the Junior
Subordinated Debentures and their "stated redemption price at maturity."
Because the Company has the right to extend the interest payment period of
the Junior Subordinated Debentures, all of the stated interest payments on
the Junior Subordinated Debentures will be includible in determining their
"stated redemption price at maturity." The "issue price" of each $25
principal amount of Junior Subordinated Debentures will be equal to the first
price to the public at which a substantial amount of the Preferred Securities
is sold for cash, which is expected to be $25.
A Securityholder's initial tax basis for his pro rata share of the Junior
Subordinated Debentures will be equal to his pro rata share of their "issue
price," as defined above, and will be increased by original issue discount
accrued with respect to his pro rata share of the Junior Subordinated
Debentures, and reduced by the amount of cash distributions with respect
thereto. No portion of the amounts received on the Preferred Securities will
be eligible for the dividends received deduction.
S-33
<PAGE>
POTENTIAL EXTENSION OF PAYMENT PERIOD ON THE JUNIOR SUBORDINATED DEBENTURES
Securityholders will continue to accrue original issue discount with
respect to their pro rata share of the Junior Subordinated Debentures during
an extended interest payment period, and any holders who dispose of Preferred
Securities prior to the record date for the payment of interest following
such extended interest payment period will not receive from the Trust any
cash related thereto.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF PREFERRED
SECURITIES
Under current law, a distribution by the Trust of the Junior Subordinated
Debentures as described under the caption "Description of the Preferred
Securities--Special Event Redemption or Distribution," will be non-taxable
and will result in the Securityholder receiving directly his pro rata share
of the Junior Subordinated Debentures previously held indirectly through the
Trust, with a holding period and tax basis equal to the holding period and
adjusted tax basis such Securityholder was considered to have had in his pro
rata share of the underlying Junior Subordinated Debentures prior to such
distribution.
MARKET DISCOUNT AND BOND PREMIUM
Securityholders other than Initial Holders may be considered to have
acquired their pro rata interest in the Junior Subordinated Debentures with
market discount, acquisition premium or amortizable bond premium. Such
holders are advised to consult their tax advisors as to the income tax
consequences of the acquisition, ownership and disposition of the Preferred
Securities.
DISPOSITION OF THE PREFERRED SECURITIES
Upon a sale, exchange or other disposition of the Preferred Securities
(including a distribution of cash in redemption of a Securityholder's
Preferred Securities upon redemption or repayment of the underlying Junior
Subordinated Debentures, but excluding the distribution of Junior
Subordinated Debentures), a Securityholder will be considered to have
disposed of all or part of his pro rata share of the Junior Subordinated
Debentures, and will recognize gain or loss equal to the difference between
the amount realized and the Securityholder's adjusted tax basis in his pro
rata share of the underlying Junior Subordinated Debentures deemed disposed
of. Gain or loss will be capital gain or loss (except to the extent of any
accrued market discount with respect to such Securityholder's pro rata share
of the Junior Subordinated Debentures not previously included in income). See
"Market Discount and Bond Premium" above. Such gain or loss will be long-term
capital gain or loss if the Preferred Securities have been held for more than
one year.
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A Securityholder who disposes of his
Preferred Securities between record dates for payments of distributions
thereon will nevertheless be required to include accrued but unpaid interest
on the Junior Subordinated Debentures through the date of disposition in
income as ordinary income, and to add such amount to his adjusted tax basis
in his pro rate share of the underlying Junior Subordinated Debentures deemed
disposed of. Accordingly, such a Securityholder will recognize a capital loss
to the extent the selling price (which may not fully reflect the value of
accrued but unpaid interest) is less than the Securityholder's adjusted tax
basis (which will include accrued but unpaid interest). Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary
income for United States Federal income tax purposes.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is as to the
United States, a foreign corporation, a non-resident alien individual, a
foreign partnership or a non-resident fiduciary of a foreign estate or trust.
Under present United States Federal income tax law:
(i) payments by the Trust or any of its paying agents to any holder of
a Preferred Security who or which is a United States Alien Holder will not
be subject to United States federal withholding tax,
S-34
<PAGE>
provided that (a) the beneficial owner of the Preferred Security does not
actually or constructively own 10% or more of the total combined voting
power of all classes of stock of the Company entitled to vote; (b) the
beneficial owner of the Preferred Security is not a controlled foreign
corporation that is related to the Company through stock ownership; and
(c) either (A) the beneficial owner of the Preferred Security certifies to
the Trust or its agent, under penalties of perjury, that it is not a
United States holder and provides its name and address or (B) a securities
clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"Financial Institution") and holds the Preferred Security certifies to the
Trust or its agent under penalties of perjury that such statement has been
received from the beneficial owner by it or by a Financial Institution
between it and the beneficial owner and furnishes the Trust or its agent
with a copy thereof; and
(ii) A United States Alien Holder of a Preferred Security will not be
subject to United States federal withholding tax on any gain realized upon
the sale or other disposition of a Preferred Security.
INFORMATION REPORTING TO HOLDERS
The Trust will report the original issue discount that accrued during the
year with respect to the Junior Subordinated Debentures, and any gross
proceeds received by the Trust from the retirement or redemption of the
Junior Subordinated Debentures, annually to the holders of record of the
Preferred Securities and the Internal Revenue Service. The Trust currently
intends to deliver such reports to holders of record prior to January 31
following each calendar year. It is anticipated that persons who hold
Preferred Securities as nominees for beneficial holders will report the
required tax information to beneficial holders on Form 1099.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of Preferred Securities may
be subject to a "backup" withholding tax of 31% unless the holder complies
with certain identification requirements. Any withheld amounts will generally
be allowed as a credit against the holder's Federal income tax, provided the
required information is timely filed with the Internal Revenue Service.
POSSIBLE TAX LAW CHANGES
If enacted in their present form, certain legislative proposals in the
Revenue Reconciliation Bill of 1996 (the "Bill") would prevent the Company
from deducting interest on the Junior Subordinated Debentures. The Bill as
proposed would be effective generally for instruments issued on or after
December 7, 1995. However, on March 29, 1996, the Chairmen of the Senate
Finance and House Ways and Means Committees issued a joint statement to the
effect that it was their intention that the effective date of the President's
legislative proposals, if adopted, will be no earlier than the date of
appropriate Congressional action. There can be no assurance, however, that
current or future legislative proposals if enacted would not prevent the
Company from deducting interest on the Junior Subordinated Debentures. This
would constitute a Tax Event and could result in the distribution of the
Junior Subordinated Debentures to holders of the Preferred Securities or, in
certain circumstances, the redemption of such securities by the Company and
the distribution of the resulting cash in redemption of the Preferred
Securities. See "Description of the Preferred Securities--Special Event
Redemption or Distribution."
S-35
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
dated the date hereof (the "Underwriting Agreement"), the Company and the
Trust have agreed that the Trust will sell to each of the Underwriters named
below, and each of the Underwriters, for whom Donaldson, Lufkin & Jenrette
Securities Corporation is acting as representative (the "Representative"),
has severally agreed to purchase the number of Preferred Securities set forth
opposite its name below.
<TABLE>
<CAPTION>
NUMBER OF
PREFERRED
UNDERWRITER SECURITIES
- ------------------------------------------------------- --------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation ...
--------------
Total .................................................
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the Preferred Securities
offered hereby are subject to approval of certain legal matters by counsel
and to certain other conditions. If any Preferred Securities are purchased by
the Underwriters pursuant to the Underwriting Agreement, all such Preferred
Securities must be purchased.
The Underwriters propose to offer the Preferred 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 of $ per Preferred Security,
provided that such concession for sales of 10,000 or more Preferred
Securities to any single purchaser will be $ per Preferred Security. The
Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per Preferred Security to certain brokers and dealers. After
the Preferred Securities are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
Representative.
In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Junior Subordinated Debentures of the
Company, the Underwriting Agreement provides that the Company will agree to
pay as compensation ("Underwriters' Compensation") for the Underwriters'
arranging the investment therein of such proceeds, an amount in same day
funds of $ per Preferred Security or $ in the aggregate ($ in
the aggregate if the Underwriters' overallotment option is exercised in full)
for the accounts of the several Underwriters, provided that such compensation
for sales of 10,000 or more Preferred Securities to any single purchaser will
be $ per Preferred Security. Therefore, to the extent of such sales, the
actual amount of Underwriter's Compensation will be less than the aggregate
amount specified in the preceding sentence.
Pursuant to the Underwriting Agreement, the Trust and the Company have
granted to the Underwriters an option, exercisable for 30 days from the date
hereof, to purchase up to additional Preferred Securities at the
initial public offering price set forth on the cover page hereof. The
Underwriters may exercise such option to purchase solely for the purpose of
covering over-allotments, if any, made in connection with the offering. The
Company will pay Underwriters' Compensation in the amount per Preferred
Security set forth above with respect to such additional Preferred
Securities. To the extent such option is exercised, each Underwriter will
become obligated, subject to certain conditions, to purchase approximately
the same percentage of such additional Preferred Securities as the number set
forth next to such Underwriter's name in the preceding table bears to the
total number of Preferred Securities offered by the Underwriters hereby.
During a period of 30 days from the date of the Prospectus Supplement,
neither the Trust nor the Company will, without the prior written consent of
the Underwriters, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any Preferred Securities,
any security convertible into or exchangeable into or exercisable for
Preferred Securities or any equity securities substantially similar to the
Preferred Securities (except for any series of Junior Subordinated Debentures
and the Preferred Securities offered hereby).
S-36
<PAGE>
Application will be made to list the Preferred Securities on the NYSE. If
so approved, trading of the Preferred Securities on the NYSE is expected to
commence within a 30 day period after the initial delivery of the Preferred
Securities. The Representative has advised the Trust that it intends to make
a market in the Preferred Securities prior to the commencement of trading on
the NYSE. The Representative will have no obligation to make a market in the
Preferred Securities, however, and may cease market making activities, if
commenced, at any time.
The Representative is a wholly-owned subsidiary of the Company. The
Representative has committed to purchase from the Company % of the Preferred
Securities to be purchased in the offering on the same basis as the other
Underwriters. Although the amount of proceeds derived from the offering by
the Company will not be affected by the Representative's participation as an
Underwriter to the extent that part or all of the Preferred Securities to be
purchased by the Representative are not resold, the Preferred Securities
owned by the Representative will be eliminated in consolidation and will not
be shown as outstanding in the consolidated financial statements of the
Company. The Representative intends to resell any Preferred Securities which
it is unable to resell in the offering from time to time, at prevailing
market prices. This Prospectus Supplement, together with the accompanying
Prospectus, may also be used by the Representative in connection with offers
and sales of the Preferred Securities related to market-making transactions
by and through the Representative, at negotiated prices related to prevailing
market prices at the time of sale or otherwise. The Representative may act as
principal or agent in such transactions. The offering of the Preferred
Securities is being conducted in accordance with Schedule E of the NASD
By-Laws.
Prior to this offering, there has been no public market for the Preferred
Securities. In order to meet one of the requirements for listing the
Preferred Securities on the NYSE, the Underwriters will undertake to sell
lots of 100 or more Preferred Securities to a minimum of 400 beneficial
holders.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended or to contribute to payments that the Underwriters may be required to
make in respect thereof.
S-37
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON 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 ACCOMPANYING
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY DONALDSON, LUFKIN & JENRETTE,
INC., DLJ CAPITAL TRUST I OR ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF DONALDSON, LUFKIN & JENRETTE, INC. OR
DLJ CAPITAL TRUST I SINCE THE DATE HEREOF OR THEREOF. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY PREFERRED SECURITIES 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 WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
PROSPECTUS SUPPLEMENT
Selected Consolidated Financial Data ...... S-4
The Company ................................ S-7
DLJ Capital Trust I ........................ S-9
Risk Factors ............................... S-10
Capitalization of the Company .............. S-14
Accounting Treatment ....................... S-15
Use of Proceeds ............................ S-15
Description of the Preferred Securities ... S-16
Description of the Junior Subordinated
Debentures ................................ S-27
Relationship Between the Preferred
Securities, the Junior Subordinated
Debentures and the Preferred Securities
Guarantee ................................. S-31
Taxation ................................... S-33
Underwriting ............................... S-36
PROSPECTUS
Available Information ...................... 2
Incorporation of Certain Documents by
Reference ................................. 2
Use of Proceeds ............................ 3
Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and
Preferred Stock Dividends ................. 3
The Company ................................ 4
The DLJ Trusts ............................. 6
Description of the Preferred Securities ... 10
Description of the Preferred Securities
Guarantees ................................ 11
Description of the Junior Subordinated
Debt Securities ........................... 14
Plan of Distribution ....................... 20
Legal Matters .............................. 21
Experts .................................... 21
</TABLE>
PREFERRED SECURITIES
DLJ
CAPITAL TRUST I
% PREFERRED TRUST SECURITIES
GUARANTEED TO THE EXTENT
SET FORTH HEREIN BY
DONALDSON, LUFKIN & JENRETTE, INC.
PROSPECTUS SUPPLEMENT
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
, 1996
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION DATED JULY 3, 1996
PROSPECTUS
, 1996
$500,000,000
DONALDSON, LUFKIN & JENRETTE, INC.
DEBT SECURITIES AND PREFERRED STOCK
Donaldson Lufkin & Jenrette, Inc. (the "Company") may from time to time
offer, together or separately, (i) senior or subordinated debt securities
(the "Debt Securities") or (ii) shares of its preferred stock, par value
$0.01 per share (the "Preferred Stock"). The Debt Securities and Preferred
Stock are collectively called the "Securities."
The Securities offered pursuant to this Prospectus may be issued in one or
more series or issuances in U.S. dollars or in one or more foreign currencies,
currency units or composite currencies. By separate prospectus, the form of
which is included in the Registration Statement of which this Prospectus forms
a part, four Delaware statutory business trusts (the "Trusts"), which are
wholly owned subsidiaries of the Company, may from time to time severally
offer preferred securities guaranteed by the Company to the extent set forth
therein and the Company may offer from time to time junior subordinated debt
securities either directly or to a Trust. The aggregate initial public
offering price of the securities to be offered by this Prospectus and such
other prospectus shall not exceed $500,000,000 (or its equivalent in one or
more foreign currencies, currency units or composite currencies).
Specific terms of the securities in respect of which this Prospectus is
being delivered (the "Offered Securities") will be set forth in an
accompanying Prospectus Supplement (a "Prospectus Supplement"), together with
the terms of the offering of the Offered Securities, the initial price thereof
and the net proceeds from the sale thereof. The Prospectus Supplement will set
forth with regard to the particular Offered Securities, without limitation,
the following: (i) in the case of Debt Securities, the ranking as senior or
subordinated debt securities, the specific designation, aggregate principal
amount, authorized denomination, maturity, rate (which may be fixed or
variable) or method of calculation of interest and dates for payment thereof,
and any exchangeability, conversion, redemption, prepayment or sinking fund
provisions and any listing on a securities exchange and (ii) in the case of
Preferred Stock, the specific designation, number of shares, purchase price
and the rights, preferences and privileges thereof and any qualifications or
restrictions thereon (including dividends, liquidation value, voting rights,
terms for the redemption, conversion or exchange thereof and any other
specific terms of the Preferred Stock) and any listing on a securities
exchange. Unless otherwise indicated in the Prospectus Supplement, the Company
does not intend to list any of the Securities on a national securities
exchange.
The Offered Securities may be offered directly, through agents designated
from time to time, through dealers or through underwriters. Such agents or
underwriters may act alone or with other agents or underwriters. See "Plan of
Distribution." Any such agents, dealers or underwriters will be set forth in a
Prospectus Supplement. If an agent of the Company, or a dealer or underwriter
is involved in the offering of the Offered Securities, the agent's commission,
dealer's purchase price, underwriter's discount and net proceeds to the
Company, as the case may be, will be set forth in, or may be calculated from,
the Prospectus Supplement. Any underwriters, dealers or agents participating
in the offering may be deemed "underwriters" within the meaning of the
Securities Act of 1933, as amended.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
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 COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The registration
statement of which this Prospectus forms a part, as well as reports, proxy
statements and other information filed by the Company, may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade Center, New York,
New York 10048; and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., 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. The Company's common stock, par value $0.10 per share (the
"Common Stock"), is listed on the New York Stock Exchange, Inc. and reports
and other information concerning the Company can also be inspected at the
office of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.
This Prospectus constitutes a part of the Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Offered Securities. This
Prospectus does not contain all of the information set forth in such
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Reference is made to such
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the Offered Securities. Any
statements contained herein concerning the provisions of any document filed as
an exhibit to the Registration Statement or otherwise filed with the
Commission or incorporated by reference herein are not necessarily complete,
and in each instance reference is made to the copy of such document so filed
for a more complete description of the matter involved. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1995, Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 and
Current Reports on Form 8-K dated February 9, 1996 and February 12, 1996,
previously filed by the Company with the Commission, are incorporated by
reference in this Prospectus.
All documents filed by the Company after the date of this Prospectus
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the termination of the offering of the Offered Securities offered hereby,
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of 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 statements as modified or
superseded shall be deemed, except as so modified or superseded, to constitute
a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may
be incorporated by reference in this Prospectus (other than certain exhibits
to such documents). Requests for such documents should be directed to
Donaldson, Lufkin & Jenrette, Inc., 277 Park Avenue, New York, New York 10172,
Attention: Corporate Secretary (Telephone: (212) 892-3000).
2
<PAGE>
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement,
proceeds from the sale of the Offered Securities will be used by the Company
for general corporate purposes and initially may be temporarily invested in
short-term securities.
RATIOS OF EARNINGS
TO FIXED CHARGES AND EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends for the
Company for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
-------------------------------------- ------------------
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges (1) ................. 1.07 1.21 1.20 1.10 1.11 1.16
Ratio of earnings to combined
fixed charges and preferred
stock dividends (2) ......... -- -- -- 1.09 1.10 1.15
</TABLE>
- ------------
(1) For the purpose of calculating the ratio of earnings to fixed charges
(i) earnings consist of income before provision for income taxes and
fixed charges and (ii) fixed charges consist of interest expense and
one-third of rental expense which is deemed representative of an
interest factor.
(2) For the purpose of calculating the ratio of earnings to combined fixed
charges and preferred stock dividends (i) earnings consist of income
before provision for income taxes and fixed charges and (ii) fixed
charges consist of interest expense and one-third of rental expense
which is deemed representative of an interest factor. No preferred
dividends were paid until 1994.
3
<PAGE>
THE COMPANY
The Company is a leading integrated investment and merchant bank that
serves institutional, corporate, governmental and individual clients. The
Company's businesses include securities underwriting, sales and trading;
merchant banking; financial advisory services; investment research;
correspondent brokerage services; and asset management. While results have
fluctuated from year to year, for the years 1991 through 1995, the Company's
total revenues and net income increased by a compound annual growth rate of
22.8% and 32.7%, respectively. The Company's average annual after-tax return
on common equity for the past five years was 23.1%. At March 31, 1996, the
Company had total assets of $46.6 billion and total stockholders' equity of
$1.3 billion.
The Company's principal strategy is to focus its resources on certain core
businesses where management believes the Company can compete profitably and be
among the leading participants in each targeted market. Over the past several
years, the Company has significantly expanded the scope of its business
activities and its customer base, both in the U.S. and internationally. It has
established strong positions in selected high-margin activities, including
equity and high-yield corporate securities underwriting as well as merchant
banking, and has increased its market share in a broad range of businesses.
Key elements of this expansion have been the Company's recruitment of
experienced professionals during periods of turmoil in the securities
industry, the continued development and retention of the Company's existing
personnel at all levels and the continuity of senior management. In addition,
the Company has historically emphasized economic and investment research in
the development of its business and believes that its commitment to research
has been an important contributor to its success.
The Company conducts its business through three principal operating groups,
each of which is an important contributor to revenues and earnings: the
Banking Group, which includes the Company's Investment Banking, Merchant
Banking and Emerging Markets groups; the Capital Markets Group, consisting of
the Company's institutional debt and equity businesses as well as Sprout, its
venture capital affiliate; and the Financial Services Group, comprised of its
Pershing clearing division, high-net-worth retail brokerage and asset
management businesses.
The Company's Banking Group is a major participant in the raising of
capital and the providing of financial advice to companies throughout the U.S.
and has significantly expanded its activities abroad. Through its Investment
Banking group, the Company manages and underwrites public offerings of
securities, arranges private placements and provides advisory and other
services in connection with mergers, acquisitions, restructurings and other
financial transactions. Since 1991, the Investment Banking group has raised
over $190.0 billion for clients from the public and private markets in
corporate equity and debt securities and has completed over 350 merger and
acquisition, restructuring and divestiture assignments aggregating
approximately $89.0 billion. Its Merchant Banking group pursues direct
investments in a variety of areas through a number of investment vehicles
funded with capital provided primarily by institutional investors, the Company
and its employees. Since the Company began investing in leveraged investments
in 1985 through March 31, 1996, it invested over $1.0 billion on behalf of the
Company, its employees and funds it manages in 52 companies with an aggregate
purchase price of over $19.5 billion and achieved an average annual internal
rate of return substantially in excess of comparable industry benchmarks. The
Emerging Markets group specializes in client advisory services, merchant
banking and the underwriting, sales and trading of securities in Latin
America, Asia and certain other international markets.
The Capital Markets Group encompasses a broad range of activities including
trading, research, origination and distribution of equity and fixed-income
securities, private equity investments and venture capital. Its focus is
primarily client-driven, in contrast to that of many other securities firms
which emphasize proprietary trading, an approach that reduces the Company's
exposure to market volatility. Its Taxable Fixed-Income division provides
institutional clients with research, trading and sales services for a broad
range of taxable fixed-income products including high-yield corporate,
investment-grade corporate, U.S. government and mortgage-backed securities.
The Institutional Equities division provides institutional clients with
research, trading and sales services in U.S. listed and over-the-counter
equity securities. The Company's equity sales and trading capabilities,
combined with its research expertise, have
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contributed to commission revenues increasing, for the years 1991 through
1995, at a compound annual growth rate of 15.6%. In addition, the Company's
Equity Derivatives division provides a broad range of equity and index options
products, while Sprout is one of the oldest and largest groups in the private
equity investment and venture capital industry.
The Financial Services Group provides a broad array of services to
individual investors and the financial intermediaries which represent them.
Pershing is a leading provider of correspondent brokerage services, clearing
transactions for over 600 U.S. brokerage firms which collectively maintain
over 1.3 million client accounts. These client accounts held over $ 127.0
billion of assets at March 31, 1996. During 1995, Pershing accounted for more
than 10% of the daily reported trading volume on the NYSE. In addition,
Pershing's PC Financial Network (Service Mark) , a leading on-line discount
broker in the U.S., has experienced significant growth over the past several
years. The Company's Investment Services Group, which consists of
approximately 270 account executives, provides high-net-worth individuals and
medium to smaller size institutions with access to the Company's equity and
fixed-income research, trading services and underwriting and has one of the
highest revenues per account executive in the industry. Through Wood,
Struthers & Winthrop Management Corp. and affiliates the Company provides
investment management and trust services primarily to high-net-worth
individual investors and institutions, and at March 31, 1996 had over $4.1
billion in assets under management.
Apart from its three principal operating groups, the Company also maintains
a separate brokerage subsidiary, Autranet, Inc., which provides institutional
investors with research generated by independent originators that are not
affiliated with Wall Street brokerage firms.
Founded in 1959, the Company initially focused on providing in-depth
investment research to institutional investors. In 1970, the Company became
the first member firm of the New York Stock Exchange, Inc. to be owned
publicly. Fifteen years later, the Company was purchased by subsidiaries of
The Equitable Companies Incorporated ("EQ") (EQ and its subsidiaries other
than the Company, collectively, "Equitable"). Equitable, which as of March 31,
1996, owned an approximately 80% interest in the Company following the
Company's initial public offering in October 1995, is a diversified financial
services organization and one of the world's largest investment management
organizations. AXA is EQ's largest stockholder, beneficially owning at March
31, 1996, approximately 60.7% of EQ's outstanding shares of common stock and
$392.2 million of EQ's Series E convertible preferred stock.
The principal executive offices of the Company are located at 277 Park
Avenue, New York, NY, 10172 and its telephone number is (212) 892-3000. The
Company has 17 additional offices in 14 locations in the U.S., and ten offices
in Europe, Asia and Latin America.
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DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 150,000,000 shares
of Common Stock, par value $0.10 per share and 25,000,000 shares of Preferred
Stock, par value $0.01 per share. As of March 31, 1996, the Company had
53,300,000 shares of Common Stock and 2,250,000 shares of Cumulative
Exchangeable Preferred Stock outstanding. The following summary description of
the capital stock of the Company is qualified in its entirety by reference to
the Certificate of Incorporation and the Bylaws of the Company, copies of
which have been filed with the Commission.
COMMON STOCK
Subject to the rights of the holders of any Preferred Stock which may be
outstanding, each holder of Common Stock on the applicable record date is
entitled to receive such dividends as may be declared by the Board of
Directors out of funds legally available therefor, and, in the event of
liquidation, to share pro rata in any distribution of the Company's assets
after payment or providing for the payment of liabilities and the liquidation
preference of any outstanding Preferred Stock. Each holder of Common Stock is
entitled to one vote for each share held of record on the applicable record
date on all matters presented to a vote of stockholders, including the
election of directors. Holders of Common Stock have no cumulative voting
rights or preemptive rights to purchase or subscribe for any stock or other
securities and there are no conversion rights or redemption or sinking fund
provisions with respect to such stock. All outstanding shares of Common Stock
are fully paid and nonassessable.
The Common Stock is listed on the New York Stock Exchange under the symbol
"DLJ."
The transfer agent for the Common Stock is First Chicago Trust Company of
New York.
PREFERRED STOCK
The Company's Certificate of Incorporation authorizes 25,000,000 shares of
Preferred Stock. The Company's Board of Directors has the authority to issue
shares of Preferred Stock in one or more series and to fix, by resolution, the
terms of such securities, without any further vote or action by the
stockholders.
The applicable Prospectus Supplement will describe the following terms of
any Preferred Stock in respect of which this Prospectus is being delivered (to
the extent applicable to such Preferred Stock): (i) the specific designation,
number of shares, seniority and purchase price; (ii) any liquidation
preference per share; (iii) any date of maturity; (iv) any redemption,
repayment or sinking fund provisions; (v) any dividend rate or rates and the
dates on which any such dividends will be payable (or the method by which such
rates or dates will be determined); (vi) any voting rights; (vii) if other
than the currency of the United States of America, the currency or currencies
including composite currencies in which such Preferred Stock is denominated
and/or in which payments will or may be payable; (viii) the method by which
amounts in respect of such Preferred Stock may be calculated and any
commodities, currencies or indices, or value, rate or price, relevant to such
calculation; (ix) whether such Preferred Stock is convertible or exchangeable
and, if so, the securities or rights into which such Preferred Stock is
convertible or exchangeable, and the terms and conditions upon which such
conversions or exchanges will be effected including the initial conversion or
exchange prices or rates, the conversion or exchange period and any other
related provisions; (x) the place or places where dividends and other payments
on the Preferred Stock will be payable; and (xi) any additional voting,
dividend, liquidation, redemption and other rights, preferences, privileges,
limitations and restrictions.
All shares of Preferred Stock offered hereby, or issuable upon conversion,
exchange or exercise of Securities, will, when issued, be fully paid and
non-assessable. Any shares of Preferred Stock so issued would have priority
over the Common Stock with respect to dividend or liquidation rights or both.
As of March 31, 1996, the Company had 2,250,000 shares of Cumulative
Exchangeable Preferred Stock outstanding.
CUMULATIVE EXCHANGEABLE PREFERRED STOCK
Dividends. Each holder of Cumulative Exchangeable Preferred Stock is
entitled to receive when, as and if declared by the Board of Directors, out of
funds legally available therefor, cumulative cash dividends of $8.83 per share
per annum, payable quarterly in arrears.
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Liquidation. Upon the dissolution, liquidation or winding up of the
Company, the holders of the Cumulative Exchangeable Preferred Stock will be
entitled to receive out of the assets of the Company available for
distribution to stockholders, an amount in cash equal to (i) the Optional
Redemption Price (as defined below), if such dissolution, liquidation or
winding up is voluntary or (ii) $100 per share plus an amount in cash equal to
all dividends accrued and unpaid thereon to the date fixed for distribution
plus accrued interest thereon if such dissolution, liquidation or winding up
is involuntary, in either case before any payment or distribution shall be
made on the Common Stock or on any other class or series of capital stock of
the Company ranking junior to the Cumulative Exchangeable Preferred Stock.
Exchangeability. Subject to certain conditions, after October 15, 1996, the
Company may exchange the Cumulative Exchangeable Preferred Stock for an equal
principal amount of subordinated notes of the Company bearing a rate of
interest of 9.58% per annum and having the same redemption provisions as the
Cumulative Exchangeable Preferred Stock described below.
Voting Rights. The holders of the Cumulative Exchangeable Preferred Stock
are not entitled to vote at any meeting of stockholders of the Company, except
as set forth below or as otherwise required by law. In the event that (i) the
Company has failed to pay in full the dividends accumulated on the outstanding
shares of the Cumulative Exchangeable Preferred Stock for any six quarterly
dividend payment periods, whether or not consecutive, or (ii) the Company
shall have failed to comply with the provisions for mandatory redemption
described below, then, in each case, the number of directors of the Company
shall be increased by two and holders of shares of Cumulative Exchangeable
Preferred Stock will have the right, voting together as a single class, to
elect such additional directors at the next annual meeting of stockholders of
the Company and at each annual meeting thereafter until the full dividends
accumulated have been paid or the mandatory redemption provisions have been
complied with, as the case may be. Upon termination of such voting rights, the
term of office of each director elected by holders of the Cumulative
Exchangeable Preferred Stock shall terminate and the number of directors
constituting the entire Board of Directors shall be reduced accordingly. The
holders of the Cumulative Exchangeable Preferred Stock will also be entitled
to vote separately as a class in connection with certain actions by the
Company, including (i) any amendment to the Company's Certificate of
Incorporation or the Certificate of Designation relating to the Cumulative
Exchangeable Preferred Stock so as to adversely affect any powers, preferences
or special rights of the Cumulative Exchangeable Preferred Stock, (ii) any
increase in the authorized number of Cumulative Exchangeable Preferred Stock,
(iii) any authorization or issuance of a class or series of securities ranking
senior to the Cumulative Exchangeable Preferred Stock or (iv) in certain
circumstances, a merger or consolidation or sale, exchange or conveyance of
all or substantially all of the assets, property or business of the Company.
Mandatory Redemption. The Company will redeem all the outstanding shares of
Cumulative Exchangeable Preferred Stock out of funds legally available
therefor at $100 per share plus accrued and unpaid dividends and any accrued
interest thereon on October 15, 2003.
In the event of a Change of Control (as defined below), the Company shall
notify the holders of the Cumulative Exchangeable Preferred Stock in writing
of such event and offer to purchase all of the outstanding shares of the
Cumulative Exchangeable Preferred Stock at $100 per share plus accrued and
unpaid dividends and any accrued interest thereon. "Change of Control" is
defined as (i) other than in the ordinary course of business, the sale or
other disposition of all or substantially all of the assets of the Company to
any person other than EQ or any wholly-owned subsidiary thereof, (ii) the
merger, sale or consolidation of the Company with the effect that EQ ceases to
own directly or indirectly at least 51% of the total voting power of the
surviving corporation or (iii) EQ ceases to own directly or indirectly at
least 51% of the voting stock of The Equitable Life Assurance Society of the
United States. In addition, if prior to October 15, 2003, the Company shall
sell more than 20% of the shares of common stock of Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJSC"), the Company shall notify holders of
the Cumulative Exchangeable Preferred Stock in writing of such event and offer
to purchase all the outstanding shares of Cumulative Exchangeable Preferred
Stock at the Optional Redemption Price (as defined below).
Optional Redemption. The Cumulative Exchangeable Preferred Stock may be
redeemed in whole or in part at the option of the Company at any time at the
greater of (A) $100 plus accrued and unpaid
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dividends and any accrued interest thereon and (B) the present value of the
future mandatory redemption and dividend payments which would have been made
except for such optional redemption plus accrued and unpaid dividends and any
accrued interest thereon (the "Optional Redemption Price"). In addition, at
any time, at the option of the Company, up to 750,000 shares of the Cumulative
Exchangeable Preferred Stock may be redeemed with proceeds from any public
offering of Common Stock of the Company at the Optional Redemption Price
calculated using a higher discount rate.
Limitation on Payments. The Cumulative Exchangeable Preferred Stock also
contains certain restrictions on the ability of the Company to pay cash
dividends on, or redeem, repurchase or otherwise acquire or retire any shares
of its capital stock and on the ability of the Company to make payments under
certain long-term incentive compensation plans.
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DESCRIPTION OF DEBT SECURITIES
The Company's Debt Securities, may constitute either senior debt securities
("Senior Debt Securities") or subordinated debt securities ("Subordinated Debt
Securities") of the Company and will be issued in the case of Senior Debt
Securities under an indenture dated as of October 25, 1995 (the "Senior Debt
Indenture") between Donaldson, Lufkin & Jenrette, Inc., as issuer, and The
Bank of New York, as trustee and in the case of Subordinated Debt Securities
under an indenture dated as of , 1996 (the "Subordinated Debt Indenture")
between Donaldson, Lufkin & Jenrette, Inc., as issuer and The Bank of New
York, as trustee. The Senior Debt Indenture and the Subordinated Debt
Indenture are sometimes hereinafter referred to individually as an "Indenture"
and collectively as the "Indentures." The Bank of New York, in its capacity as
trustee under either or both of the Indentures is referred to herein as the
"Trustee."
Copies of the Indentures have been incorporated by reference or included
herein as exhibits to the Registration Statement of which this Prospectus is a
part and are also available for inspection at the office of the Trustee. The
Indentures are subject to and governed by the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). Section references contained herein are
to the applicable Indenture. The following summaries of certain provisions of
the Indentures do not purport to be complete, and where reference is made to
particular provisions of the Indentures, such provisions, including
definitions of certain terms, are incorporated by reference as a part of such
summaries or terms, which are qualified in their entirety by such reference.
The Indentures are substantially identical except for provisions relating to
subordination and the Company's negative pledge.
GENERAL
Neither of the Indentures limits the aggregate principal amount of Debt
Securities which may be issued thereunder and each Indenture provides that
Debt Securities may be issued thereunder from time to time in one or more
series. The Debt Securities will be direct, unsecured senior or subordinated
obligations of the Company. Except as described under "--Negative Pledge,"
neither Indenture limits other indebtedness or securities which may be
incurred or issued by the Company or any of its subsidiaries or contains
financial or similar restrictions on the Company or any of its subsidiaries.
The operations of the Company are conducted through its subsidiaries, and,
therefore, the Company is dependent upon the earnings and cash flow of its
subsidiaries to meet its obligations, including obligations under the Debt
Securities. The Debt Securities will be effectively subordinated to all
indebtedness of the Company's subsidiaries. As of March 31, 1996, the
aggregate amount of indebtedness of the Company's subsidiaries to which
holders of the Debt Securities would have been structurally subordinated was
approximately $1.4 billion, substantially all of which was incurred under
customary arrangements utilized by the securities brokerage industry. The
Company's rights and the rights of its creditors, including holders of Debt
Securities, to participate in the distribution of assets of any subsidiary
upon such subsidiary's liquidation or reorganization will be subject to prior
claims of such subsidiary's creditors, including trade creditors, except to
the extent the Company may itself be a creditor with recognized claims against
such subsidiary. In addition, net capital requirements under the Exchange Act
and New York Stock Exchange rules applicable to certain of the Company's
subsidiaries could limit the payment of dividends and the making of loans and
advances to the Company by such subsidiaries.
The applicable Prospectus Supplement which accompanies this Prospectus,
sets forth where applicable the following terms of, and information relating
to, the Debt Securities offered thereby: (i) the ranking of such Debt
Securities as senior or subordinated debt securities; (ii) the designation of
such Debt Securities; (iii) the aggregate principal amount of such Debt
Securities; (iv) the date or dates on which principal of and premium, if any,
on such Debt Securities is payable; (v) the rate or rates at which such Debt
Securities shall bear interest, if any, or the method by which such rate shall
be determined, and the basis on which interest shall be calculated if other
than a 360-day year consisting of twelve 30-day months, the date or dates from
which such interest will accrue and on which such interest will be payable and
the related record dates; (vi) if other than the offices of the Trustee, the
place where the principal of and any premium or interest on such Debt
Securities will be payable; (vii) any redemption, repayment or sinking fund
provisions; (viii) if other than denominations of $1,000 or multiples thereof,
the denominations in
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which such Debt Securities will be issuable; (ix) if other than the principal
amount thereof, the portion of the principal amount due upon acceleration; (x)
if other than U.S. dollars, the currency or currencies (including composite
currencies) in which such Debt Securities are denominated or payable; (xi)
whether such Debt Securities shall be issued in the form of a Global Security
or securities; (xii) any other specific terms of such Debt Securities; and
(xiii) the identity of any trustees, depositories, authenticating or paying
agents, transfer agents or registrars with respect to such Debt Securities.
(Section 2.3)
Unless otherwise specified in the accompanying Prospectus Supplement,
principal and premium, if any, will be payable, and the Debt Securities will
be transferable and exchangeable without any service charge, at the office of
the Trustee. However, the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection with any such
transfer or exchange. (Sections 2.7, 4.1 and 4.2)
Unless otherwise specified in the accompanying Prospectus Supplement,
interest on any series of Debt Securities will be payable on the interest
payment dates set forth in the accompanying Prospectus Supplement to the
persons in whose names the Debt Securities are registered at the close of
business on the related record date and will be paid, at the option of the
Company, by wire transfer or by checks mailed to such persons. (Sections 2.7,
4.1 and 4.2)
If the Debt Securities are issued as Original Issue Discount Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount, the Federal income tax consequences and other special
considerations applicable to such Original Issue Discount Securities will be
generally described in the Prospectus Supplement.
BOOK-ENTRY SYSTEM
If so specified in the accompanying Prospectus Supplement, Debt Securities
of any series may be issued under a book-entry system in the form of one or
more global Debt Securities (each a "Global Security"). Each Global Security
will be deposited with, or on behalf of a depositary, which, unless otherwise
specified in the accompanying Prospectus Supplement, will be The Depository
Trust Company, New York, New York (the "Depositary"). The Global Securities
will be registered in the name of the Depositary or its nominee.
The Depositary has advised the Company that the Depositary is a limited
purpose trust company organized under the laws of the State of New York, 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. The
Depositary was created to hold securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. The Depositary's participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations, some of whom (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with a participant, either directly or indirectly.
Upon the issuance of a Global Security in registered form, the Depositary
will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of participants. The accounts to be credited will be
designated by the underwriters, dealers or agents. Ownership of beneficial
interests in the Global Security will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial
interests by participants in the Global Security will be shown on, and the
transfer of that ownership interest will be effected only through, records
maintained by such participants. The laws of some jurisdictions may require
that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws may impair the ability to own,
transfer or pledge beneficial interest in a Global Security.
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So long as the Depositary or its nominee is the registered owner of a
Global Security, it will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as set forth below, owners of a beneficial
interest in such Global Security will not be entitled to have the Debt
Securities represented thereby registered in their names, will not receive or
be entitled to receive physical delivery of certificates representing the Debt
Securities represented thereby and will not be considered the owners or
holders thereof under the applicable Indenture. Accordingly, each person
owning a beneficial interest in such Global Security must rely on the
procedures of the Depositary and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a holder under the applicable Indenture. The Company
understands that under existing practice, in the event that the Company
requests any action of a holder or a beneficial owner desires to take any
action a holder is entitled to take, the Depositary would act upon the
instructions of, or authorize, the participant to take such action.
Payment of principal of, and interest on, the Debt Securities will be made
to the Depositary or its nominee, as the case may be, as the registered owner
and holder of the Global Security representing such Debt Securities. None of
the Company, the Trustee, any paying agent or registrar for the Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company has been advised by the Depositary that the Depositary will
credit participants' accounts with payments of principal or interest on the
payment date thereof in amounts proportionate to their respective beneficial
interests in the principal amount of the Global Security as shown on the
records of the Depositary. The Company expects that payments by participants
to owners of beneficial interests in the Global Security held through such
participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers registered in "street name," and will be the responsibility of such
participants.
A Global Security may not be transferred except as a whole by the
Depositary to a nominee or successor of the Depositary or by a nominee of the
Depositary to another nominee of the Depositary. A Global Security
representing all but not part of the Debt Securities being offered pursuant to
the applicable Prospectus Supplement is exchangeable for Debt Securities in
definitive form of like tenor and terms if (i) the Depositary notifies the
Company that it is unwilling or unable to continue as depositary for such
Global Security or if at any time the Depositary is no longer eligible to be,
or is not in good standing as, a clearing agency registered under the Exchange
Act, and in either case, a successor depositary is not appointed by the
Company within 90 days of receipt by the Company of such notice or of the
Company becoming aware of such ineligibility, or (ii) the Company in its sole
discretion at any time determines not to have all of the Debt Securities
represented by a Global Security and notifies the Trustee thereof. A Global
Security exchangeable pursuant to the preceding sentence shall be exchangeable
for Debt Securities registered in such names and in such authorized
denominations as the Depositary for such Global Security shall direct.
SENIOR DEBT
Payment of the principal of, premium, if any, and interest on Senior Debt
Securities issued under the Senior Debt Indenture will rank pari passu with
all other unsecured and unsubordinated debt of the Company.
SUBORDINATED DEBT
Payment of the principal of, premium, if any, and interest on Subordinated
Debt Securities issued under the Subordinated Debt Indenture will be
subordinate and junior in right of payment, to the extent and in the manner
set forth in the Subordinated Debt Indenture, to all Senior Indebtedness of
the Company. The Subordinated Debt Indenture does not contain any limitation
on the amount of Senior Indebtedness that can be incurred by the Company. As
of March 31, 1996, the Company had Senior Indebtedness outstanding of
approximately $1.1 billion. Indebtedness issued or to be issued pursuant to
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the Indenture dated as of , 1996 between the Company and The Bank of
New York, as Trustee, providing for the issuance of junior subordinated debt
securities of the Company is subordinate in right of payment to the Subordinated
Debt Securities. As of March 31, 1996, no junior subordinated debt securities
were outstanding.
The Subordinated Debt Indenture provides that no payment may be made by or
on behalf of the Company on account of any obligation or, to the extent the
subordination thereof is permitted by applicable law, claim in respect of the
Subordinated Debt Securities, including the principal of, premium, if any, or
interest on the Subordinated Debt Securities, or to redeem (or make a deposit
in redemption of), defease (other than payments made by the Trustee pursuant
to the provisions of the Indenture described under "--Discharge, Defeasance
and Covenant Defeasance" with respect to a defeasance permitted by the
Indenture, including the subordinated provisions thereof) or acquire any of
the Subordinated Debt Securities for cash, property or securities, (i) upon
the maturity of the Senior Indebtedness with an aggregate principal amount in
excess of $1.0 million by lapse of time, acceleration or otherwise, unless and
until all principal of, premium, if any, and interest on such Senior
Indebtedness and all other obligations in respect thereof are first paid in
full in cash or cash equivalents or such payment is duly provided for, or
unless and until any such maturity by acceleration has been rescinded or
waived or (ii) in the event of default in the payment of any principal of,
premium, if any, or interest on or any other amount payable in respect of the
Senior Indebtedness with an aggregate principal amount in excess of $1.0
million when it becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise, unless and until such
payment default has been cured or waived or has otherwise ceased to exist.
Upon the happening of a default (any event that, after notice or passage of
time would be an event of default) or an event of default (any event that
permits the holders of Senior Indebtedness or their representative or
representatives immediately to accelerate its maturity) with respect to any
Senior Indebtedness, other than a default in payment of the principal of,
premium, if any, or interest on such Senior Indebtedness, upon written notice
of such default or event of default given to the Company and the Trustee by
the holders of a majority of the principal amount outstanding of such Senior
Indebtedness or their representative or representatives or, if such default or
event of default results from the acceleration of the Subordinated Debt
Securities, immediately upon such acceleration, then, unless and until such
default or event of default has been cured or waived or otherwise has ceased
to exist, no payment may be made by or on behalf of the Company with respect
to any obligation or claim in respect of the Subordinated Debt Securities,
including the principal of, premium, if any, or interest on the Subordinated
Debt Securities or to redeem (or make a deposit in redemption of), defease or
acquire any of the Subordinated Debt Securities for cash, property or
securities. Notwithstanding the foregoing, unless the Senior Indebtedness in
respect of which such default or event of default exists has been declared due
and payable in its entirety within 180 days after the date written notice of
such default or event of default is delivered as set forth above or the date
of such acceleration as the case may be (the "Payment Blockage Period"), and
such declaration or acceleration has not been rescinded, the Company shall be
required then to pay all sums not paid to the Holders of the Subordinated Debt
Securities during the Payment Blockage Period due to the foregoing
prohibitions and to resume all other payments as and when due on the
Subordinated Debt Securities. Any number of such notices may be given;
provided however, that (i) during any 360 consecutive days, only one Payment
Blockage Period shall commence and (ii) any such default or event of default
that existed upon the commencement of a Payment Blockage Period may not be the
basis for the commencement of any other Payment Blockage Period, unless such
default or event of default shall have been cured or waived for a period of
not less than 90 consecutive days.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company from any source whether in cash,
property or securities, shall be received by the Trustee or the Holders on
account of any obligation or claim in respect of the Subordinated Debt
Securities at a time when such payment or distribution is prohibited by the
foregoing provisions, such payment or distribution shall be held in trust for
the benefit of the holders of Senior Indebtedness, and shall be paid or
delivered by the Trustee or such Holders, as the case may be, to the holders
of the Senior Indebtedness remaining unpaid or unprovided for or their
representative or representatives, or to the trustee or trustees under any
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indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness held or represented by
each, for application to the payment of all Senior Indebtedness remaining
unpaid, to the extent necessary to pay or to provide for the payment in full
in cash or cash equivalents of all such Senior Indebtedness, after giving
effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness.
Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization or readjustment of
the Company, whether voluntary or involuntary, in bankruptcy, insolvency,
receivership or a similar proceeding or upon assignment for the benefit of
creditors, or any other marshaling of the assets and liabilities of the
Company or otherwise, (i) the holders of all Senior Indebtedness would first
be entitled to receive payment in full in cash or cash equivalents (or have
such payment duly provided for) of the principal, premium, if any, and
interest payable in respect therefor before the Holder would be entitled to
receive any payment on account of the principal of , premium, if any, and
interest on the Subordinated Debt Securities, and (ii) any payment or
distribution of assets of the Company of any kind or character, from any
source, whether in cash, property or securities to which the Holders or the
Trustee on behalf of the Holders would be entitled, except for the
subordination provisions contained in the Indenture, would be paid by the
liquidating trustee or agent or other person making such a payment or
distribution directly to the holders of Senior Indebtedness remaining unpaid
or unprovided for or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness may have been issued, ratably
according to the aggregate amounts remaining unpaid on account of the Senior
Indebtedness held or represented by each, for application to the payment of
all Senior Indebtedness remaining unpaid, to the extent necessary to pay or
provide for the payment in full in cash or cash equivalents of all such Senior
Indebtedness, after giving effect to any concurrent payment or distribution to
the holders of such Senior Indebtedness.
The holders of the Senior Indebtedness and their respective representatives
are authorized to demand specific performance of the provisions with respect
to subordination in the Indenture at any time when the Company or any Holder
shall have failed to comply with any provision with respect to subordination
in the Indenture applicable to it, and the Company and each Holder irrevocably
waives any defense based on the adequacy of a remedy at law that might be
asserted as a bar to the remedy of specific performance of such subordination
provision in any action brought therefor by the holders of the Senior
Indebtedness and their respective representatives.
By reasons of such subordination, in the event of the liquidation or
insolvency of the Company, creditors of the Company who are not holders of
Senior Indebtedness, including Holders of the Subordinated Debt Securities,
may recover less, ratably, than holders of Senior Indebtedness.
No provision contained in the Indenture or the Subordinated Debt Securities
will affect the obligation of the Company, which is absolute and
unconditional, to pay, when due, principal of, premium, if any, and interest
on the Subordinated Debt Securities. The subordination provisions of the
Indenture and the Subordinated Debt Securities will not prevent the occurrence
of any Event of Default under the Indenture or limit the rights of the Trustee
or any Holder, except as provided in the seven preceding paragraphs, to pursue
any other rights or remedies with respect to the Subordinated Debt Securities.
NEGATIVE PLEDGE
The Senior Debt Indenture provides that the Company and any successor
corporation will not, and will not permit any Subsidiary to, create, assume,
incur or guarantee any indebtedness for borrowed money secured by a pledge,
lien or other encumbrance except for Permitted Liens (as defined in the Senior
Debt Indenture) on the Voting Stock of DLJSC or any other Subsidiary of the
Company which shall hereafter succeed by merger or otherwise to all or
substantially all of the business of DLJSC (a "DLJSC Successor"), without
making effective provision whereby the Senior Debt Securities will be secured
equally and ratably with such secured indebtedness. (Senior Debt Indenture,
Section 4.3)
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CERTAIN DEFINITIONS
The term "Holder" or "Securityholder" as defined in the applicable
Indenture means the registered holder of any Debt Security with respect to
registered Debt Securities and the bearer of any unregistered Debt Security or
any coupon appertaining thereto, as the case may be.
"Original Issue Discount Security" as defined in the applicable Indenture
means any Debt Security that provides for an amount less than the principal
amount thereof to be due and payable upon declaration of acceleration of the
maturity thereof pursuant to Section 6.2 of the applicable Indenture.
The term "Senior Indebtedness" as defined in the Subordinated Debt
Indenture means the principal of and premium, if any, and interest on (a) all
indebtedness of the Company, whether outstanding on the date of the
Subordinated Debt Indenture or thereafter created, (i) for money borrowed by
the Company, (ii) for money borrowed by, or obligations of, others and either
assumed or guaranteed, directly or indirectly, by the Company, (iii) in
respect of letters of credit and acceptances issued or made by banks, or (iv)
constituting purchase money indebtedness, or indebtedness secured by property
included in the property, plant and equipment accounts of the Company at the
time of the acquisition of such property by the Company, for the payment of
which the Company is directly liable, and (b) all deferrals, renewals,
extensions and refundings of, and amendments, modifications and supplements
to, any such indebtedness. As used in the preceding sentence, the term
"purchase money indebtedness" means indebtedness evidenced by a note,
debenture, bond or other instrument (whether or not secured by any lien or
other security interest) issued or assumed as all or a part of the
consideration for the acquisition of property, whether by purchase, merger,
consolidation or otherwise, unless by its terms such indebtedness is
subordinated to other indebtedness of the Company. Notwithstanding anything to
the contrary in the Subordinated Debt Indenture or the Subordinated Debt
Securities, Senior Indebtedness shall not include, (i) any indebtedness of the
Company which, by its terms or the terms of the instrument creating or
evidencing it, is subordinate in right of payment to or pari passu with the
Subordinated Debt Securities or (ii) any indebtedness of the Company to a
subsidiary of the Company. (Subordinated Debt Indenture, Section 1.1)
The term "Subsidiary" as defined in the applicable Indenture means with
respect to any Person, any corporation, association or other business entity
of which more than 50% of the outstanding Voting Stock (as defined in the
applicable Indenture) is owned directly or indirectly, by such Person and one
or more other Subsidiaries of such Person.
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
Under each Indenture, the Company shall not consolidate with, merge with or
into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially
as an entirety in one transaction or a series of related transactions) to, any
Person (other than a consolidation with or merger with or into a Subsidiary or
a sale, conveyance, transfer, lease or other disposition to a Subsidiary) or
permit any Person to merge with or into the Company unless: (a) either (i) the
Company shall be the continuing Person or (ii) the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or
that acquired or leased such property and assets of the Company shall be a
corporation organized and validly existing under the laws of the United States
of America or any jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of the
obligations of the Company on all of the Debt Securities and under the
applicable Indenture and the Company shall have delivered to the Trustee an
opinion of counsel stating that such consolidation, merger or transfer and
such supplemental indenture complies with this provision and that all
conditions precedent provided for in the applicable Indenture relating to such
transaction have been complied with and that such supplemental indenture
constitutes the legal, valid and binding obligation of the Company or such
successor enforceable against such entity in accordance with the terms,
subject to customary exceptions; and (b) the Company shall have delivered to
the Trustee an officers' certificate to the effect that immediately after
giving effect to such transaction, no Default (as defined in the applicable
Indenture) shall have occurred and be continuing and an opinion of counsel as
to the matters set forth in paragraph (a) above.
(Section 5.1)
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EVENTS OF DEFAULT
Events of Default defined in the applicable Indenture with respect to the
Debt Securities of any series are: (a) the Company defaults in the payment of
all or any part of the principal of any Debt Security of such series when the
same becomes due and payable at maturity, upon acceleration, redemption or
mandatory repurchase, including as a sinking fund installment, or otherwise;
(b) the Company defaults in the payment of any interest on any Debt Security
of such series when the same becomes due and payable, and such default
continues for a period of 30 days; (c) the Company defaults in the performance
of or breaches any other covenant or agreement of the Company in the
applicable Indenture with respect to any Debt Security of such series or in
the Debt Securities of such series and such default or breach continues for a
period of 60 consecutive days after written notice thereof has been given to
the Company by the Trustee or to the Company and the Trustee by the Holders of
25% or more in aggregate principal amount of the Debt Securities of all series
under the applicable Indenture affected thereby; (d) an involuntary case or
other proceeding shall be commenced against the Company or DLJSC (including
for purposes of paragraph (d) and (e) hereof any DLJSC Successor) with respect
to the Company or DLJSC or their respective debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of the Company or DLJSC or for any substantial part of the property
and assets of the Company or DLJSC, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days; or
an order for relief shall be entered against the Company or DLJSC under any
bankruptcy, insolvency or other similar law now or hereafter in effect; (e)
the Company or DLJSC (i) commences a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consents to the entry of an order for relief in an involuntary case under any
such law, (ii) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or DLJSC or for all or substantially all of the
property and assets of the Company or DLJSC or (iii) effects any general
assignment for the benefit of creditors; (f) an event of default, as defined
in any one or more indentures or instruments evidencing or under which the
Company has at the date of the applicable Indenture or shall thereafter have
outstanding an aggregate of at least $25,000,000 aggregate principal amount of
indebtedness for borrowed money, shall happen and be continuing and such
indebtedness shall have been accelerated so that the same shall be or become
due and payable prior to the date on which the same would otherwise have
become due and payable, and such acceleration shall not be rescinded or
annulled within ten days after notice thereof shall have been given to the
Company by the Trustee (if such event be known to it), or to the Company and
the Trustee by the holders of at least 25% in aggregate principal amount of
the Debt Securities at the time outstanding under the applicable Indenture;
provided that if such event of default under such indentures or instruments
shall be remedied or cured by the Company or waived by the holders of such
indebtedness, then the Event of Default under the applicable Indenture by
reason thereof shall be deemed likewise to have been thereupon remedied, cured
or waived without further action upon the part of either the Trustee or any of
the Securityholders; (g) failure by the Company to make any payment at
maturity, including any applicable grace period, in respect of at least
$25,000,000 aggregate principal amount of indebtedness for borrowed money and
such failure shall have continued for a period of ten days after notice
thereof shall have been given to the Company by the Trustee (if such event be
known to it), or to the Company and the Trustee by the holders of at least 25%
in aggregate principal amount of the Debt Securities at the time outstanding
under the applicable Indenture; provided that if such failure shall be
remedied or cured by the Company or waived by the holders of such
indebtedness, then the Event of Default under the applicable Indenture by
reason thereof shall be deemed likewise to have been thereupon remedied, cured
or waived without further action upon the part of either the Trustee or any of
the Securityholders; or (h) any other Event of Default established with
respect to any series of Debt Securities issued pursuant to the applicable
Indenture occurs. (Section 6.1)
Each Indenture provides that if an Event of Default described in clauses
(a) or (b) of the immediately preceding paragraph with respect to the Debt
Securities of any series then outstanding thereunder occurs and is continuing,
then, and in each and every such case, except for any series of Debt
Securities the principal of which shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Debt Securities of any such affected series then
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outstanding under the applicable Indenture (each such series treated as a
separate class) by notice in writing to the Company (and to the Trustee if
given by Securityholders), may declare the entire principal amount (or, if the
Debt Securities of any such series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of such
series established pursuant to the applicable Indenture) of all Debt
Securities of such affected series, and the interest accrued thereon, if any,
to be due and payable immediately, and upon any such declaration the same
shall become immediately due and payable. If an Event of Default described in
clauses (c) or (h) of the immediately preceding paragraph with respect to the
Debt Securities of one or more series then outstanding under the applicable
Indenture occurs and is continuing, then, in each and every such case, except
for any series of Debt Securities the principal of which shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount (or, if the Debt Securities of any such series
are Original Issue Discount Securities, such portion of the principal as may
be specified in the terms thereof established pursuant to the applicable
Indenture) of the Debt Securities of all such affected series then outstanding
under the applicable Indenture (treated as a single class) by notice in
writing to the Company (and to the Trustee if given by Securityholders), may
declare the entire principal amount (or, if the Debt Securities of any such
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series established pursuant to
the applicable Indenture) of all Debt Securities of all such affected series,
and the interest accrued thereon, if any, to be due and payable immediately,
and upon any such declaration the same shall become immediately due and
payable. If an Event of Default described in clauses (d) or (e) of the
immediately preceding paragraph occurs and is continuing, then the principal
amount (or, if any Debt Securities are Original Issue Discount Securities,
such portion of the principal as may be specified in the terms thereof
established pursuant to the applicable Indenture) of all the Debt Securities
then outstanding under the applicable Indenture and interest accrued thereon,
if any, shall be and become immediately due and payable, without any notice or
other action by any Holder or the Trustee to the full extent permitted by
applicable law. If an Event of Default described in clauses (f) or (g) of the
immediately preceding paragraph, or in clauses (c) or (h) of the immediately
preceding paragraph with respect to the Debt Securities of all series then
outstanding under the applicable Indenture, occurs and is continuing, then, in
each and every such case, either the Trustee or the Holders of not less than
25% in aggregate principal amount (or, if the Debt Securities of any
outstanding series are Original Issue Discount Securities, such portion of the
principal as may be specified in the terms thereof established pursuant to the
applicable Indenture) of all Debt Securities of any series then outstanding
under the applicable Indenture except for any series of Debt Securities the
principal of which shall have already become due and payable (treated as a
single class) by notice in writing to the Company (and to the Trustee if given
by Securityholders), may declare the entire principal amount (or, if the Debt
Securities of any such series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such
series established pursuant to the applicable Indenture) of all Debt
Securities of any series then outstanding under the applicable Indenture, and
the interest accrued thereon, if any, to be due and payable immediately, and
upon any such declaration the same shall become immediately due and payable.
Upon certain conditions such declarations may be rescinded and annulled and
past defaults may be waived by the Holders of a majority in principal of the
then outstanding Debt Securities of all such series that have been accelerated
under the applicable Indenture (voting as a single class). (Section 6.2)
Because the ability of Holders to declare the Debt Securities of any series
due and payable upon an Event of Default under clauses (c), (f), (g) or (h) of
the immediately preceding paragraph depends on the requisite action by Holders
of all affected series of Debt Securities under the applicable Indenture, if
there is more than one series of Debt Securities outstanding, Holders of a
particular series of Debt Securities may be unable to declare the Debt
Securities under the applicable Indenture due and payable upon an Event of
Default described in clauses (c), (f), (g) or (h) of the immediately preceding
paragraph without action by Holders of such other series. In October 1995, the
Company issued $500,000,000 in aggregate principal amount of 6 7/8 % Senior
Notes due 2005 under the Senior Debt Indenture and in February 1996 issued
$250,000,000 in aggregate principal amount of 5 5/8 % Medium-Term-Notes due
2016 under the Senior Debt Indenture, all of which were outstanding as of the
date hereof.
Each Indenture contains a provision under which, subject to the duty of the
Trustee during a default to act with the required standard of care, (i) the
Trustee may rely and shall be protected in acting or
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refraining from acting upon any officers' certificate, opinion of counsel (or
both), resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper person or persons
and the Trustee need not investigate any fact or matter stated in the
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit; (ii) before the
Trustee acts or refrains from acting, it may require an officers' certificate
and/or an opinion of counsel, which shall conform to the requirements of the
applicable Indenture and the Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificate or
opinion; subject to the terms of the applicable Indenture, whenever in the
administration of the trusts of the applicable Indenture the Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking or suffering or omitting to take any action under the applicable
Indenture, such matter (unless other evidence in respect thereof be
specifically prescribed in the applicable Indenture) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an officers' certificate delivered to
the Trustee, and such certificate, in the absence of negligence or bad faith
on the part of the Trustee, shall be full warrant to the Trustee for any
action taken, suffered or omitted to be taken by it under the provisions of
the applicable Indenture upon the faith thereof; (iii) the Trustee may act
through its attorneys and agents not regularly in its employ and shall not be
responsible for the misconduct or negligence of any agent or attorney
appointed with due care; (iv) any request, direction, order or demand of the
Company mentioned in the applicable Indenture shall be sufficiently evidenced
by an officers' certificate (unless other evidence in respect thereof be
specifically prescribed in the applicable Indenture); and any Board Resolution
may be evidenced to the Trustee by a copy thereof certified by the secretary
or an assistant secretary of the Company; (v) the Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by the
applicable Indenture at the request, order or direction of any of the Holders,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred
by it in compliance with such request, order or direction; (vi) the Trustee
shall not be liable for any action it takes or omits to take in good faith
that it believes to be authorized or within its rights or powers or for any
action it takes or omits to take in accordance with the direction of the
Holders in accordance with the applicable Indenture relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
the applicable Indenture; (vii) the Trustee may consult with counsel of its
selection and the advice of such counsel or any opinion of counsel shall be
full and complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it under the applicable Indenture in good
faith and in reliance thereon; and (viii) prior to the occurrence of an Event
of Default under the applicable Indenture and after the curing or waiving of
all Events of Default, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
officers' certificate, opinion of counsel, Board Resolution, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper or document
unless requested in writing so to do by the Holders of not less than a
majority in aggregate principal amount of the Debt Securities of all series
affected then outstanding under the applicable Indenture; provided that, if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of the applicable Indenture, the
Trustee may require reasonable indemnity against such expenses or liabilities
as a condition to proceeding. (Section 7.2)
Subject to such provisions in the applicable Indenture for the
indemnification of the Trustee and certain other limitations, the Holders of
at least a majority in aggregate principal amount (or, if any Debt Securities
are Original Issue Discount Securities, such portion of the principal as may
be specified in the terms thereof established pursuant to the applicable
Indenture) of the outstanding Debt Securities under the applicable Indenture
of all series affected (voting as a single class) may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee with respect to the
Debt Securities of such series by the applicable Indenture; provided, that the
Trustee may refuse to follow any direction that conflicts with law or the
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applicable Indenture, that may involve the Trustee in personal liability, or
that the Trustee determines in good faith may be unduly prejudicial to the
rights of Holders not joining in the giving of such direction; and provided
further, that the Trustee may take any other action it deems proper that is
not inconsistent with any directions received from Holders of Debt Securities
pursuant to this paragraph. (Section 6.5)
Subject to various provisions in the applicable Indenture, the Holders of
at least a majority in principal amount (or, if the Debt Securities are
Original Issue Discount Securities, such portion of the principal as may be
specified in the terms thereof established pursuant to the applicable
Indenture) of the outstanding Debt Securities under the applicable Indenture
of all series affected (voting as a single class), by notice to the Trustee,
may waive an existing Default or Event of Default with respect to the Debt
Securities of such series and its consequences, except a Default in the
payment of principal of or interest on any Debt Security as specified in
clauses (a) or (b) of Section 6.1 of the applicable Indenture or in respect of
a covenant or provision of the applicable Indenture which cannot be modified
or amended without the consent of the Holder of each outstanding Debt Security
affected. Upon any such waiver, such Default shall cease to exist, and any
Event of Default with respect to the Debt Securities of such series arising
therefrom shall be deemed to have been cured, for every purpose of the
applicable Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
(Section 6.4)
Each Indenture provides that no Holder of any Debt Securities of any series
may institute any proceeding, judicial or otherwise, with respect to the
applicable Indenture or the Debt Securities of such series, or for the
appointment of a receiver or trustee, or for any other remedy under the
applicable Indenture, unless: (i) such Holder has previously given to the
Trustee written notice of a continuing Event of Default with respect to the
Debt Securities of such series; (ii) the Holders of at least 25% in aggregate
principal amount of outstanding Debt Securities of all such series affected
under the applicable Indenture shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own name
as Trustee under the applicable Indenture; (iii) such Holder or Holders have
offered to the Trustee indemnity reasonably satisfactory to the Trustee
against any costs, liabilities or expenses to be incurred in compliance with
such request; (iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and (v) during such 60-day period, the Holders of a majority in aggregate
principal amount of the outstanding Debt Securities of all such affected
series under the applicable Indenture have not given the Trustee a direction
that is inconsistent with such written request. A Holder may not use the
applicable Indenture to prejudice the rights of another Holder or to obtain a
preference or priority over such other Holder. (Section 6.6)
Each Indenture contains a covenant that the Company will file with the
Trustee, within 15 days after the Company is required to file the same with
the Commission, copies of the annual reports and of the information, documents
and other reports which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act.
(Section 4.5)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Each Indenture provides with respect to each series of Debt Securities that
the Company may terminate its obligations under the Debt Securities of any
series and the applicable Indenture with respect to Debt Securities of such
series if: (i) all Debt Securities of such series previously authenticated and
delivered, with certain exceptions, have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it under the
applicable Indenture; or (ii) (a) the Debt Securities of such series mature
within one year or all of them are to be called for redemption within one year
under arrangements satisfactory to the Trustee for giving the notice of
redemption, (b) the Company irrevocably deposits in trust with the Trustee, as
trust funds solely for the benefit of the Holders of such Debt Securities for
that purpose, money or U.S. Government Obligations or a combination thereof
sufficient (unless such funds consist solely of money, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee), without consideration
of any reinvestment, to pay the principal of and interest on the Debt
Securities of such series to maturity or redemption, as the case may be, and
to pay all other sums payable by it under the applicable Indenture, and (c)
the Company delivers to the Trustee an officers' certificate and an opinion of
counsel, in each case
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stating that all conditions precedent provided for in the applicable Indenture
relating to the satisfaction and discharge of the applicable Indenture with
respect to the Debt Securities of such series have been complied with. With
respect to the foregoing clause (i), only the Company's obligations to
compensate and indemnify the Trustee under the applicable Indenture shall
survive. With respect to the foregoing clause (ii), only the Company's
obligations to execute and deliver Debt Securities of such series for
authentication, to set the terms of the Debt Securities of such series, to
maintain an office or agency in respect of the Debt Securities of such series,
to have moneys held for payment in trust, to register the transfer or exchange
of Debt Securities of such series, to deliver Debt Securities of such series
for replacement or to be canceled, to compensate and indemnify the Trustee and
to appoint a successor trustee, and its right to recover excess money held by
the Trustee shall survive until such Debt Securities are no longer
outstanding. Thereafter, only the Company's obligations to compensate and
indemnify the Trustee, and its right to recover excess money held by the
Trustee shall survive. (Section 8.1)
Each Indenture provides that the Company (i) will be deemed to have paid
and will be discharged from any and all obligations in respect of the Debt
Securities of any series under the applicable Indenture, and the provisions of
the applicable Indenture will, except as noted below, no longer be in effect
with respect to the Debt Securities of such series ("legal defeasance") and
(ii) may, in the case of the Senior Debt Indenture, omit to comply with any
term, provision or condition of the applicable Indenture described above under
"--Negative Pledge" (or in the case of each Indenture omit to comply with any
other specific covenant relating to such series provided for in a Board
Resolution or supplemental indenture which may by its terms be defeased
pursuant to such Indenture), and such omission shall be deemed not to be an
Event of Default under clauses (c) or (h) of the first paragraph of "--Events
of Default" with respect to the outstanding Debt Securities of a series under
the applicable Indenture ("covenant defeasance"); provided that the following
conditions shall have been satisfied: (a) the Company has irrevocably
deposited in trust with the Trustee as trust funds solely for the benefit of
the Holders of the Debt Securities of such series, for payment of the
principal of and interest on the Debt Securities of such series, money or U.S.
Government Obligations or a combination thereof sufficient (unless such funds
consist solely of money, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee) without consideration of any reinvestment and after
payment of all federal, state and local taxes or other charges and assessments
in respect thereof payable by the Trustee, to pay and discharge the principal
of and accrued interest on the outstanding Debt Securities of such series to
maturity or earlier redemption (irrevocably provided for under arrangements
satisfactory to the Trustee), as the case may be; (b) such deposit will not
result in a breach or violation of, or constitute a default under, the
applicable Indenture or any other material agreement or instrument to which
the Company is a party or by which it is bound; (c) no Default with respect to
such Debt Securities of such series shall have occurred and be continuing on
the date of such deposit; (d) the Company shall have delivered to the Trustee
an opinion of counsel that (1) the Holders of the Debt Securities of such
series will not recognize income, gain or loss for Federal income tax purposes
as a result of the Company's exercise of its option under this provision of
the applicable Indenture and will be subject to Federal income tax on the same
amount and in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred and (2) the Holders of
the Debt Securities of such series have a valid security interest in the trust
funds subject to no prior liens under the Uniform Commercial Code, and (e) the
Company has delivered to the Trustee an officers' certificate and an opinion
of counsel, in each case stating that all conditions precedent provided for
the applicable Indenture relating to the defeasance contemplated have been
complied with. In the case of legal defeasance under clause (i) above, the
opinion of counsel referred to in clause (d)(1) above may be replaced by a
ruling directed to the Trustee received from the Internal Revenue Service to
the same effect. Subsequent to legal defeasance under clause (i) above, the
Company's obligations to execute and deliver Debt Securities of such series
for authentication, to set the terms of the Debt Securities of such series, to
maintain an office or agency in respect of the Debt Securities of such series,
to have moneys held for payment in trust, to register the transfer or exchange
of Debt Securities of such series, to deliver Debt Securities of such series
for replacement or to be canceled, to compensate and indemnify the Trustee and
to appoint a successor trustee, and its right to recover excess money held by
the Trustee shall survive until such Debt Securities are no longer
19
<PAGE>
outstanding. After such Debt Securities are no longer outstanding, in the case
of legal defeasance under clause (i) above, only the Company's obligations to
compensate and indemnify the Trustee and its right to recover excess money
held by the Trustee shall survive. (Sections 8.2 and 8.3)
MODIFICATION OF THE INDENTURES
Each Indenture provides that the Company and the Trustee may amend or
supplement the applicable Indenture or the Debt Securities of any series
without notice to or the consent of any Holder: (1) to cure any ambiguity,
defect or inconsistency in the applicable Indenture; provided that such
amendments or supplements shall not materially and adversely affect the
interests of the Holders; (2) to comply with Article 5 of the applicable
Indenture in connection with a consolidation or merger of the Company or the
sale, conveyance, transfer, lease or other disposal of all or substantially
all of the property and assets of the Company; (3) to comply with any
requirements of the Commission in connection with the qualification of the
applicable Indenture under the Trust Indenture Act; (4) to evidence and
provide for the acceptance of appointment under the applicable Indenture with
respect to the Debt Securities of any or all series by a successor Trustee;
(5) to establish the form or forms or terms of Debt Securities of any series
or of the coupons pertaining to such Debt Securities as permitted under the
applicable Indenture; (6) to provide for uncertificated or unregistered Debt
Securities and to make all appropriate changes for such purpose; or (7) to
make any change that does not materially and adversely affect the rights of
any Holder. (Section 9.1)
Each Indenture also contains provisions whereby the Company and the
Trustee, subject to certain conditions, without prior notice to any Holders,
may amend the applicable Indenture and the outstanding Debt Securities of any
series with the written consent of the Holders of a majority in principal
amount of the Debt Securities then outstanding under the applicable Indenture
of all series affected by such amendment (all such series voting as one
class), and the Holders of a majority in principal amount of the outstanding
Debt Securities under the applicable Indenture of all series affected thereby
(all such series voting as one class) by written notice to the Trustee may
waive future compliance by the Company with any provision of the applicable
Indenture or the Debt Securities of such series. Notwithstanding the foregoing
provisions, without the consent of each Holder affected thereby, an amendment
or waiver, including a waiver pursuant to Section 6.4 of the applicable
Indenture, may not: (i) extend the stated maturity of the principal of, or any
sinking fund obligation or any installment of interest on, such Holder's Debt
Security, or reduce the principal thereof or the rate of interest thereon
(including any amount in respect of original issue discount), or any premium
payable with respect thereto, or adversely affect the rights of such Holder
under any mandatory redemption or repurchase provision or any right of
redemption or repurchase at the option of such Holder, or reduce the amount of
the principal of an Original Issue Discount Security that would be due and
payable upon an acceleration of the maturity thereof or the amount thereof
provable in bankruptcy, or change any place of payment where, or the currency
in which, any Debt Security or any premium or the interest thereon is payable,
or impair the right to institute suit for the enforcement of any such payment
on or after the due date therefor; (ii) reduce the percentage in principal
amount of outstanding Debt Securities of the relevant series the consent of
whose Holders is required for any such supplemental indenture, for any waiver
of compliance with certain provisions of the applicable Indenture or certain
Defaults and their consequences provided for in the applicable Indenture;
(iii) waive a Default in the payment of principal of or interest on any Debt
Security of such Holder; or (iv) modify any of the provisions of this
provision of the applicable Indenture, except to increase any such percentage
or to provide that certain other provisions of the applicable Indenture cannot
be modified or waived without the consent of the Holder of each outstanding
Debt Security thereunder affected thereby. A supplemental indenture which
changes or eliminates any covenant or other provision of the applicable
Indenture which has expressly been included solely for the benefit of one or
more particular series of Debt Securities, or which modifies the rights of
Holders of Debt Securities of such series with respect to such covenant or
provision, shall be deemed not to affect the rights under the applicable
Indenture of the Holders of Debt Securities of any other series or of the
coupons appertaining to such Debt Securities. It shall not be necessary for
the consent of any Holder under this provision of the applicable Indenture to
approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an
20
<PAGE>
amendment, supplement or waiver under this section of the applicable Indenture
becomes effective, the Company shall give to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. The Company
will mail supplemental indentures to Holders upon request. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or
waiver. (Section 9.2)
GOVERNING LAW
The Indentures and the Debt Securities will be governed by the laws of the
State of New York. (Section 10.8 and Section 11.8)
CONCERNING THE TRUSTEE
The Company and its subsidiaries maintain ordinary banking and trust
relationships with The Bank of New York and its affiliates.
21
<PAGE>
PLAN OF DISTRIBUTION
Offered Securities may be sold (i) through agents, (ii) through
underwriters, (iii) through dealers or (iv) directly to purchasers.
Offers to purchase Offered Securities may be solicited by agents designated
by the Company from time to time. Any such agent involved in the offer or sale
of the Offered Securities will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment. Any such
agent may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Offered Securities so offered and sold.
If an underwriter or underwriters are utilized in the sale of Offered
Securities, the Company will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached,
and the names of the specific managing underwriter or underwriters, as well as
any other underwriters, and the terms of the transactions, including
compensation of the underwriters and dealers, if any, will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales
of Offered Securities.
If a dealer is utilized in the sale of Offered Securities, the Company will
sell such Offered Securities to the dealer, as principal. The dealer may then
resell such Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale. The name of the dealer and
the terms of the transactions will be set forth in the Prospectus Supplement
relating thereto.
Offers to purchase Offered Securities may be solicited directly by the
Company and sales thereof may be made by the Company directly to institutional
investors or others. The terms of any such sales will be described in the
Prospectus Supplement relating thereto.
Agents, underwriters and dealers may be entitled under agreements which may
be entered into with the Company, to indemnification by the Company against
certain liabilities, including liabilities under the 1933 Act, and any such
agents, underwriters or dealers, or their affiliates may be customers of,
engage in transactions with or perform services for the Company, in the
ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutions to purchase
Offered Securities from the Company at the public offering price set forth in
the Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on the date stated in the Prospectus
Supplement. Such Contracts will be subject to only those conditions set forth
in the Prospectus Supplement. A commission indicated in the Prospectus
Supplement will be paid to underwriters and agents soliciting purchases of
Offered Securities pursuant to any such Contracts accepted by the Company.
This Prospectus, together with the Prospectus Supplement, may also be used
by DLJSC in connection with offers and sales of Offered Securities related to
market-making transactions by and through DLJSC, at negotiated prices related
to prevailing market prices at the time of sale or otherwise. DLJSC may act as
principal or agent in such transactions.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Securities and certain other legal matters in connection with
the offering of the Securities will be passed upon by Michael A. Boyd, Senior
Vice President and General Counsel to the Company, and Davis Polk & Wardwell.
Mr. Boyd owns 22,466 restricted stock units of the Company and holds options
to purchase 39,772 shares of Common Stock. Davis Polk & Wardwell from time to
time provides legal services to the Company and its subsidiaries.
22
<PAGE>
EXPERTS
The consolidated financial statements and financial statement schedule of
the Company as of December 31, 1995 and 1994 and for each of the years in the
three-year period ended December 31, 1995 have been incorporated by reference
herein and in the Registration Statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated
herein by reference, and upon the authority of said firm as experts in
accounting and auditing.
23
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, IN CONNECTION WITH ANY OFFERING
CONTEMPLATED HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY
UNDERWRITER, AGENT OR DEALER. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF. NEITHER THIS
PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES 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 ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Available Information ...................... 2
Incorporation of Certain Information by
Reference ................................. 2
Use of Proceeds ............................ 3
Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and
Preferred Stock Dividends ................. 3
The Company ................................ 4
Description of Capital Stock ............... 6
Description of Debt Securities ............. 9
Plan of Distribution ....................... 22
Legal Matters .............................. 22
Experts .................................... 23
</TABLE>
$500,000,000
DONALDSON, LUFKIN &
JENRETTE, INC.
DEBT SECURITIES
PREFERRED STOCK
PROSPECTUS
, 1996
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY 3, 1996
PROSPECTUS
, 1996
DONALDSON, LUFKIN & JENRETTE, INC.
JUNIOR SUBORDINATED DEBT SECURITIES
DLJ CAPITAL TRUST I
DLJ CAPITAL TRUST II
DLJ CAPITAL TRUST III
DLJ CAPITAL TRUST IV
PREFERRED SECURITIES GUARANTEED TO THE EXTENT SET FORTH
HEREIN BY DONALDSON, LUFKIN & JENRETTE, INC.
Donaldson Lufkin & Jenrette, Inc. (the "Company") may from time to time
offer unsecured junior subordinated debt securities (the "Junior Subordinated
Debt Securities") consisting of debentures, notes or other evidences of
indebtedness in one or more series and in amounts, at prices and on terms to
be determined at or prior to the time of any such offering. The Junior
Subordinated Debt Securities when issued will be unsecured obligations of the
Company. The Company's obligations under the Junior Subordinated Debt
Securities will be subordinate and junior in right of payment to all Senior
Indebtedness (as defined herein) of the Company.
DLJ Capital Trust I, DLJ Capital Trust II, DLJ Capital Trust III and DLJ
Capital Trust IV (the "DLJ Trusts"), each a statutory business trust formed
under the laws of the State of Delaware, may offer and sell, from time to
time, preferred securities representing undivided beneficial interests in the
assets of the respective DLJ Trust ("Preferred Securities"). The payment of
periodic cash distributions ("distributions") with respect to Preferred
Securities of each of the DLJ Trusts out of moneys held by the Property
Trustee (as defined herein) of each of the DLJ Trusts, and payments on
liquidation of each DLJ Trust and on redemption of Preferred Securities of
such DLJ Trust, will be guaranteed by the Company as and to the extent
described herein (each such guarantee a "Preferred Securities Guarantee"). See
"Description of the Preferred Securities Guarantees." The Company's obligation
under each Preferred Securities Guarantee is an unsecured obligation of the
Company and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Company, including the Junior Subordinated Debt
Securities, except those made pari passu or subordinate by their terms, and
(ii) senior to all capital stock now or hereafter issued by the Company and to
any guarantee now or hereafter entered into by the Company in respect of any
of its capital stock. Junior Subordinated Debt Securities may be issued and
sold from time to time in one or more series by the Company to a DLJ Trust, or
a trustee of such trust, in connection with the investment of the proceeds
from the offering of Preferred Securities and Common Securities (as defined
herein) of such DLJ Trust. The Junior Subordinated Debt Securities purchased
by a DLJ Trust may be subsequently distributed pro rata to holders of
Preferred Securities and Common Securities in connection with the dissolution
of such DLJ Trust, upon the occurrence of certain events as may be described
in an accompanying Prospectus Supplement.
Specific terms of the Junior Subordinated Debt Securities or any series or
the Preferred Securities of any DLJ Trust in respect of which this Prospectus
is being delivered (the "Offered Securities") will be set forth in a
Prospectus Supplement with respect to such Offered Securities, which will
describe, without limitation and where applicable, the following: (i) in the
case of Junior Subordinated Debt Securities, the specific designation,
aggregate principal amount, authorized denomination, maturity, premium, if
any, redemption or sinking fund provisions, if any, interest rate (which may
be fixed or variable), if any, the time and method of calculating interest
payments, if any, dates on which premium, if any, and interests, if any, will
be payable, the right of the Company, if any, to defer payment of interest on
the Junior Subordinated Debt Securities and the maximum length of such
deferral period, the initial public offering price, and any listing on a
securities exchange and other specific terms of the offering; and (ii) in the
case of Preferred Securities, the specific designation, number of securities,
liquidation amount per security, initial public offering price, and any
listing on a securities exchange, distribution rate (or method of calculation
thereof), dates on which distributions shall be payable and dates from which
distributions shall accrue, voting rights (if any), terms for any conversion
or exchange into other securities, any redemption or sinking fund provisions,
any other rights, preferences, privileges, limitations or restrictions
relating to the Preferred Securities and the terms upon which the proceeds of
the sale of the Preferred Securities shall be used to purchase a specific
series of Junior Subordinated Debt Securities of the Company. Unless otherwise
indicated in the Prospectus Supplement, the Company does not intend to list
any of the securities on a national securities exchange.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering. Any Prospectus Supplement relating to
any series of Offered Securities will contain information concerning certain
United States Federal income tax considerations, if applicable, to the Offered
Securities. By separate prospectus, the form of which is included in the
Registration Statement of which this Prospectus is a part, the Company may
offer from time to time debt securities or preferred stock. The aggregate
initial public offering price of the securities to be offered by this
Prospectus and such other prospectus shall not exceed $500,000,000.
The Offered Securities may be offered directly through agents designated
from time to time, through dealers or through underwriters. Such agents or
underwriters may act alone or with other agents or underwriters. See "Plan of
Distribution." Any such agents, dealers or underwriters will be set forth in a
Prospectus Supplement. If an agent of the Company and/or any DLJ Trust, or a
dealer or underwriter is involved in the offering of the Offered Securities,
the agent's commission, dealer's purchase price, underwriter's discount and
net proceeds to the Company, as the case may be, will be set forth in, or may
be calculated from, the Prospectus Supplement. Any underwriters, dealers or
agents participating in the offering may be deemed "underwriters" within the
meaning of the Securities Act of 1933.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
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 COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The registration
statement of which this Prospectus forms a part, as well as reports, proxy
statements and other information filed by the Company, may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, 7 World Trade Center, New York,
New York 10048; and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., 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. The Company's Common Stock is listed on the New York Stock
Exchange, Inc. and reports and other information concerning the Company can
also be inspected at the office of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
This Prospectus constitutes a part of the Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed with the Commission under the Securities Act of 1933 (the
"Securities Act") with respect to the Offered Securities. This Prospectus does
not contain all of the information set forth in such Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Reference is made to such Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company, the DLJ Trusts and the Offered Securities. Any
statements contained herein concerning the provisions of any document filed as
an exhibit to the Registration Statement or otherwise filed with the
Commission or incorporated by reference herein are not necessarily complete,
and in each instance reference is made to the copy of such document so filed
for a more complete description of the matter involved. Each such statement is
qualified in its entirety by such reference.
No separate financial statements of any of the DLJ Trusts have been
included or incorporated by reference herein. The Company and the DLJ Trusts
do not consider that such financial statements would be material to holders of
the Preferred Securities because (i) all of the voting securities of each DLJ
Trust will be owned, directly or indirectly, by the Company, a reporting
company under the Exchange Act, (ii) each of the DLJ Trusts is a newly-formed
special purpose entity, has no operating history, has no independent
operations and is not engaged in, and does not propose to engage in, any
activity other than issuing Trust Securities (as defined herein) representing
undivided beneficial interests in the assets of such DLJ Trust and investing
the proceeds thereof in Junior Subordinated Debt Securities issued by the
Company and (iii) the obligations of each of the DLJ Trusts under the
Preferred Securities of that DLJ Trust are fully and unconditionally
guaranteed by the Company as and to the extent described herein. See "The DLJ
Trusts," "Description of the Preferred Securities," "Description of the
Preferred Securities Guarantees" and "Description of the Junior Subordinated
Debt Securities." The DLJ Trusts are statutory business trusts formed under
the laws of the State of Delaware. The Company, as of the date of this
Prospectus, beneficially owns all of the beneficial interests in each DLJ
Trust. Each holder of Preferred Securities of a DLJ Trust will be furnished
annually with unaudited financial statements of such Trust as soon as
available after the end of the Trust's fiscal year.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1995, Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 and
Current Reports on Form 8-K dated Febuary 9, 1996 and February 12, 1996,
previously filed by the Company with the Commission, are incorporated by
reference in this Prospectus.
All documents filed by the Company after the date of this Prospectus
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the termination of the offering of the Offered Securities offered hereby,
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of 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 statements as modified or superseded shall
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may
be incorporated by reference in this Prospectus (other than certain exhibits
to such documents). Requests for such documents should be directed to
Donaldson, Lufkin & Jenrette, Inc., 277 Park Avenue, New York, New York 10172,
Attention: Corporate Secretary (Telephone: (212) 892-3000).
2
<PAGE>
USE OF PROCEEDS
Each DLJ Trust will use all proceeds received from the sale of its Trust
Securities to purchase Junior Subordinated Debt Securities from the Company.
Unless otherwise set forth in the applicable Prospectus Supplement,
proceeds from the sale of Junior Subordinated Debt Securities will be used by
the Company for general corporate purposes and initially may be temporarily
invested in short-term securities.
RATIOS OF EARNINGS
TO FIXED CHARGES AND EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends for the
Company for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
-------------------------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
1991 1992 1993 1994 1995 1996
Ratio of earnings to fixed
charges (1) ................. 1.07 1.21 1.20 1.10 1.11 1.16
Ratio of earnings to combined
fixed charges and preferred
stock dividends (2) ......... -- -- -- 1.09 1.10 1.15
</TABLE>
- ------------
(1) For the purpose of calculating the ratio of earnings to fixed charges
(i) earnings consist of income before provision for income taxes and
fixed charges and (ii) fixed charges consist of interest expense and
one-third of rental expense which is deemed representative of an
interest factor.
(2) For the purpose of calculating the ratio of earnings to combined fixed
charges and preferred stock dividends (i) earnings consist of income
before provision for income taxes and fixed charges and (ii) fixed
charges consist of interest expense and one-third of rental expense
which is deemed representative of an interest factor. No preferred
dividends were paid until 1994.
3
<PAGE>
THE COMPANY
The Company is a leading integrated investment and merchant bank that
serves institutional, corporate, governmental and individual clients. The
Company's businesses include securities underwriting, sales and trading;
merchant banking; financial advisory services; investment research;
correspondent brokerage services; and asset management. While results have
fluctuated from year to year, for the years 1991 through 1995, the Company's
total revenues and net income increased by a compound annual growth rate of
22.8% and 32.7%, respectively. The Company's average annual after-tax return
on common equity for the past five years was 23.1%. At March 31, 1996, the
Company had total assets of $46.6 billion and total stockholders' equity of
$1.3 billion.
The Company's principal strategy is to focus its resources on certain core
businesses where management believes the Company can compete profitably and be
among the leading participants in each targeted market. Over the past several
years, the Company has significantly expanded the scope of its business
activities and its customer base, both in the U.S. and internationally. It has
established strong positions in selected high-margin activities, including
equity and high-yield corporate securities underwriting as well as merchant
banking, and has increased its market share in a broad range of businesses.
Key elements of this expansion have been the Company's recruitment of
experienced professionals during periods of turmoil in the securities
industry, the continued development and retention of the Company's existing
personnel at all levels and the continuity of senior management. In addition,
the Company has historically emphasized economic and investment research in
the development of its business and believes that its commitment to research
has been an important contributor to its success.
The Company conducts its business through three principal operating groups,
each of which is an important contributor to revenues and earnings: the
Banking Group, which includes the Company's Investment Banking, Merchant
Banking and Emerging Markets groups; the Capital Markets Group, consisting of
the Company's institutional debt and equity businesses as well as Sprout, its
venture capital affiliate; and the Financial Services Group, comprised of its
Pershing clearing division, high-net-worth retail brokerage and asset
management businesses.
The Company's Banking Group is a major participant in the raising of
capital and the providing of financial advice to companies throughout the U.S.
and has significantly expanded its activities abroad. Through its Investment
Banking group, the Company manages and underwrites public offerings of
securities, arranges private placements and provides advisory and other
services in connection with mergers, acquisitions, restructurings and other
financial transactions. Since 1991, the Investment Banking group has raised
over $190.0 billion for clients from the public and private markets in
corporate equity and debt securities and has completed over 350 merger and
acquisition, restructuring and divestiture assignments aggregating
approximately $89.0 billion. Its Merchant Banking group pursues direct
investments in a variety of areas through a number of investment vehicles
funded with capital provided primarily by institutional investors, the Company
and its employees. Since the Company began investing in leveraged investments
in 1985 through March 31, 1996, it invested over $1.0 billion on behalf of the
Company, its employees and funds it manages in 52 companies with an aggregate
purchase price of over $19.5 billion and achieved an average annual internal
rate of return substantially in excess of comparable industry benchmarks. The
Emerging Markets group specializes in client advisory services, merchant
banking and the underwriting, sales and trading of securities in Latin
America, Asia and certain other international markets.
The Capital Markets Group encompasses a broad range of activities including
trading, research, origination and distribution of equity and fixed-income
securities, private equity investments and venture capital. Its focus is
primarily client-driven, in contrast to that of many other securities firms
which emphasize proprietary trading, an approach that reduces the Company's
exposure to market volatility. Its Taxable Fixed-Income division provides
institutional clients with research, trading and sales services for a broad
range of taxable fixed-income products including high-yield corporate,
investment-grade corporate, U.S. government and mortgage-backed securities.
The Institutional Equities division provides institutional clients with
research, trading and sales services in U.S. listed and over-the-counter
equity securities. The Company's equity sales and trading capabilities,
combined with its research expertise, have contributed to commission revenues
increasing, for the years 1991 through 1995, at a compound annual
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growth rate of 15.6%. In addition, the Company's Equity Derivatives division
provides a broad range of equity and index options products, while Sprout is
one of the oldest and largest groups in the private equity investment and
venture capital industry.
The Financial Services Group provides a broad array of services to
individual investors and the financial intermediaries which represent them.
Pershing is a leading provider of correspondent brokerage services, clearing
transactions for over 600 U.S. brokerage firms which collectively maintain
over 1.3 million client accounts. These client accounts held over $127.0
billion of assets at March 31, 1996. During 1995, Pershing accounted for more
than 10% of the daily reported trading volume on the NYSE. In addition,
Pershing's PC Financial Network (Service Mark) , a leading on-line discount
broker in the U.S., has experienced significant growth over the past several
years. The Company's Investment Services Group, which consists of
approximately 270 account executives, provides high-net-worth individuals and
medium to smaller size institutions with access to the Company's equity and
fixed-income research, trading services and underwriting and has one of the
highest revenues per account executive in the industry. Through Wood,
Struthers & Winthrop Management Corp. and affiliates the Company provides
investment management and trust services primarily to high-net-worth
individual investors and institutions, and at March 31, 1996 had over $4.1
billion in assets under management.
Apart from its three principal operating groups, the Company also maintains
a separate brokerage subsidiary, Autranet Management Corp., which provides
institutional investors with research generated by independent originators
that are not affiliated with Wall Street brokerage firms.
Founded in 1959, the Company initially focused on providing in-depth
investment research to institutional investors. In 1970, the Company became
the first member firm of the New York Stock Exchange, Inc. to be owned
publicly. Fifteen years later, the Company was purchased by subsidiaries of
The Equitable Companies Incorporated ("EQ") (EQ and its subsidiaries other
than the Company, collectively, "Equitable"). Equitable, which as of March 31,
1996 owned an approximately 80% interest in the Company following the
Company's initial public offering in October 1995, is a diversified financial
services organization and one of the world's largest investment management
organizations. AXA is EQ's largest stockholder, beneficially owning at March
31, 1996, approximately 60.7% of EQ's outstanding shares of common stock and
$392.2 million of EQ's Series E convertible preferred stock.
The principal executive offices of the Company are located at 277 Park
Avenue, New York, NY, 10172 and its telephone number is (212) 892-3000. The
Company has 17 additional offices in 14 locations in the U.S., and ten offices
in Europe, Asia and Latin America.
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THE DLJ TRUSTS
Each of DLJ Capital Trust I, DLJ Capital Trust II, DLJ Capital Trust III
and DLJ Capital Trust IV is a statutory business trust formed on June 19, 1996
under the Delaware Business Trust Act (the "Business Trust Act") pursuant to a
separate declaration of trust among the Trustees (as defined herein) of such
DLJ Trust and the Company and the filing of a certificate of trust with the
Secretary of State of the State of Delaware. Such declaration will be amended
and restated in its entirety (as so amended and restated, the "Declaration")
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus forms a part, as of the date the Preferred Securities of
such DLJ Trust are initially issued. Each Declaration will be qualified under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
This description summarizes the material terms of the Declarations and is
qualified in its entirety by reference to the form of Declaration, which has
been filed as an exhibit to the Registration Statement of which this
Prospectus is a part, and the Trust Indenture Act.
TRUST SECURITIES
Upon issuance of any Preferred Securities by a DLJ Trust, the holders
thereof will own all of the issued and outstanding Preferred Securities of
such DLJ Trust. The Company will acquire securities representing common
undivided beneficial interests in the assets of each DLJ Trust (the "Common
Securities" and, together with the Preferred Securities, the "Trust
Securities") in an amount equal to at least 3% of the total capital of such
DLJ Trust and will own, directly or indirectly, all of the issued and
outstanding Common Securities of each DLJ Trust. The Preferred Securities and
the Common Securities will rank pari passu with each other and will have
equivalent terms; provided that (i) if a Declaration Event of Default (as
defined herein) under the Declaration of a DLJ Trust occurs and is continuing,
the holders of Preferred Securities of such DLJ Trust will have a priority
over holders of the Common Securities of such DLJ Trust with respect to
payments in respect of distributions and payments upon liquidation, redemption
and maturity and (ii) holders of Common Securities have the exclusive right
(subject to the terms of the Declaration) to appoint, remove or replace the
Trustees and to increase or decrease the number of Trustees. Each DLJ Trust
exists for the purpose of (a) issuing its Preferred Securities, (b) issuing
its Common Securities to the Company, (c) investing the gross proceeds from
the sale of the Trust Securities in Junior Subordinated Debt Securities of the
Company and (d) engaging in only such other activities as are necessary,
convenient or incidental thereto. The rights of the holders of the Preferred
Securities, including economic rights, rights to information and voting
rights, are set forth in the applicable Declaration, the Business Trust Act
and the Trust Indenture Act.
POWERS AND DUTIES OF TRUSTEES
The number of trustees (the "Trustees") of each DLJ Trust shall initially
be five. Three of such Trustees (the "Regular Trustees") are individuals who
are employees or officers of the Company. The fourth such trustee will be The
Bank of New York, which is unaffiliated with the Company and which will serve
as the property trustee (the "Property Trustee") and act as the indenture
trustee for purposes of the Trust Indenture Act. The fifth such trustee is an
affiliate of The Bank of New York that has its principal place of business in
the State of Delaware (the "Delaware Trustee"). Pursuant to each Declaration,
legal title to the Junior Subordinated Debt Securities purchased by a DLJ
Trust will be held by the Property Trustee for the benefit of the holders of
the Trust Securities of such DLJ Trust, and the Property Trustee will have the
power to exercise all rights, powers and privileges under the Indenture (as
defined under "Description of the Junior Subordinated Debt Securities") with
respect to the Junior Subordinated Debt Securities. In addition, the Property
Trustee will maintain exclusive control of a segregated non-interest bearing
bank account (the "Property Account") to hold all payments in respect of the
Junior Subordinated Debt Securities purchased by a DLJ Trust for the benefit
of the holders of Trust Securities. The Property Trustee will promptly make
distributions to the holders of the Trust Securities out of funds from the
Property Account. The Preferred Securities Guarantees are separately qualified
under the Trust Indenture Act and will be held by The Bank of New York, acting
in its capacity as indenture trustee with respect thereto, for the benefit of
the holders of the applicable Preferred Securities. As used in this Prospectus
and any accompanying Prospectus Supplement, the term "Property Trustee" with
respect to a DLJ Trust refers to The Bank of New York acting either in its
capacity as a Trustee under the relevant Declaration and the holder of legal
title to the Junior Subordinated Debt Securities purchased by that Trust or in
its capacity as indenture trustee under, and the holder of, the applicable
Preferred Securities Guarantee, as the context may require. The Company, as
the direct or indirect owner of all of the Common Securities of each DLJ
Trust, will have the exclusive right (subject to the terms of the related
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Declaration) to appoint, remove or replace Trustees and to increase or
decrease the number of Trustees, provided that the number of Trustees shall be
at least five and the majority of Trustees shall be Regular Trustees. The term
of a DLJ Trust will be set forth in the Prospectus Supplement, but may
terminate earlier as provided in such Declaration.
The duties and obligations of the Trustees of a DLJ Trust shall be governed
by the Declaration of such DLJ Trust. Under its Declaration, each DLJ Trust
shall not, and the Trustees shall cause such DLJ Trust not to, engage in any
activity other than in connection with the purposes of such DLJ Trust or other
than as required or authorized by the related Declaration. In particular, each
DLJ Trust shall not and the Trustees shall not (a) invest any proceeds
received by such DLJ Trust from holding the Junior Subordinated Debt
Securities purchased by such DLJ Trust but shall promptly distribute from the
Property Account all such proceeds to holders of Trust Securities pursuant to
the terms of the related Declaration and of the Trust Securities; (b) acquire
any assets other than as expressly provided in the related Declaration; (c)
possess Trust property for other than a Trust purpose; (d) make any loans,
other than loans represented by the Junior Subordinated Debt Securities; (e)
possess any power or otherwise act in such a way as to vary the assets of such
DLJ Trust or the terms of its Trust Securities in any way whatsoever; (f)
issue any securities or other evidences of beneficial ownership of, or
beneficial interests in, such DLJ Trust other than its Trust Securities; (g)
incur any indebtedness for borrowed money or (h)(i) direct the time, method
and place of exercising any trust or power conferred upon the Indenture
Trustee (as defined under "Description of the Junior Subordinated Debt
Securities") with respect to the Junior Subordinated Debt Securities deposited
in that DLJ Trust as trust assets or upon the Property Trustee of that DLJ
Trust with respect to its Preferred Securities, (ii) waive any past default
that is waivable under the Indenture or the Declaration, (iii) exercise any
right to rescind or annul any declaration that the principal of all of the
Junior Subordinated Debt Securities deposited in that DLJ Trust as trust
assets shall be due and payable or (iv) consent to any amendment, modification
or termination of the Indenture or such Junior Subordinated Debt Securities or
the Declaration, in each case where such consent shall be required, unless in
the case of this clause (h) the Property Trustee shall have received an
unqualified opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that such action will not
cause such DLJ Trust to be classified for United States Federal income tax
purposes as an association taxable as a corporation or a partnership and that
such DLJ Trust will continue to be classified as a grantor trust for United
States Federal income tax purposes.
BOOKS AND RECORDS
The books and records of each DLJ Trust will be maintained at the principal
office of such DLJ Trust and will be open for inspection by a holder of
Preferred Securities of such DLJ Trust or his representative for any purpose
reasonably related to his interest in such DLJ Trust during normal business
hours. Each holder of Preferred Securities will be furnished annually with
unaudited financial statements of the applicable DLJ Trust as soon as
available after the end of such DLJ Trust's fiscal year.
VOTING
Except as provided under the Business Trust Act, the Declaration and the
Trust Indenture Act, holders of Preferred Securities will have no voting
rights.
THE PROPERTY TRUSTEE
The Property Trustee, for the benefit of the holders of the Trust
Securities of a DLJ Trust, is authorized under each Declaration to exercise
all rights under the Indenture with respect to the Junior Subordinated Debt
Securities deposited in such DLJ Trust as trust assets, including its rights
as the holder of such Junior Subordinated Debt Securities to enforce the
Company's obligations under such Junior Subordinated Debt Securities upon the
occurrence of an Indenture Event of Default. The Property Trustee shall also
be authorized to enforce the rights of holders of Preferred Securities of a
DLJ Trust under the related Preferred Securities Guarantee. If any DLJ Trust's
failure to make distributions on the Preferred Securities of a DLJ Trust is a
consequence of the Company's exercise of any right under the terms of the
Junior Subordinated Debt Securities deposited in such DLJ Trust as trust
assets to extend the
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interest payment period for such Junior Subordinated Debt Securities, the
Property Trustee will have no right to enforce the payment of distributions on
such Preferred Securities until a Declaration Event of Default shall have
occurred. Holders of a least a majority in liquidation amount of the Preferred
Securities held by a DLJ Trust will have the right to direct the Property
Trustee for that DLJ Trust with respect to certain matters under the
Declaration for that DLJ Trust and the related Preferred Securities Guarantee.
If the Property Trustee fails to enforce its rights under the Indenture or
fails to enforce the Preferred Securities Guarantee, to the extent permitted
by applicable law, any holder of Preferred Securities may institute a legal
proceeding against the Company to enforce such rights or the Preferred
Securities Guarantee, as the case may be. In addition, the holders of at least
25% in aggregate liquidation preference of the outstanding Preferred
Securities would have the right to directly institute proceedings for
enforcement of payment to such holders of principal of, or premium, if any, or
interest on the Junior Subordinated Debentures having a principal amount equal
to the aggregate liquidation preference of the Preferred Securities of such
holders.
DISTRIBUTIONS
Pursuant to each Declaration, distributions on the Preferred Securities of
a DLJ Trust must be paid on the dates payable to the extent that the Property
Trustee for that DLJ Trust has cash on hand in the applicable Property Account
to permit such payment. The funds available for distribution to the holders of
the Preferred Securities of a DLJ Trust will be limited to payments received
by the Property Trustee in respect of the Junior Subordinated Debt Securities
that are deposited in the DLJ Trust as trust assets. If the Company does not
make interest payments on the Junior Subordinated Debt Securities deposited in
a DLJ Trust as trust assets, the Property Trustee will not make distributions
on the Preferred Securities of such DLJ Trust. Under the Declaration, if and
to the extent the Company does make interest payments on the Junior
Subordinated Debt Securities deposited in a DLJ Trust as trust assets, the
Property Trustee is obligated to make distributions on the Trust Securities of
such DLJ Trust on a Pro Rata Basis (as defined below). The payment of
distributions on the Preferred Securities of a DLJ Trust is guaranteed by DLJ
on a subordinated basis as and to the extent set forth under "Description of
the Preferred Securities Guarantee." A Preferred Securities Guarantee is a
full and unconditional guarantee from the time of issuance of the applicable
Preferred Securities, but the Preferred Securities Guarantee covers
distributions and other payments on the applicable Preferred Securities only
if and to the extent that the Company has made a payment to the Property
Trustee of interest or principal on the Junior Subordinated Debt Securities
deposited in the DLJ Trust as trust assets. As used in this Prospectus, the
term "Pro Rata Basis" shall mean pro rata to each holder of Trust Securities
of a DLJ Trust according to the aggregate liquidation amount of the Trust
Securities of such DLJ Trust held by the relevant holder in relation to the
aggregate liquidation amount of all Trust Securities of such DLJ Trust
outstanding unless, in relation to a payment, a Declaration Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each holder of the
Preferred Securities of such DLJ Trust pro rata according to the aggregate
liquidation amount of the Preferred Securities held by the relevant holder in
relation to the aggregate liquidation amount of all the Preferred Securities
of such DLJ Trust outstanding, and only after satisfaction of all amounts owed
to the holders of such Preferred Securities, to each holder of Common
Securities of such DLJ Trust pro rata according to the aggregate liquidation
amount of such Common Securities held by the relevant holder in relation to
the aggregate liquidation amount of all Common Securities of such DLJ Trust
outstanding.
EVENTS OF DEFAULT
If an Indenture Event of Default occurs and is continuing with respect to
Junior Subordinated Debt Securities deposited in a DLJ Trust as trust assets,
an Event of Default under the Declaration (a "Declaration Event of Default")
of such DLJ Trust will occur and be continuing with respect to any outstanding
Trust Securities of such DLJ Trust. In such event, each Declaration provides
that the holders of Common Securities of such DLJ Trust will be deemed to have
waived any such Declaration Event of Default with respect to the Common
Securities until all Declaration Events of Default with respect to the
Preferred Securities of such DLJ Trust have been cured or waived. Until all
such Declaration Events of Default with respect to the Preferred Securities of
such DLJ Trust have been so cured or waived, the
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Property Trustee will be deemed to be acting solely on behalf of the holders
of the Preferred Securities of such DLJ Trust and only the holders of such
Preferred Securities will have the right to direct the Property Trustee with
respect to certain matters under such Declaration and consequently under the
Indenture. In the event that any Declaration Event of Default with respect to
the Preferred Securities of such DLJ Trust is waived by the holders of the
Preferred Securities of such DLJ Trust as provided in the Declaration, the
holders of Common Securities pursuant to such Declaration have agreed that
such waiver also constitutes a waiver of such Declaration Event of Default
with respect to the Common Securities for all purposes under the Declaration
without any further act, vote or consent of the holders of the Common
Securities.
RECORD HOLDERS
Each Declaration provides that the Trustees of such DLJ Trust may treat the
person in whose name a Certificate representing its Preferred Securities is
registered on the books and records of such DLJ Trust as the sole holder
thereof and of the Preferred Securities represented thereby for purposes of
receiving distributions and for all other purposes and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
certificate or in the Preferred Securities represented thereby on the part of
any person, whether or not such DLJ Trust shall have actual or other notice
thereof. Preferred Securities will be issued in fully registered form. Unless
otherwise specified in a Prospectus Supplement, Preferred Securities will be
represented by a global certificate registered on the books and records of
such DLJ Trust in the name of a depositary (the "Depositary") named in an
accompanying Prospectus Supplement or its nominee. Under each Declaration:
(i) such DLJ Trust and the Trustees thereof shall be entitled to deal
with the Depositary (or any successor depositary) for all purposes,
including the payment of distributions and receiving approvals, votes or
consents under the related Declaration, and except as set forth in the
related Declaration with respect to the Property Trustee, shall have no
obligation to persons owning a beneficial interest in Preferred Securities
("Preferred Security Beneficial Owners") registered in the name of and
held by the Depositary or its nominee; and
(ii) the rights of Preferred Security Beneficial Owners shall be
exercised only through the Depositary (or any successor depositary) and
shall be limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Depositary and/or its
participants. With respect to Preferred Securities registered in the name
of and held by the Depositary or its nominee, all notices and other
communications required under each Declaration shall be given to, and all
distributions on such Preferred Securities shall be given or made to, the
Depositary (or its successor).
The specific terms of the depositary arrangement with respect to the Preferred
Securities will be disclosed in the applicable Prospectus Supplement.
DEBTS AND OBLIGATIONS
In each Declaration, the Company has agreed to pay for all debts and
obligations (other than with respect to the Trust Securities) and all costs
and expenses of the applicable DLJ Trust, including the fees and expenses of
its Trustees and any taxes and all costs and expenses with respect thereto, to
which such DLJ Trust may become subject, except for United States withholding
taxes. The foregoing obligations of the Company under each Declaration are for
the benefit of, and shall be enforceable by, any person to whom any such
debts, obligations, costs, expenses and taxes are owed (a "Creditor") whether
or not such Creditor has received notice thereof. Any such Creditor may
enforce such obligations of the Company directly against the Company and the
Company has irrevocably waived any right or remedy to require that any such
Creditor take any action against any DLJ Trust or any other person before
proceeding against the Company. The Company has agreed in each Declaration to
execute such additional agreements as may be necessary or desirable in order
to give full effect to the foregoing.
The business address of each DLJ Trust is c/o Donaldson, Lufkin & Jenrette,
Inc., 277 Park Avenue, New York, NY 10172, telephone number (212) 892-3000.
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DESCRIPTION OF THE PREFERRED SECURITIES
Each DLJ Trust may issue, from time to time, only one series of Preferred
Securities having terms described in the Prospectus Supplement relating
thereto. The Declaration of each DLJ Trust authorizes the Regular Trustees of
such DLJ Trust to issue on behalf of such DLJ Trust one series of Preferred
Securities. Each Declaration will be qualified as an indenture under the Trust
Indenture Act. The Preferred Securities will have such terms, including
distributions, redemption, voting, liquidation rights and such other
preferred, deferred or other special rights or such restrictions as shall be
set forth in the related Declaration or made part of such Declaration by the
Trust Indenture Act. Reference is made to the Prospectus Supplement relating
to the Preferred Securities of a DLJ Trust for specific terms, including (i)
the specific designation of such Preferred Securities, (ii) the number of
Preferred Securities issued by such DLJ Trust, (iii) the annual distribution
rate (or method of calculation thereof) for Preferred Securities issued by
such DLJ Trust, the date or dates upon which such distributions shall be
payable and the record date or dates for the payment of such distributions,
(iv) whether distributions on Preferred Securities issued by such DLJ Trust
shall be cumulative, and, in the case of Preferred Securities having such
cumulative distribution rights, the date or dates or method of determining the
date or dates from which distributions on Preferred Securities issued by such
DLJ Trust shall be cumulative, (v) the amount or amounts which shall be paid
out of the assets of such DLJ Trust to the holders of Preferred Securities of
such DLJ Trust upon voluntary or involuntary dissolution, winding-up or
termination of such DLJ Trust, (vi) the obligation or right, if any, of such
DLJ Trust to purchase or redeem Preferred Securities issued by such DLJ Trust
and the price or prices at which, the period or periods within which and the
terms and conditions upon which Preferred Securities issued by such DLJ Trust
shall or may be purchased or redeemed, in whole or in part, pursuant to such
obligation or right, (vii) the voting rights, if any, of Preferred Securities
issued by such DLJ Trust in addition to those required by law, including the
number of votes per Preferred Security and any requirement for the approval by
the holders of Preferred Securities, or of Preferred Securities issued by one
or more DLJ Trusts, or of both, as a condition to specified actions or
amendments to the Declaration of such DLJ Trust, (viii) terms for any
conversion or exchange into other securities and (ix) any other relevant
rights, preferences, privileges, limitations or restrictions of Preferred
Securities issued by such DLJ Trust consistent with the Declaration of such
DLJ Trust or with applicable law. All Preferred Securities offered hereby will
be guaranteed by the Company as and to the extent set forth below under
"Description of the Preferred Securities Guarantees." Certain United States
Federal income tax considerations applicable to any offering of Preferred
Securities will be described in the Prospectus Supplement relating thereto.
In connection with the issuance of Preferred Securities, each DLJ Trust
will issue one series of Common Securities. The Declaration of each DLJ Trust
authorizes the Regular Trustees of such trust to issue on behalf of such DLJ
Trust one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions as
shall be set forth therein. The terms of the Common Securities issued by a DLJ
Trust will be substantially identical to the terms of the Preferred Securities
issued by such DLJ Trust and the Common Securities will rank pari passu, and
payments will be made thereon on a Pro Rata Basis with the Preferred
Securities except that if a Declaration Event of Default occurs and is
continuing, the rights of the holders of such Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and
maturity will be subordinated to the rights of the holders of such Preferred
Securities. Except in certain limited circumstances, the Common Securities
issued by a DLJ Trust will also carry the right to vote and to appoint, remove
or replace any of the Trustees of that DLJ Trust. All of the Common Securities
of a DLJ Trust will be directly or indirectly owned by the Company.
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DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Preferred
Securities Guarantees that will be executed and delivered by the Company for
the benefit of the holders from time to time of Preferred Securities. Each
Preferred Security Guarantee will be separately qualified under the Trust
Indenture Act and will be held by The Bank of New York, acting in its capacity
as indenture trustee with respect thereto, for the benefit of holders of the
Preferred Securities of the applicable DLJ Trust. The terms of each Preferred
Securities Guarantee will be those set forth in such Preferred Securities
Guarantee and those made part of such Guarantee by the Trust Indenture Act.
This description summarizes the material terms of the Preferred Securities
Guarantees and is qualified in its entirety by reference to the form of
Preferred Securities Guarantee, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act. Section and Article references used herein are references to
the provisions of the form of Preferred Securities Guarantee.
GENERAL
Pursuant to each Preferred Securities Guarantee, the Company will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities issued by a DLJ Trust, the
Guarantee Payments (as defined herein) (without duplication of amounts
theretofore paid by such DLJ Trust), to the extent not paid by such DLJ Trust,
regardless of any defense, right of set-off or counterclaim that such DLJ
Trust may have or assert. The following payments or distributions with respect
to Preferred Securities issued by a DLJ Trust to the extent not paid or made
by such DLJ Trust (the "Guarantee Payments"), will be subject to the Preferred
Securities Guarantee (without duplication): (i) any accrued and unpaid
distributions on such Preferred Securities, and the redemption price,
including all accrued and unpaid distributions to the date of redemption, with
respect to any Preferred Securities called for redemption by such DLJ Trust
but if and only to the extent that in each case the Company has made a payment
to the related Property Trustee of interest or principal on the Junior
Subordinated Debt Securities deposited in such DLJ Trust as trust assets and
(ii) upon a voluntary or involuntary dissolution, winding-up or termination of
such DLJ Trust (other than in connection with the distribution of such Junior
Subordinated Debt Securities to the holders of Preferred Securities or the
redemption of all of the Preferred Securities upon the maturity or redemption
of such Junior Subordinated Debt Securities) the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid distributions on such
Preferred Securities to the date of payment, to the extent such DLJ Trust has
funds available therefor or (b) the amount of assets of such DLJ Trust
remaining available for distribution to holders of such Preferred Securities
in liquidation of such DLJ Trust. The Company's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Company to the holders of Preferred Securities or by causing the applicable
DLJ Trust to pay such amounts to such holders.
The Preferred Securities Guarantee is a full and unconditional guarantee
from the time of issuance of the applicable Preferred Securities, but the
Preferred Securities Guarantee covers distributions and other payments on such
Preferred Securities only if and to the extent that the Company has made a
payment to the Property Trustee of interest or principal on the Junior
Subordinated Debt Securities deposited in the applicable DLJ Trust as trust
assets. If the Company does not make interest or principal payments on the
Junior Subordinated Debt Securities deposited in the applicable DLJ Trust as
trust assets, the Property Trust will not make distributions of the Preferred
Securities of such DLJ Trust and the DLJ Trust will not have funds available
therefor.
The Company's obligations under the Declaration for each Trust, the
Preferred Securities Guarantee issued with respect to Preferred Securities
issued by that Trust, the Junior Subordinated Debt Securities purchased by
that Trust and the related Indenture (as defined below) in the aggregate will
provide a full and unconditional guarantee on a subordinated basis by the
Company of payments due on the Preferred Securities issued by that Trust.
CERTAIN COVENANTS OF THE COMPANY
In each Preferred Securities Guarantee, the Company will covenant that, so
long as any Preferred Securities issued by the applicable DLJ Trust remain
outstanding, the Company will not (A) declare or
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pay any dividends on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock or preferred
stock or make any guarantee payment with respect thereto or (B) make any
payment of interest, premium (if any) or principal on any debt securities
issued by the Company which rank pari passu with or junior to the Junior
Subordinated Debt Securities, if at such time (i) the Company shall be in
default with respect to its Guarantee Payments or other payment obligations
under the Preferred Securities Guarantee, (ii) there shall have occurred any
Declaration Event of Default under the related Declaration or (iii) in the
event that Junior Subordinated Debt Securities are issued to a DLJ Trust in
connection with the issuance of Trust Securities by such DLJ Trust, the
Company shall have given notice of its election to defer payments of interest
on such Junior Subordinated Debt Securities by extending the interest payment
period as provided in the terms of the Junior Subordinated Debt Securities and
such period, or any extension thereof, is continuing; provided that (a) the
Company will be permitted to pay accrued dividends (and cash in lieu of
fractional shares) upon the conversion of Preferred Stock of the Company as
may be outstanding from time to time, in each case in accordance with the
terms of such stock. In addition, so long as any Preferred Securities remain
outstanding, the Company has agreed (i) to remain the sole direct or indirect
owner of all of the outstanding Common Securities issued by the applicable DLJ
Trust and shall not cause or permit the Common Securities to be transferred
except to the extent permitted by the related Declaration; provided that any
permitted successor of the Company under the Indenture may succeed to the
Company's ownership of the Common Securities issued by the applicable DLJ
Trust and (ii) to use reasonable efforts to cause such DLJ Trust to continue
to be treated as a grantor trust for United States Federal income tax purposes
except in connection with a distribution of Junior Subordinated Debt
Securities. (Section 6.1)
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no consent will be
required), each Preferred Securities Guarantee may be amended only with the
prior approval of the holders of not less than 66 2/3 % in liquidation amount
of the outstanding Preferred Securities issued by the applicable DLJ Trust.
The manner of obtaining any such approval of holders of such Preferred
Securities will be set forth in an accompanying Prospectus Supplement.
(Section 9.2) All guarantees and agreements contained in a Preferred
Securities Guarantee shall bind the successors, assignees, receivers, trustees
and representatives of the Company and shall inure to the benefit of the
holders of the Preferred Securities of the applicable DLJ Trust then
outstanding. Except in connection with a consolidation, merger or sale
involving the Company that is permitted under the Indenture, the Company may
not assign its obligations under any Preferred Securities Guarantee. (Section
9.1)
TERMINATION OF THE PREFERRED SECURITIES GUARANTEES
Each Preferred Securities Guarantee will terminate and be of no further
force and effect as to the Preferred Securities issued by the applicable DLJ
Trust upon full payment of the redemption price of all Preferred Securities of
such DLJ Trust, or upon distribution of the Junior Subordinated Debt
Securities to the holders of the Preferred Securities of such DLJ Trust in
exchange for all of the Preferred Securities issued by such DLJ Trust, or upon
full payment of the amounts payable upon liquidation of such DLJ Trust.
Notwithstanding the foregoing, each Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of Preferred Securities issued by the applicable DLJ Trust
must restore payment of any sums paid under such Preferred Securities or such
Guarantee. (Section 7.1)
STATUS OF THE PREFERRED SECURITIES GUARANTEES
The Company's obligations under each Preferred Securities Guarantee to make
the Guarantee Payments will constitute an unsecured obligation of the Company
and will rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, including the Junior Subordinated Debt Securities,
except those made pari passu or subordinate by their terms, and (ii) senior to
all capital stock now or hereafter issued by the Company and to any guarantee
now or hereafter entered into by the
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Company in respect of any of its capital stock. The Company's obligations
under each Preferred Securities Guarantee will rank pari passu with each other
Preferred Securities Guarantee. (Section 6.2) Because the Company is a holding
company, the Company's obligations under each Preferred Securities Guarantee
are also effectively subordinated to all existing and future liabilities,
including trade payables, of the Company's subsidiaries, except to the extent
that the Company is a creditor of the subsidiaries recognized as such. Each
Declaration provides that each holder of Preferred Securities issued by the
applicable DLJ Trust by acceptance thereof agrees to the subordination
provisions and other terms of the related Preferred Securities Guarantee.
Each Preferred Securities Guarantee will constitute a guarantee of payment
and not of collection (that is, 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 Preferred Securities Guarantee will be deposited with
The Bank of New York, as indenture trustee, to be held for the benefit of the
holders of the Preferred Securities issued by the applicable DLJ Trust. The
Bank of New York shall enforce the Preferred Securities Guarantee on behalf of
the holders of the Preferred Securities issued by the applicable DLJ Trust.
The holders of not less than a majority in aggregate liquidation amount of the
Preferred Securities issued by the applicable DLJ Trust have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of the related Preferred Securities Guarantee, including
the giving of directions to The Bank of New York. If The Bank of New York
fails to enforce such Preferred Securities Guarantee as above provided, any
holder of Preferred Securities issued by the applicable DLJ Trust may
institute a legal proceeding directly against the Company to enforce its
rights under such Preferred Securities Guarantee, without first instituting a
legal proceeding against the applicable DLJ Trust or any other person or
entity.
MISCELLANEOUS
The Company will be required to provide annually to The Bank of New York a
statement as to the performance by the Company of certain of its obligations
under the Preferred Securities Guarantees and as to any default in such
performance. The Company is required to file annually with The Bank of New
York an officer's certificate as to the Company's compliance with all
conditions under Preferred Securities Guarantees. (Section 2.4)
The Bank of New York, prior to the occurrence of a default, undertakes to
perform only such duties as are specifically set forth in the applicable
Preferred Securities Guarantee and, after default with respect to a Preferred
Securities Guarantee, shall exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provision, The Bank of New York is under no obligation to exercise any of
the powers vested in it by a Preferred Securities Guarantee 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.
(Section 3.2)
GOVERNING LAW
The Guarantees will be governed by, and construed in accordance with, the
laws of the State of New York.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Junior Subordinated Debt Securities may be issued from time to time in one
or more series under an Indenture dated as of 1996 (the "Indenture") between
the Company and The Bank of New York, as trustee (the "Indenture Trustee").
The Indenture has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The following description summarizes the
material terms of the Indenture, and is qualified in its entirety by reference
to the Indenture and the Trust Indenture Act. Whenever particular provisions
or defined terms in the Indenture are referred to herein, such provisions or
defined terms are incorporated by reference herein. Section and Article
references used herein are references to provisions of the Indenture.
GENERAL
The Junior Subordinated Debt Securities will be unsecured, junior
subordinated obligations of the Company. The Indenture does not limit the
amount of additional indebtedness the Company or any of its subsidiaries may
incur. Since the Company is a holding company, the Company's rights and the
rights of its creditors, including the holders of Junior Subordinated Debt
Securities, to participate in the assets of any subsidiary upon the latter's
liquidation or recapitalization will be subject to the prior claims of the
subsidiary's creditors, except to the extent that the Company may itself be a
creditor with recognized claims against the subsidiary.
The Indenture does not limit the aggregate principal amount of indebtedness
which may be issued thereunder and provides that Junior Subordinated Debt
Securities may be issued thereunder from time to time in one or more series.
The Junior Subordinated Debt Securities are issuable in one or more series
pursuant to an indenture supplemental to the Indenture.
In the event Junior Subordinated Debt Securities are issued to a DLJ Trust
or a Trustee of such trust in connection with the issuance of Trust Securities
by such DLJ Trust, such Junior Subordinated Debt Securities subsequently may
be distributed pro rata to the holders of such Trust Securities in connection
with the dissolution of such DLJ Trust upon the occurrence of certain events
described in the Prospectus Supplement relating to such Trust Securities. Only
one series of Junior Subordinated Debt Securities will be issued to a DLJ
Trust or a trustee of such trust in connection with the issuance of Trust
Securities by such DLJ Trust.
Reference is made to the Prospectus Supplement which will accompany this
Prospectus for the following terms of the series of Junior Subordinated Debt
Securities being offered thereby (to the extent such terms are applicable to
the Junior Subordinated Debt Securities): (i) the specific designation of such
Junior Subordinated Debt Securities, aggregate principal amount and purchase
price; (ii) any limit on the aggregate principal amount of such Junior
Subordinated Debt Securities; (iii) the date or dates on which the principal
of such Junior Subordinated Debt Securities is payable and the right, if any,
to extend such date or dates; (iv) the rate or rates at which such Junior
Subordinated Debt Securities will bear interest or the method of calculating
such rate or rates, if any; (v) the date or dates from which such interest
shall accrue, the interest payment dates on which such interest will be
payable or the manner of determination of such interest payment dates and the
record dates for the determination of holders to whom interest is payable on
any such interest payment dates; (vi) the right, if any, to extend the
interest payment periods and the duration of such extension; (vii) the period
or periods within which, the price or prices at which, and the terms and
conditions upon which, such Junior Subordinated Debt Securities may be
redeemed, in whole or in part, at the option of the Company; (viii) the
obligation, if any of the Company to redeem or purchase such Junior
Subordinated Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of the holder thereof and the period or periods
for which, the price or prices at which, and the terms and conditions upon
which, such Junior Subordinated Debt Securities shall be redeemed or
purchased, in whole or part, pursuant to such obligation; (ix) any applicable
United States Federal income tax consequences, including whether and under
what circumstances the Company will pay additional amounts on the Junior
Subordinated Debt Securities held by a person who is not a U.S. person in
respect of any tax, assessment or governmental charge withheld or deducted
and, if so, whether the Company will have the option to redeem such Junior
Subordinated Debt Securities rather than pay such additional amounts; (x) the
form of such Junior Subordinated Debt Securities; (xi) if other than
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denominations of $25 or any integral multiple thereof, the denominations in
which such Junior Subordinated Debt Securities shall be issuable; (xii) any
and all other terms with respect to such series, including any modification of
or additions to the events of default or covenants provided for with respect
to the Junior Subordinated Debt Securities, and any terms which may be
required by or advisable under applicable laws or regulations not inconsistent
with the Indenture; and (xiii) whether such Junior Subordinated Debt
Securities are issuable as a global security, and in such case, the identity
of the depositary. (Section 2.01)
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Junior Subordinated Debentures will be issued in United States dollars in
fully registered form without coupons in denominations of $25 or integral
multiples thereof. Junior Subordinated Debt Securities may be presented for
exchange and Junior Subordinated Debt Securities in registered form may be
presented for transfer in the manner, at the places and subject to the
restrictions set forth in the Junior Subordinated Debt Securities and the
Prospectus Supplement. Such services will be provided without charge, other
than any tax or other governmental charge payable in connection therewith, but
subject to the limitations provided in the Indenture. Junior Subordinated Debt
Securities in bearer form and the coupons, if any, appertaining thereto will
be transferable by delivery.
Junior Subordinated Debt Securities may bear interest at a fixed rate or a
floating rate. Junior Subordinated Debt Securities bearing no interest or
interest at a rate that at the time of issuance is below the prevailing market
rate will be sold at a discount below their stated principal amount. Special
United States Federal income tax considerations applicable to any such
discounted Junior Subordinated Debt Securities or to certain Junior
Subordinated Debt Securities issued at par which are treated as having been
issued at a discount for United States Federal income tax purposes will be
described in the relevant Prospectus Supplement.
CERTAIN COVENANTS OF THE COMPANY APPLICABLE TO THE JUNIOR SUBORDINATED DEBT
SECURITIES
If Junior Subordinated Debt Securities are issued to a DLJ Trust in
connection with the issuance of Trust Securities by such DLJ Trust, the
Company will covenant in the Indenture that, so long as the Preferred
Securities issued by the applicable DLJ Trust remain outstanding, the Company
will not (a) declare or pay any dividends on, or redeem, purchase, acquire or
make a distribution or liquidation payment with respect to, any of its common
stock or preferred stock or make any guarantee payment with respect thereto if
at such time (i) the Company shall be in default with respect to its Guarantee
Payments or other payment obligations under the related Preferred Securities
Guarantee, (ii) there shall have occurred any Indenture Event of Default with
respect to the Junior Subordinated Debt Securities or (iii) in the event that
Junior Subordinated Debt Securities are issued to a DLJ Trust in connection
with the issuance of Trust Securities by such DLJ Trust, the Company shall
have given notice of its election to defer payments of interest on such Junior
Subordinated Debt Securities by extending the interest payment period as
provided in the terms of such Junior Subordinated Debt Securities and such
period, or any extension thereof, is continuing; provided that (x) the Company
will be permitted to pay accrued dividends (and cash in lieu of fractional
shares) upon the conversion of any Preferred Stock of the Company as may be
outstanding from time to time, in each case in accordance with the terms of
such stock and (y) the foregoing will not apply to any stock dividends paid by
the Company. In addition, if Junior Subordinated Debt Securities are issued to
a DLJ Trust in connection with the issuance of Trust Securities by such DLJ
Trust, for so long as the Preferred Securities issued by the applicable DLJ
Trust remain outstanding, the Company has agreed (i) to remain the sole direct
or indirect owner of all of the outstanding Common Securities issued by the
applicable DLJ Trust and not to cause or permit the Common Securities to be
transferred except to the extent permitted by the related Declaration;
provided that any permitted successor of the Company under the Indenture may
succeed to the Company's ownership of the Common Securities issued by the
applicable DLJ Trust, (ii) to comply fully with all of its obligations and
agreements contained in the related Declaration and (iii) not to take any
action which would cause the applicable DLJ Trust to cease to be treated as a
grantor trust for United States Federal income tax purposes, except in
connection with a distribution of Junior Subordinated Debt Securities.
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SUBORDINATION
The Indenture provides that the Junior Subordinated Debt Securities are
subordinate and junior in right of payment to all Senior Indebtedness of the
Company. In the event (a) of any insolvency or bankruptcy proceedings, any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or its property or any proceeding for voluntary
liquidation, dissolution or other winding up of the Company or any execution
sale, or (b) that Junior Subordinated Debt Securities of any series are
declared due and payable before their expressed maturity because of the
occurrence of an Indenture Event of Default pursuant to Section 6.01 of the
Indenture (under circumstances other than as set forth in clause (a) above),
then the holders of all Senior Indebtedness shall first be entitled to receive
payment of the full amount due thereon in money, before the holders of any of
the Junior Subordinated Debt Securities are entitled to receive payment on
account of the principal of, or interest, on the indebtedness evidenced by
such Junior Subordinated Debt Securities. In the event and during the
continuation of any default in payment of any Senior Indebtedness or if any
event of default shall exist under any Senior Indebtedness, as "event of
default" is defined therein or in the agreement under which the same is
outstanding, no payment of the principal, or premium, if any, or interest, on
the Junior Subordinated Debt Securities shall be made. (Section 14.02) If this
Prospectus is being delivered in connection with a series of Junior
Subordinated Debt Securities, the accompanying Prospectus Supplement will set
forth the approximate amount of Senior Indebtedness outstanding as of the end
of the most recent fiscal quarter.
The term "Senior Indebtedness" shall mean the principal of and premium, if
any, and interest on (a) all indebtedness of the Company, whether outstanding
on the date of the Indenture or thereafter created, (i) for money borrowed by
the Company (including, without limitation, indebtedness issued or to be
issued pursuant to the Indenture dated as of , 1996 between DLJ and The
Bank of New York as Trustee), (ii) for money borrowed by, or obligations of,
others and either assumed or guaranteed, directly or indirectly, by the Company,
(iii) in respect of letters of credit and acceptances issued or made by banks,
or (iv) constituting purchase money indebtedness, or indebtedness secured by
property included in the property, plant and equipment accounts of the Company
at the time of the acquisition of such property by the Company for the payment
of which the Company is directly liable, and (b) all deferrals, renewals,
extensions and refundings of, and amendments, modifications and supplements
to, any such indebtedness. As used in the preceding sentence the term
"purchase money indebtedness" means indebtedness evidenced by a note,
debenture, bond or other instrument (whether or not secured by any lien or
other security interest) issued or assumed as all or a part of the
consideration for the acquisition of property, whether by purchase, merger,
consolidation or otherwise, unless by its terms such indebtedness is
subordinate to other indebtedness of the Company. Notwithstanding anything to
the contrary in the Indenture or the Junior Subordinated Debt Securities,
Senior Indebtedness shall not include (i) any indebtedness of the Company
which, by its terms or the terms of the instrument creating or evidencing it,
is subordinate in right of payment to or pari passu with the Junior
Subordinated Debt Securities, as the case may be, and in particular, the
Junior Subordinated Debt Securities shall rank pari passu with respect to all
other debt securities and guarantees in respect thereof issued to any other
trusts, partnerships or other entity affiliated with the Company which is a
financing vehicle of the Company in connection with the issuance of preferred
securities by such financing vehicle, or (ii) any indebtedness of the Company
to a subsidiary of the Company. (Section 1.01) The Subordinated Indenture does
not contain any limitation on the amount of Senior Indebtedness that can be
incurred by the Company.
INDENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Indenture Event
of Default" with respect to each series of Junior Subordinated Debt
Securities:
(a) failure for 30 days to pay interest on the Junior Subordinated Debt
Securities of such series when due; provided that a valid extension of the
interest payment period by the Company shall not constitute a default in
the payment of interest for this purpose;
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(b) failure to pay principal of or premium, if any, on the Junior
Subordinated Debt Securities of such series when due whether at maturity,
upon redemption, by declaration or otherwise;
(c) failure to observe or perform any other covenant contained in the
Indenture with respect to such series for 90 days after written notice to
the Company from the Indenture Trustee or the holders of at least 25% in
principal amount of the outstanding Junior Subordinated Debt Securities of
such series; or
(d) certain events in bankruptcy, insolvency or reorganization of the
Company.
In each and every such case, unless the principal of all the Junior
Subordinated Debt Securities of that series shall have already become due and
payable, either the Indenture Trustee or the holders of not less than 25% in
aggregate principal amount of the Junior Subordinated Debt Securities of that
series then outstanding, by notice in writing to the Company (and to the
Indenture Trustee if given by such holders), may declare the principal of all
the Junior Subordinated Debt Securities of that series to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. (Section 6.01)
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities of that series have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee. (Section 6.06) The Indenture Trustee or
the holders of not less than 25% in aggregate outstanding principal amount of
the Junior Subordinated Debt Securities of that series may declare the
principal due and payable immediately upon an Indenture Event of Default with
respect to such series, but the holders of a majority in aggregate outstanding
principal amount of Junior Subordinated Debt Securities of such series may
annul such declaration and waive the default if the default has been cured and
a sum sufficient to pay all matured installments of interest and principal
otherwise than by acceleration and any premium has been deposited with the
Indenture Trustee. (Sections 6.01 and 6.06)
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities of that series may, on behalf of the
holders of all the Junior Subordinated Debt Securities of that series, waive
any past default, except a default in the payment of principal, premium, if
any, or interest (unless such default has been cured and a sum sufficient to
pay all matured installments of interest and principal otherwise than by
acceleration and any premium has been deposited with the Indenture Trustee) or
a call for redemption of Junior Subordinated Debt Securities. (Section 6.06)
The Company is required to file annually with the Indenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants under the Indenture. (Section 5.03)
If Junior Subordinated Debt Securities are issued to a DLJ Trust in
connection with the issuance of Trust Securities of such DLJ Trust, then under
the applicable Declaration an Indenture Event of Default with respect to such
series of Junior Subordinated Debt Securities will constitute a Declaration
Event of Default.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Indenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the outstanding Junior Subordinated Debt Securities of
each series affected, to modify the Indenture or any supplemental indenture
affecting the rights of the holders of such Junior Subordinated Debt
Securities; provided that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Debt Security affected thereby,
(i) extend the fixed maturity of any Junior Subordinated Debt Securities of
any series, reduce the principal amount thereof, reduce the rate or extend the
time of payment of interest thereon, reduce any premium payable upon the
redemption thereof, without the consent of the holder of each Junior
Subordinated Debt Security so affected or (ii) reduce the percentage of Junior
Subordinated Debt Securities, the holders of which are required to consent to
any such modification, without the consent of the holders of each Junior
Subordinated Debt Security then outstanding and affected thereby. (Section
9.02)
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BOOK-ENTRY AND SETTLEMENT
If any Junior Subordinated Debt Securities of a series are represented by
one or more global securities (each, a "Global Security"), the applicable
Prospectus Supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such Global Security may exchange such
interests for Junior Subordinated Debt Securities of such series and of like
tenor and principal amount in any authorized form and denomination. Principal
of and any premium and interest on a Global Security will be payable in the
manner described in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Junior Subordinated Debt Securities to be represented
by a Global Security will be described in the applicable Prospectus
Supplement.
CONSOLIDATION, MERGER AND SALE
The Indenture will provide that the Company may not consolidate with or
merge into any other person or transfer or lease its properties and assets
substantially as an entirety to any person and may not permit any person to
merge into or consolidate with the Company unless (i) either the Company will
be the resulting or surviving entity or any successor or purchaser is a
corporation organized under the laws of the United States of America, any
State or the District of Columbia, and any such successor or purchaser
expressly assumes the Company's obligations under the Indenture and (ii)
immediately after giving effect to the transaction no Event of Default shall
have occurred and be continuing. (Section 10.01)
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, the Company will be discharged from any
and all obligations in respect of the Junior Subordinated Debt Securities of a
series (except in each case for certain obligations to register the transfer
or exchange of such Junior Subordinated Debt Securities, replace stolen, lost
or mutilated Junior Subordinated Debt Securities of that series, maintain
paying agencies and hold moneys for payment in trust) if (i) the Company
irrevocably deposits with the Indenture Trustee cash or U.S. Government
Obligations, as trust funds in an amount certified to be sufficient to pay at
maturity (or upon redemption) the principal of, premium, if any, and interest
on all outstanding Junior Subordinated Debt Securities of such series; (ii)
such deposit will not result in a breach or violation of, or constitute a
default under, any agreement or instrument to which the Company is a party or
by which it is bound; (iii) the Company delivers to the Indenture Trustee an
opinion of counsel to the effect that the holders of the Junior Subordinated
Debt Securities of such series will not recognize income, gain or loss for
United States Federal income tax purposes as a result of such defeasance and
that defeasance will not otherwise alter holders' United States Federal income
tax treatment of principal, premium and interest payments on such Junior
Subordinated Debt Securities of such series (such opinion must be based on a
ruling of the Internal Revenue Service or a change in United States Federal
income tax law occurring after the date of such Indenture, since such a result
would not occur under current tax law); (iv) the Company has delivered to the
Indenture Trustee an Officer's Certificate and an opinion of counsel, each
stating that all conditions precedent provided for relating to the defeasance
contemplated by such provision have been complied with; and (v) no event or
condition shall exist that, pursuant to the subordination provisions
applicable to such series, would prevent the Company from making payments of
principal of, premium, if any, and interest on the Junior Subordinated Debt
Securities of such series at the date of the irrevocable deposit referred to
above. (Section 11.01)
GOVERNING LAW
The Indenture and the Junior Subordinated Debt Securities will be governed
by the laws of the State of New York. (Section 13.05)
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default,
shall exercise the same degree of care as a prudent individual
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would exercise in the conduct of his or her own affairs. (Section 7.01)
Subject to such provision, the Indenture 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 Debt Securities, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities that
might be incurred thereby. (Section 7.02) The Indenture 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 Trustee reasonably believes
that repayment or adequate indemnity is not reasonably assured to it. (Section
7.01)
The Company and its subsidiaries maintain ordinary banking and trust
relationships with The Bank of New York and its affiliates.
MISCELLANEOUS
The Company will have the right at all times to assign any of its rights or
obligations under the Indenture to a direct or indirect wholly-owned
subsidiary of the Company; provided that, in the event of any such assignment,
the Company will remain jointly and severally liable for all such obligations.
Subject to the foregoing, the Indenture will be binding upon and inure to the
benefit of the parties thereto and their respective successors and assigns.
The Indenture provides that it may not otherwise be assigned by the parties
thereto other than by the Company to a successor or purchaser pursuant to a
consolidation, merger or sale permitted by the Indenture.
(Section 13.11)
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PLAN OF DISTRIBUTION
The Company may sell any series of Junior Subordinated Debt Securities and
the DLJ Trusts may sell the Preferred Securities being offered hereby directly
or through agents, underwriters or dealers.
Offers to purchase Offered Securities may be solicited by agents designated
by the Company from time to time. Any such agent involved in the offer or sale
of the Offered Securities will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment. Any such
agent may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Offered Securities so offered and sold.
If an underwriter or underwriters are utilized in the sale of Offered
Securities, the Company will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached,
and the names of the specific managing underwriter or underwriters, as well as
any other underwriters, and the terms of the transactions, including
compensation of the underwriters and dealers, if any, will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales
of Offered Securities.
If a dealer is utilized in the sale of Offered Securities, the Company will
sell such Offered Securities to the dealer, as principal. The dealer may then
resell such Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale. The name of the dealer and
the terms of the transactions will be set forth in the Prospectus Supplement
relating thereto.
Offers to purchase Offered Securities may be solicited directly by the
Company and sales thereof may be made by the Company directly to institutional
investors or others. The terms of any such sales will be described in the
Prospectus Supplement relating thereto.
Agents, underwriters and dealers may be entitled under agreements which may
be entered into with the Company, to indemnification by the Company, against
certain liabilities, including liabilities under the 1933 Act, and any such
agents, underwriters or dealers, or their affiliates may be customers of,
engage in transactions with or perform services for the Company, in the
ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutions to purchase
Offered Securities from the Company at the public offering price set forth in
the Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on the date stated in the Prospectus
Supplement. Such Contracts will be subject to only those conditions set forth
in the Prospectus Supplement. A commission indicated in the Prospectus
Supplement will be paid to underwriters and agents soliciting purchases of
Offered Securities pursuant to any such Contracts accepted by the Company.
This Prospectus, together with the Prospectus Supplement, may also be used
by DLJSC in connection with offers and sales of Offered Securities related to
market-making transactions by and through DLJSC, at negotiated prices related
to prevailing market prices at the time of sale or otherwise. DLJSC may act as
principal or agent in such transactions.
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LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, certain
matters of Delaware law relating to the validity of the Preferred Securities
will be passed upon for the DLJ Trusts by Richards, Layton & Finger,
Wilmington, special Delaware counsel to the DLJ Trusts. The validity of the
Preferred Securities Guarantees and the Junior Subordinated Debt Securities
and certain other matters will be passed upon for the DLJ Trusts and the
Company by Michael A. Boyd, Senior Vice President and General Counsel to the
Company and Davis Polk & Wardwell. Mr. Boyd owns 22,466 restricted stock units
of the Company and holds options to purchase 39,772 shares of Common Stock.
Davis Polk & Wardwell from time to time provides legal services to the Company
and its subsidiaries.
EXPERTS
The consolidated financial statements and financial statement schedule of
the Company as of December 31, 1995 and 1994 and for each of the years in the
three-year period ended December 31, 1995 have been incorporated by reference
herein and in the Registration Statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated
herein by reference, and upon the authority of said firm as experts in
accounting and auditing.
21
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, IN CONNECTION WITH ANY OFFERING
CONTEMPLATED HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE DLJ
TRUSTS, ANY UNDERWRITER, AGENT OR DEALER. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF.
NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES 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 ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
PAGE
----
Available Information ...................... 2
Incorporation of Certain Information by
Reference ................................. 2
Use of Proceeds ............................ 3
Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and
Preferred Stock Dividends ................. 3
The Company ................................ 4
The DLJ Trusts ............................. 6
Description of the Preferred Securities ... 10
Description of the Preferred Securities
Guarantees ................................ 11
Description of the Junior Subordinated Debt
Securities ................................ 14
Plan of Distribution ....................... 20
Legal Matters .............................. 21
Experts .................................... 21
DONALDSON, LUFKIN &
JENRETTE, INC.
JUNIOR SUBORDINATED
DEBT SECURITIES
DLJ CAPITAL TRUST I
DLJ CAPITAL TRUST II
DLJ CAPITAL TRUST III
DLJ CAPITAL TRUST IV
PREFERRED SECURITIES GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
DONALDSON, LUFKIN & JENRETTE, INC.
PROSPECTUS
, 1996
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to theses securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not consitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
ALTERNATE TO DEBT SECURITIES AND PREFERRED STOCK PROSPECTUS
SUBJECT TO COMPLETION, DATED JULY 3, 1996
PROSPECTUS
, 1996
$500,000,000
DONALDSON, LUFKIN & JENRETTE, INC.
DEBT SECURITIES AND PREFERRED STOCK
Donaldson, Lufkin & Jenrette, Inc. (the "Company") may from time to time
offer, together or separately, (i) senior or subordinated debt securities
(the "Debt Securities") or (ii) shares of its preferred stock, par value
$0.01 per share (the "Preferred Stock"). The Debt Securities and Preferred
Stock are collectively called the "Securities."
The Securities may be issued in one or more series or issuances in U.S.
dollars or in one or more foreign currencies, currency units or composite
currencies. By separate prospectus, the form of which is included in the
Registration Statement of which this Prospectus forms a part, four Delaware
statutory business trusts (the "Trusts"), which are wholly owned subsidiaries
of the Company, may from time to time severally offer preferred securities
guaranteed by the Company to the extent set forth therein and the Company may
offer from time to time junior subordinated debt securities either directly or
to a Trust. The aggregate initial public offering price of the securities to
be offered by this Prospectus and such other prospectus shall not exceed
$500,000,000 (or its equivalent in one or more foreign currencies, currency
units or composite currencies).
Specific terms of the securities in respect of which this Prospectus is
being delivered (the "Offered Securities") will be set forth in an
accompanying Prospectus Supplement (a "Prospectus Supplement"). The Prospectus
Supplement will set forth with regard to the particular Offered Securities,
without limitation, the following: (i) in the case of Debt Securities, the
ranking as senior or subordinated debt securities, the specific designation,
aggregate principal amount, authorized denomination, maturity, rate (which may
be fixed or variable) or method of calculation of interest and dates for
payment thereof, and any exchangeability, conversion, redemption, prepayment
or sinking fund provisions and any listing on a securities exchange and (ii)
in the case of Preferred Stock, the specific designation, number of shares,
purchase price and the rights, preferences and privileges thereof and any
qualifications or restrictions thereon (including dividends, liquidation
value, voting rights, terms for the redemption, conversion or exchange thereof
and any other specific terms of the Preferred Stock) and any listing on a
securities exchange. Unless otherwise indicated in the Prospectus Supplement,
the Company does not intend to list any of the Securities on a national
securities exchange.
The Senior Debt Securities, when issued, will be unsecured and will rank
equally with all other unsecured and unsubordinated indebtedness of the
Company.
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 COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Prospectus has been prepared for use by Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJSC") in connection with offers and sales of the
Offered Securities which may be made by it from time to time in market-making
transactions at negotiated prices relating to prevailing market prices at the
time of sale. The Company has been advised by DLJSC that it currently intends
to make a market in the Offered Securities; however, it is not obligated to do
so. Any such market-making may be discontinued at any time, and there is no
assurance as to the liquidity of, or trading market for, the Offered
Securities. DLJSC may act as principal or agent in such transactions. See
"Plan of Distribution." This Prospectus may not be used to consummate sales of
Offered Securities unless accompanied by a Prospectus Supplement.
1
<PAGE>
ALTERNATE TO DEBT SECURITIES AND PREFERRED STOCK PROSPECTUS
USE OF PROCEEDS
Donaldson, Lufkin & Jenrette, Inc. will not receive any proceeds from the
sale of the Offered Securities in any market-making transaction with which
this Prospectus may be delivered.
Alt-2
<PAGE>
ALTERNATE TO DEBT SECURITIES AND PREFERRED STOCK PROSPECTUS
PLAN OF DISTRIBUTION
This Prospectus has been prepared for use by DLJSC in connection with
offers and sales of the Offered Securities in market-making transactions at
negotiated prices related to prevailing market prices at the time of the sale.
DLJSC may act as principal or agent in such transactions. DLJSC has advised
the Company that it currently intends to make a market in the Offered
Securities, but it is not obligated to do so and may discontinue any such
market-making at any time without notice. Accordingly, no assurance can be
given as to the liquidity of, or the trading market for, the Offered
Securities.
Alt-3
<PAGE>
ALTERNATE TO DEBT SECURITIES AND PREFERRED STOCK PROSPECTUS
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, IN CONNECTION WITH ANY OFFERING
CONTEMPLATED HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY AGENT OR
DEALER. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF OR THEREOF. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS
SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES 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 ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
PAGE
-----
Available Information ...................... 2
Incorporation of Certain Information by
Reference ................................. 2
Use of Proceeds ............................ 3
Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and
Preferred Stock Dividends ................. 3
The Company ................................ 4
Description of Capital Stock ............... 6
Description of Debt Securities ............. 9
Plan of Distribution ....................... 22
Legal Matters .............................. 22
Experts .................................... 23
$500,000,000
DONALDSON, LUFKIN &
JENRETTE, INC.
DEBT SECURITIES
PREFERRED STOCK
PROSPECTUS
, 1996
Alt-4
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement is
declared effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
ALTERNATE TO JUNIOR SUBORDINATED DEBT SECURITIES, PREFERRED SECURITIES
AND RELATED GUARANTEES PROSPECTUS
SUBJECT TO COMPLETION, DATED JULY 3, 1996
PROSPECTUS
, 1996
DONALDSON, LUFKIN & JENRETTE, INC.
JUNIOR SUBORDINATED DEBT SECURITIES
DLJ CAPITAL TRUST I
DLJ CAPITAL TRUST II
DLJ CAPITAL TRUST III
DLJ CAPITAL TRUST IV
PREFERRED SECURITIES GUARANTEED TO THE EXTENT SET FORTH
HEREIN BY DONALDSON, LUFKIN & JENRETTE, INC.
Donaldson Lufkin & Jenrette, Inc. (the "Company") may from time to time
offer unsecured junior subordinated debt securities (the "Junior Subordinated
Debt Securities") consisting of debentures, notes or other evidences of
indebtedness in one or more series and in amounts, at prices and on terms to
be determined at or prior to the time of any such offering. The Junior
Subordinated Debt Securities when issued will be unsecured obligations of the
Company. The Company's obligations under the Junior Subordinated Debt
Securities will be subordinate and junior in right of payment to all Senior
Indebtedness (as defined herein) of the Company.
DLJ Capital Trust I, DLJ Capital Trust II, DLJ Capital Trust III and DLJ
Capital Trust IV (the "DLJ Trusts"), each a statutory business trust formed
under the laws of the State of Delaware, may offer and sell, from time to
time, preferred securities representing undivided beneficial interests in the
assets of the respective DLJ Trust ("Preferred Securities"). The payment of
periodic cash distributions ("distributions") with respect to Preferred
Securities of each of the DLJ Trusts out of moneys held by the Property
Trustee (as defined herein) of each of the DLJ Trusts, and payments on
liquidation of each DLJ Trust and on redemption of Preferred Securities of
such DLJ Trust, will be guaranteed by the Company as and to the extent
described herein (each such guarantee a "Preferred Securities Guarantee"). See
"Description of the Preferred Securities Guarantees." The Company's obligation
under each Preferred Securities Guarantee is an unsecured obligation of the
Company and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Company, including the Junior Subordinated Debt
Securities, except those made pari passu or subordinate by their terms, and
(ii) senior to all capital stock now or hereafter issued by the Company and to
any guarantee now or hereafter entered into by the Company in respect of any
of its capital stock. Junior Subordinated Debt Securities may be issued and
sold from time to time in one or more series by the Company to a DLJ Trust, or
a trustee of such trust, in connection with the investment of the proceeds
from the offering of Preferred Securities and Common Securities (as defined
herein) of such DLJ Trust. The Junior Subordinated Debt Securities purchased
by a DLJ Trust may be subsequently distributed pro rata to holders of
Preferred Securities and Common Securities in connection with the dissolution
of such DLJ Trust, upon the occurrence of certain events as may be described
in an accompanying Prospectus Supplement.
Specific terms of the Junior Subordinated Debt Securities or any series or
the Preferred Securities of any DLJ Trust in respect of which this Prospectus
is being delivered (the "Offered Securities") will be set forth in a
Prospectus Supplement with respect to such Offered Securities, which will
describe, without limitation and where applicable, the following: (i) in the
case of Junior Subordinated Debt Securities, the specific designation,
aggregate principal amount, authorized denomination, maturity, premium, if
any, redemption or sinking fund provisions, if any, interest rate (which may
be fixed or variable), if any, the time and method of calculating interest
payments, if any, dates on which premium, if any, and interests, if any, will
be payable, the right of the Company, if any, to defer payment of interest on
the Junior Subordinated Debt Securities and the maximum length of such
deferral period, the initial public offering price, and any listing on a
securities exchange and other specific terms of the offering; and (ii) in the
case of Preferred Securities, the specific designation, number of securities,
liquidation amount per security, initial public offering price, and any
listing on a securities exchange, distribution rate (or method of calculation
thereof), dates on which distributions shall be payable and dates from which
distributions shall accrue, voting rights (if any), terms for any conversion
or exchange into other securities, any redemption or sinking fund provisions,
any other rights, preferences, privileges, limitations or restrictions
relating to the Preferred Securities and the terms upon which the proceeds of
the sale of the Preferred Securities shall be used to purchase a specific
series of Junior Subordinated Debt Securities of the Company. Unless otherwise
indicated in the Prospectus Supplement, the Company does not intend to list
any of the securities on a national securities exchange.
Any Prospectus Supplement relating to any series of Offered Securities will
contain information concerning certain United States Federal income tax
considerations, if applicable, to the Offered Securities.
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 COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Prospectus has been prepared for use by Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJSC") in connection with offers and sales of the
Offered Securities which may be made by it from time to time in market-making
transactions at negotiated prices relating to prevailing market prices at the
time of sale. The Company has been advised by DLJSC that it currently intends
to make a market in the Offered Securities; however, it is not obligated to do
so. Any such market making may be discontinued at any time, and there is no
assurance as to the liquidity of, or trading market for, the Offered
Securities. DLJSC may act as principal or agent in such transactions. See
"Plan of Distribution." This Prospectus may not be used to consummate sales of
Offered Securities unless accompanied by a Prospectus Supplement.
Alt-5
<PAGE>
ALTERNATE TO JUNIOR SUBORDINATED DEBT SECURITIES, PREFERRED SECURITIES
AND RELATED GUARANTEES PROSPECTUS
USE OF PROCEEDS
Neither Donaldson, Lufkin & Jenrette, Inc. nor the DLJ Trusts will receive
any proceeds from the sale of the Offered Securities in any market making
transaction with which this Prospectus may be delivered.
Alt-6
<PAGE>
ALTERNATE TO JUNIOR SUBORDINATED DEBT SECURITIES, PREFERRED SECURITIES
AND RELATED GUARANTEES PROSPECTUS
PLAN OF DISTRIBUTION
This Prospectus has been prepared for use by DLJSC in connection with
offers and sales of the Offered Securities in market-making transactions at
negotiated prices related to prevailing market prices at the time of the sale.
DLJSC may act as principal or agent in such transactions. DLJSC has advised
the Company that it currently intends to make a market in the Offered
Securities, but it is not obligated to do so and may discontinue any such
market-making at any time without notice. Accordingly, no assurance can be
given as to the liquidity of, or the trading market for, the Offered
Securities.
Alt-7
<PAGE>
ALTERNATE TO JUNIOR SUBORDINATED DEBT SECURITIES, PREFERRED SECURITIES
AND RELATED GUARANTEES PROSPECTUS
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, IN CONNECTION WITH ANY OFFERING
CONTEMPLATED HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE DLJ
TRUSTS, ANY UNDERWRITER, AGENT OR DEALER. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF.
NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES 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 ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
PAGE
-----
Available Information ...................... 2
Incorporation of Certain Information by
Reference ................................. 2
Use of Proceeds ............................ 3
Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and
Preferred Stock Dividends ................. 3
The Company ................................ 4
The DLJ Trusts ............................. 6
Description of the Preferred Securities ... 10
Description of the Preferred Securities
Guarantees ................................ 11
Description of the Junior Subordinated Debt
Securities ................................ 14
Plan of Distribution ....................... 20
Legal Matters .............................. 21
Experts .................................... 21
DONALDSON, LUFKIN &
JENRETTE, INC.
JUNIOR SUBORDINATED
DEBT SECURITIES
DLJ CAPITAL TRUST I
DLJ CAPITAL TRUST II
DLJ CAPITAL TRUST III
DLJ CAPITAL TRUST IV
PREFERRED SECURITIES GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
DONALDSON, LUFKIN & JENRETTE, INC.
PROSPECTUS
, 1996
Alt-8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCES AND DISTRIBUTION
The following table sets forth the fees and expenses payable by the Company
in connection with the issuance and distribution of the securities other than
underwriting discounts and commissions. All of such expenses except the
Securities and Exchange Commission registration fee are estimated:
Securities and Exchange Commission registration fee $172,414
Blue Sky fees and expenses .......................... 15,000
Printing expense .................................... 100,000
Accounting fees and expenses ........................ *
Legal fees and expenses ............................. *
Rating agency fees .................................. *
Trustee's fees and expenses ......................... *
Miscellaneous ....................................... *
----------
Total ........................................... $ *
==========
* To be completed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to Section 102(b)(7) of the Delaware General Corporation
Law (the "DGCL"), which enables a corporation in its original certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty,
except (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) pursuant
to Section 174 of the DGCL (providing for liability of directors for the
unlawful payment of dividends or unlawful stock purchases or redemptions) or
(iv) for any transaction from which a director derived an improper personal
benefit.
Section 145 of the DGCL empowers the Company to indemnify, subject to the
standards set forth therein, any person in connection with any action, suit or
proceeding brought before or threatened by reason of the fact that the person
was a director, officer, employee or agent of such company, or is or was
serving as such with respect to another entity at the request of such company.
The DGCL also provides that the Company may purchase insurance on behalf of
any such director, officer, employee or agent.
The Company's Certificate of Incorporation provides in effect for the
indemnification by the Company of each director and officer of the Company to
the fullest extent permitted by applicable law.
ITEM 16. EXHIBITS
See index to exhibits at E-1.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby 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 the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if
II-1
<PAGE>
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
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that the undertakings set forth in paragraph (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrants 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 the registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to 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 the
registrant pursuant to the provisions described in Item 15 above or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the 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, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-2
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, Donaldson,
Lufkin & Jenrette, Inc. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, New York, on
the 3rd day of July, 1996.
DONALDSON, LUFKIN & JENRETTE, INC.
By:/s/ John S. Chalsty
-------------------------------------
John S. Chalsty
Chairman, Chief Executive Officer and
Director
The registrant and each person whose signature appears below constitutes
and appoints John S. Chalsty, Anthony F. Daddino and Thomas E. Siegler, and
any agent for service named in this registration statement and each of them,
his, her or its true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him, her or it and in his, her, or its
name, place and stead, in any and all capacities, to sign and file (i) any and
all amendments (including post-effective amendments) to this registration
statement, with all exhibits thereto, and other documents in connection
therewith, and (ii) a registration statement, and any and all amendments
thereto, relating to the offering covered hereby filed pursuant to Rule 462(b)
under the Securities Act of 1933, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he, she, or it might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
- ---------------------------- ---------------------------------
- ----------------
/s/ John S. Chalsty Chairman, Chief Executive July 3, 1996
- ----------------------------- Officer and Director
John S. Chalsty
/s/ Joe L. Roby President, Chief Operating July 3, 1996
- ----------------------------- Officer and Director
Joe L. Roby
/s/ Carl B. Menges Vice Chairman and Director July 3, 1996
- -----------------------------
Carl B. Menges
/s/ Anthony F. Daddino Executive Vice President, Chief July 3, 1996
- ----------------------------- Financial Officer and Director
Anthony F. Daddino
/s/ Richard S. Pechter Chairman, Financial Services July 3, 1996
- ----------------------------- Group and Director
Richard S. Pechter
/s/ Theodore P. Shen Chairman, Capital Markets Group July 3, 1996
- ----------------------------- and Director
Theodore P. Shen
II-3
<PAGE>
SIGNATURE TITLE DATE
/s/ Hamilton E. James Chairman, Banking Group and July 3, 1996
- ----------------------------- Director
Hamilton E. James
/s/ Michael M. Bendik Senior Vice President and Chief July 3, 1996
- ----------------------------- Accounting Officer
Michael M. Bendik
Director July 3, 1996
- -----------------------------
Claude Bebear
Director July 3, 1996
- -----------------------------
Henri de Castries
/s/ Jerry M. de St. Paer Director July 3, 1996
- -----------------------------
Jerry M. de St. Paer
/s/ Kevin C. Dolan Director July 3, 1996
- -----------------------------
Kevin C. Dolan
/s/ Louis Harris Director July 3, 1996
- -----------------------------
Louis Harris
/s/ Henri G. Hottinguer Director July 3, 1996
- -----------------------------
Henri G. Hottinguer
Director July 3, 1996
- -----------------------------
W. Edwin Jarmain
/s/ Francis Jungers Director July 3, 1996
- -----------------------------
Francis Jungers
/s/ Joseph J. Melone Director July 3, 1996
- -----------------------------
Joseph J. Melone
/s/ W. J. Sanders Director July 3, 1996
- -----------------------------
W. J. Sanders
/s/ John C. West Director July 3, 1996
- -----------------------------
John C. West
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, DLJ Capital
Trust I, DLJ Capital Trust II, DLJ Capital Trust III and DLJ Capital Trust IV
each certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, New York, on the 3rd day of July, 1996.
DLJ CAPITAL TRUST I
By: Donaldson, Lufkin & Jenrette,
Inc., as Sponsor
By: /s/ Anthony F. Daddino
-------------------------------------
-------------------------------------
Name: Anthony F. Daddino
Title: Executive Vice President,
Chief Financial Officer and Director
DLJ CAPITAL TRUST II
By: Donaldson, Lufkin & Jenrette,
Inc., as Sponsor
By: /s/ Anthony F. Daddino
-------------------------------------
-------------------------------------
Name: Anthony F. Daddino
Title: Executive Vice President,
Chief Financial Officer and Director
DLJ CAPITAL TRUST III
By: Donaldson, Lufkin & Jenrette,
Inc., as Sponsor
By: /s/ Anthony F. Daddino
-------------------------------------
-------------------------------------
Name: Anthony F. Daddino
Title: Executive Vice President,
Chief Financial Officer and Director
DLJ CAPITAL TRUST IV
By: Donaldson, Lufkin & Jenrette,
Inc., as Sponsor
By: /s/ Anthony F. Daddino
-------------------------------------
-------------------------------------
Name: Anthony F. Daddino
Title: Executive Vice President,
Chief Financial Officer and Director
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGE
- ----------- ----------------------------------------------------------------------------- ----------------
<S> <C> <C>
1.1 Form of Underwriting Agreement relating to the Debt Securities+ .............
1.2 Form of Underwriting Agreement relating to the Preferred Stock+ .............
1.3 Form of Underwriting Agreement relating to the Preferred Securities+ ........
3.1 Restated Certificate of Incorporation of Registrant* .........................
3.2 By-laws of the Registrant* ...................................................
4.1 Senior Debt Indenture dated as of October 25, 1995 between the Company and
The Bank of New York, as Trustee** .........................................
4.2 Form of Senior Debt Securities++ .............................................
4.3 Form of Subordinated Debt Indenture dated as of , 1996 between the Company
and The Bank of New York as Trustee+ .......................................
4.4 Form of Subordinated Debt Securities+ ........................................
4.5 Form of Junior Subordinated Debt Indenture dated as of , 1996 between the
Company and The Bank of New York as Trustee+ ...............................
4.6 Declaration of Trust of DLJ Capital Trust I ..................................
4.7 Certificate of Trust of DLJ Capital Trust I ..................................
4.8 Declaration of Trust of DLJ Capital Trust II .................................
4.9 Certificate of Trust of DLJ Capital Trust II .................................
4.10 Declaration of Trust of DLJ Capital Trust III ................................
4.11 Certificate of Trust of DLJ Capital Trust III ................................
4.12 Declaration of Trust of DLJ Capital Trust IV .................................
4.13 Certificate of Trust of DLJ Capital Trust IV .................................
4.14 Form of Amended and Restated Declaration of Trust for each of DLJ Capital
Trust I, II, III, and IV+ ..................................................
4.15 Form of Preferred Security (included in Exhibit 4.15)+ .......................
4.16 Form of Supplemental Indenture to be used in connection with issuance of
Junior Subordinated Debt Securities and Preferred Securities+ ..............
4.17 Form of Junior Subordinated Debt Security (included in Exhibit 4.16) ........
4.18 Form of Guarantee with respect to Preferred Securities+ ......................
5.1 Opinion of Davis Polk & Wardwell+ ............................................
5.2 Opinion of Richards, Layton & Finger+ ........................................
12.1 Computation of ratio of earnings to fixed charges and ratio of earnings to
combined fixed charges and preferred stock dividends+ ......................
23.1 Consent of Davis Polk & Wardwell (included in Exhibit 5.1) ...................
23.2 Consent of Richards, Layton & Finger (included in Exhibit 5.2) ..............
23.3 Consent of KPMG Peat Marwick LLP .............................................
24.1 Powers of Attorney for the Company (see signature page) ......................
24.2 Powers of Attorneys for Donaldson, Lufkin & Jenrette, Inc., as sponsor, to
sign the Registration Statement on behalf of DLJ Capital Trust
I, II, III and IV (included in Exhibits 4.6, 4.8, 4.10 and
4.12, respectively) ........
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Bank of New York, as Trustee, under the Senior Indenture*** .........
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Bank of New York, as Trustee, under the Subordinated Indenture+ .....
E-1
<PAGE>
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGE
- ----------- ----------------------------------------------------------------------------- ----------------
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Bank of New York, as Trustee, under the Junior Subordinated
Indenture+ .................................................................
25.4 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Bank of New York, as Trustee, with respect to the Amended and
Restated Declaration of Trust of DLJ Capital Trust I+ ......................
25.5 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Bank of New York, as Trustee, with respect to the Amended and
Restated Declaration of Trust of DLJ Capital Trust II+ .....................
25.6 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Bank of New York, as Trustee, with respect to the Amended and
Restated Declaration of Trust of DLJ Capital Trust III+ ....................
25.7 Statement of Eligibility under the Trust Indenture Act of 1939, as amended of
The Bank of New York, as Trustee, with respect to the Amended and Restated
Declaration of Trust of DLJ Capital Trust IV+ ..............................
25.8 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Bank of New York, as Trustee, under the Preferred Securities
Guarantee of the Company with respect to the Preferred Securities of DLJ
Capital Trust I+ ...........................................................
25.9 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Bank of New York, as Trustee, under the Preferred Securities
Guarantee of the Company with respect to the Preferred Securities of DLJ
Capital Trust II+ ..........................................................
25.10 Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Bank of New York, as Trustee, under the Preferred Securities
Guarantee of the Company with respect to the Preferred Securities of DLJ
Capital Trust III+ .........................................................
25.11 Statement of Eligibility under the Trust Indenture Act of 1939, as amended of
The Bank of New York, as Trustee under the Preferred Securities Guarantee of
the Company with respect to the Preferred Securities of DLJ Capital Trust
IV+ ........................................................................
</TABLE>
- ------------
+ To be filed by amendment.
++ Incorporated by reference to the corresponding exhibit to Donaldson,
Lufkin & Jenrette, Inc.'s Registration Statement on Form S-3
(Registration No. 33-80771).
* Incorporated by reference to the corresponding exhibit to Donaldson,
Lufkin & Jenrette, Inc.'s Registration Statement or Form S-1
(Registration No. 33-96276).
** Incorporated by reference to exhibit 4.1 to the Donaldson, Lufkin &
Jenrette, Inc.'s Quarterly Report on Form 10-Q, filed on December 8,
1995.
*** Incorporated by reference to the corresponding exhibit to Donaldson,
Lufkin & Jenrette, Inc.'s Registration Statement on Form S-1
(Registration No. 33-96768).
E-2
DECLARATION OF TRUST, dated as of June 14, 1996, between
Donaldson, Lufkin & Jenrette, Inc., a Delaware corporation, as Sponsor, and
The Bank of New York, a New York banking corporation, not in its individual
capacity but solely as trustee (the "Property Trustee"), The Bank of New York
(Delaware), a Delaware banking corporation, not in its individual capacity but
solely as trustee (the "Delaware Trustee"), and Anthony F. Daddino, Charles J.
Hendrickson, and Thomas E. Siegler, each not in his individual capacity but
solely as trustee (the Property Trustee, Delaware Trustee and each such
individual as trustee, collectively the "Trustees"). The Sponsor and the
Trustees hereby agree as follows:
1. The trust created hereby shall be known as "DLJ Capital Trust
I", in which name the Trustees, or the Sponsor to the extent provided herein,
may conduct the business of the Trust, make and execute contracts, and sue and
be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over
to the Trustees the sum of $10. The Trustees hereby acknowledge receipt of
such amount in trust from the Sponsor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Sponsor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. Code [section] 3801 et seq. (the
"Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Secretary of State of the
State of Delaware in the form attached hereto. The Trust is hereby established
by the Sponsors and the Trustees for the purposes of (i) issuing preferred
securities representing undivided beneficial interests in the assets of the
Trust ("Preferred Securities") in exchange for cash and investing the proceeds
thereof in junior subordinated debentures of the Sponsor, (ii) issuing and
selling common securities representing undivided beneficial interest in the
assets of the Trust to the Sponsor in exchange for cash and investing the
proceeds thereof in additional junior subordinated debentures of the Sponsor
and, (iii) engaging in such other activities as are necessary, convenient or
incidental thereto.
3. The Sponsor and the Trustees will enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act Registration
Statement referred
<PAGE>
to below, to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Declaration of Trust, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. The Sponsor and the Trustees hereby authorize and direct the
Sponsor, as the sponsor of the Trust, (i) to prepare and file with the
Securities and Exchange Commission (the "Commission") and execute, in each
case on behalf of the Trust, (a) a Registration Statement on Form S-3 (the
"1933 Act Registration Statement") including any pre-effective or
post-effective amendments to such Registration Statement, relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and (b) a Registration Statement on Form 8-A (the
"1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the
Preferred Securities of the Trust under Section 12(b) of the Securities
Exchange Act of 1934, as amended; (ii) to prepare and file with the New York
Stock Exchange and execute on behalf of the Trust a listing application and
all other applications, statements, certificates, agreements and other
instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on the New York Stock Exchange; (iii) to prepare and
file and execute on behalf of the Trust such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of process
and other papers and documents as shall be necessary or desirable to register
the Preferred Securities under the securities or "Blue Sky" laws of such
jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or
desirable and (iv) to negotiate the terms of and execute on behalf of the
Trust an underwriting agreement among the Trust, the Sponsor and any
underwriter, dealer or agent relating to the Preferred Securities,
substantially in the form included as Exhibit 1.3 to the 1933 Act Registration
Statement. In the event that any filing referred to in clauses (i)-(iii) above
is required by the rules and regulations of the Commission, the New York Stock
Exchange or state securities or blue sky laws, to be executed on behalf of the
Trust by the Trustees, Anthony F. Daddino, Charles J. Hendrickson and Thomas
E. Siegler, in their capacities as Trustees of the Trust, are hereby
authorized and directed to join in any such filing and to execute on behalf of
the Trust any and all of the
2
<PAGE>
foregoing, it being understood that The Bank of New York and The Bank of New
York (Delaware), in their capacities as Trustees of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, the
New York Stock Exchange or state securities or blue sky laws. In connection
with all of the foregoing, the Sponsor and each Trustee, solely in its
capacity as Trustee of the Trust, hereby constitutes and appoints John S.
Chalsty, Anthony F. Daddino, Michael A. Boyd, Charles J. Hendrickson and
Thomas E. Siegler, and each of them, his, her or its, as the case may be, true
and lawful attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file
(i) any and all amendments (including post-effective amendments) to the 1933
Act Registration Statement and the 1934 Act Registration Statement with all
exhibits thereto, and other documents in connection therewith, and (ii) a
registration statement, and any and all amendments thereto, relating thereto
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended
with the Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and
purposes as the Sponsor or such Trustee might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, shall do or cause to
be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees initially shall be five (5) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor which may increase
or decrease the number of Trustees; provided, however, that the number of
Trustees shall in no event be less than five (5); and provided, further that
to the extent required by the Business Trust Act, one Trustee shall either be
a natural person who is a resident of the State of Delaware or, if not a
natural person, an entity which has its principal place of business in the
State of Delaware and meets other requirements imposed by applicable law.
Subject to the foregoing, the Sponsor is entitled to appoint or remove without
cause any Trustee at any time. The Trustees may resign upon thirty days prior
notice to the Sponsor.
3
<PAGE>
7. The Trust shall terminate before the issuance of any
Preferred Securities at the election of the Sponsor.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration of Trust to be duly executed as of the day and year first above
written.
Donaldson, Lufkin & Jenrette,
Inc., as Sponsor
By: /s/ Anthony F. Daddino
--------------------------------
Name: Anthony F. Daddino
Title: Executive Vice President,
Chief Financial Officer
and Director
The Bank of New York,
not in its individual capacity
but solely as Property Trustee
By: /s/ Nancy B. Gill
--------------------------------
Name: Nancy B. Gill
Title: Assistant Treasurer
The Bank of New York
(Delaware),
not in its individual capacity
but solely as Delaware Trustee
By: /s/ Catherine Marsh
--------------------------------
Name: Catherine Marsh
Title: President & COO
/s/ Anthony F. Daddino
-----------------------------------
Anthony F. Daddino,
not in his individual capacity
but solely as Trustee
/s/ Charles J. Hendrickson
-----------------------------------
Charles J. Hendrickson,
not in his individual capacity
but solely as Trustee
/s/ Thomas E. Siegler
-----------------------------------
Thomas E. Siegler,
not in his individual capacity
but solely as Trustee
5
CERTIFICATE OF TRUST
OF
DLJ CAPITAL TRUST I
THIS Certificate of Trust of DLJ Capital Trust I (the "Trust"),
dated as of June 14, 1996, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. Code [section] 3801 et seq.).
1. Name. The name of the business trust being formed hereby
is DLJ Capital Trust I.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is The Bank of New York (Delaware), a Delaware banking corporation,
White Clay Center, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be
effective as of its filing.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the sole trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
The Bank of New York (Delaware),
as Delaware Trustee
By: /s/ Catherine Marsh
---------------------------
Name: Catherine Marsh
Title: President & COO
The Bank of New York,
as Property Trustee
By: /s/ Nancy B. Gill
---------------------------
Name: Nancy B. Gill
Title: Assistant Treasurer
/s/ Anthony F. Daddino
------------------------------
Anthony F. Daddino,
as Trustee
/s/ Charles J. Hendrickson
------------------------------
Charles J. Hendrickson,
as Trustee
/s/ Thomas E. Siegler
------------------------------
Thomas E. Siegler,
as Trustee
DECLARATION OF TRUST, dated as of June 14, 1996, between
Donaldson, Lufkin & Jenrette, Inc., a Delaware corporation, as Sponsor, and
The Bank of New York, a New York banking corporation, not in its individual
capacity but solely as trustee (the "Property Trustee"), The Bank of New York
(Delaware), a Delaware banking corporation, not in its individual capacity but
solely as trustee (the "Delaware Trustee"), and Anthony F. Daddino, Charles J.
Hendrickson, and Thomas E. Siegler, each not in his individual capacity but
solely as trustee (the Property Trustee, Delaware Trustee and each such
individual as trustee, collectively the "Trustees"). The Sponsor and the
Trustees hereby agree as follows:
1. The trust created hereby shall be known as "DLJ Capital Trust
II", in which name the Trustees, or the Sponsor to the extent provided herein,
may conduct the business of the Trust, make and execute contracts, and sue and
be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over
to the Trustees the sum of $10. The Trustees hereby acknowledge receipt of
such amount in trust from the Sponsor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Sponsor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. Code [section] 3801 et seq. (the
"Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Secretary of State of the
State of Delaware in the form attached hereto. The Trust is hereby established
by the Sponsors and the Trustees for the purposes of (i) issuing preferred
securities representing undivided beneficial interests in the assets of the
Trust ("Preferred Securities") in exchange for cash and investing the proceeds
thereof in junior subordinated debentures of the Sponsor, (ii) issuing and
selling common securities representing undivided beneficial interest in the
assets of the Trust to the Sponsor in exchange for cash and investing the
proceeds thereof in additional junior subordinated debentures of the Sponsor
and, (iii) engaging in such other activities as are necessary, convenient or
incidental thereto.
3. The Sponsor and the Trustees will enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act Registration
Statement referred
<PAGE>
to below, to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Declaration of Trust, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. The Sponsor and the Trustees hereby authorize and direct the
Sponsor, as the sponsor of the Trust, (i) to prepare and file with the
Securities and Exchange Commission (the "Commission") and execute, in each
case on behalf of the Trust, (a) a Registration Statement on Form S-3 (the
"1933 Act Registration Statement") including any pre-effective or
post-effective amendments to such Registration Statement, relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and (b) a Registration Statement on Form 8-A (the
"1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the
Preferred Securities of the Trust under Section 12(b) of the Securities
Exchange Act of 1934, as amended; (ii) to prepare and file with the New York
Stock Exchange and execute on behalf of the Trust a listing application and
all other applications, statements, certificates, agreements and other
instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on the New York Stock Exchange; (iii) to prepare and
file and execute on behalf of the Trust such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of process
and other papers and documents as shall be necessary or desirable to register
the Preferred Securities under the securities or "Blue Sky" laws of such
jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or
desirable and (iv) to negotiate the terms of and execute on behalf of the
Trust an underwriting agreement among the Trust, the Sponsor and any
underwriter, dealer or agent relating to the Preferred Securities,
substantially in the form included as Exhibit 1.3 to the 1933 Act Registration
Statement. In the event that any filing referred to in clauses (i)-(iii) above
is required by the rules and regulations of the Commission, the New York Stock
Exchange or state securities or blue sky laws, to be executed on behalf of the
Trust by the Trustees, Anthony F. Daddino, Charles J. Hendrickson and Thomas
E. Siegler, in their capacities as Trustees of the Trust, are hereby
authorized and directed to join in any such filing and to execute on behalf of
the Trust any and all of the
2
<PAGE>
foregoing, it being understood that The Bank of New York and The Bank of New
York (Delaware), in their capacities as Trustees of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, the
New York Stock Exchange or state securities or blue sky laws. In connection
with all of the foregoing, the Sponsor and each Trustee, solely in its
capacity as Trustee of the Trust, hereby constitutes and appoints John S.
Chalsty, Anthony F. Daddino, Michael A. Boyd, Charles J. Hendrickson and
Thomas E. Siegler, and each of them, his, her or its, as the case may be, true
and lawful attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file
(i) any and all amendments (including post-effective amendments) to the 1933
Act Registration Statement and the 1934 Act Registration Statement with all
exhibits thereto, and other documents in connection therewith, and (ii) a
registration statement, and any and all amendments thereto, relating thereto
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended
with the Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and
purposes as the Sponsor or such Trustee might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, shall do or cause to
be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees initially shall be five (5) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor which may increase
or decrease the number of Trustees; provided, however, that the number of
Trustees shall in no event be less than five (5); and provided, further that
to the extent required by the Business Trust Act, one Trustee shall either be
a natural person who is a resident of the State of Delaware or, if not a
natural person, an entity which has its principal place of business in the
State of Delaware and meets other requirements imposed by applicable law.
Subject to the foregoing, the Sponsor is entitled to appoint or remove without
cause any Trustee at any time. The Trustees may resign upon thirty days prior
notice to the Sponsor.
3
<PAGE>
7. The Trust shall terminate before the issuance of any
Preferred Securities at the election of the Sponsor.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration of Trust to be duly executed as of the day and year first above
written.
Donaldson, Lufkin & Jenrette,
Inc., as Sponsor
By: /s/ Anthony F. Daddino
---------------------------
Name: Anthony F. Daddino
Title: Executive Vice President,
Chief Financial Officer and
Director
The Bank of New York,
not in its individual capacity
but solely as Property Trustee
By: /s/ Nancy B. Gill
---------------------------
Name: Nancy B. Gill
Title: Assistant Treasurer
The Bank of New York
(Delaware),
not in its individual capacity
but solely as Delaware Trustee
By: /s/ Catherine Marsh
---------------------------
Name: Catherine Marsh
Title: President & COO
/s/ Anthony F. Daddino
------------------------------
Anthony F. Daddino,
not in his individual capacity
but solely as Trustee
/s/ Charles J. Hendrickson
------------------------------
Charles J. Hendrickson,
not in his individual capacity
but solely as Trustee
/s/ Thomas E. Siegler
------------------------------
Thomas E. Siegler,
not in his individual capacity
but solely as Trustee
5
CERTIFICATE OF TRUST
OF
DLJ CAPITAL TRUST II
THIS Certificate of Trust of DLJ Capital Trust II (the "Trust"),
dated as of June 14, 1996, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. Code [section] 3801 et seq.).
1. Name. The name of the business trust being formed hereby is
DLJ Capital Trust II.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is The Bank of New York (Delaware), a Delaware banking corporation,
White Clay Center, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective
as of its filing.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the sole trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
The Bank of New York (Delaware),
as Delaware Trustee
By: /s/ Catherine Marsh
---------------------------
Name: Catherine Marsh
Title: President & COO
The Bank of New York,
as Property Trustee
By: /s/ Nancy B. Gill
---------------------------
Name: Nancy B. Gill
Title: Assistant Treasurer
/s/ Anthony F. Daddino
------------------------------
Anthony F. Daddino,
as Trustee
/s/ Charles J. Hendrickson
------------------------------
Charles J. Hendrickson,
as Trustee
/s/ Thomas E. Siegler
------------------------------
Thomas E. Siegler,
as Trustee
DECLARATION OF TRUST, dated as of June 14, 1996, between
Donaldson, Lufkin & Jenrette, Inc., a Delaware corporation, as Sponsor, and
The Bank of New York, a New York banking corporation, not in its individual
capacity but solely as trustee (the "Property Trustee"), The Bank of New York
(Delaware), a Delaware banking corporation, not in its individual capacity but
solely as trustee (the "Delaware Trustee"), and Anthony F. Daddino, Charles J.
Hendrickson, and Thomas E. Siegler, each not in his individual capacity but
solely as trustee (the Property Trustee, Delaware Trustee and each such
individual as trustee, collectively the "Trustees"). The Sponsor and the
Trustees hereby agree as follows:
1. The trust created hereby shall be known as "DLJ Capital Trust
III", in which name the Trustees, or the Sponsor to the extent provided
herein, may conduct the business of the Trust, make and execute contracts, and
sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over
to the Trustees the sum of $10. The Trustees hereby acknowledge receipt of
such amount in trust from the Sponsor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Sponsor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. Code [section] 3801 et seq. (the
"Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Secretary of State of the
State of Delaware in the form attached hereto. The Trust is hereby established
by the Sponsors and the Trustees for the purposes of (i) issuing preferred
securities representing undivided beneficial interests in the assets of the
Trust ("Preferred Securities") in exchange for cash and investing the proceeds
thereof in junior subordinated debentures of the Sponsor, (ii) issuing and
selling common securities representing undivided beneficial interest in the
assets of the Trust to the Sponsor in exchange for cash and investing the
proceeds thereof in additional junior subordinated debentures of the Sponsor
and, (iii) engaging in such other activities as are necessary, convenient or
incidental thereto.
3. The Sponsor and the Trustees will enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act Registration
Statement referred
<PAGE>
to below, to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Declaration of Trust, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. The Sponsor and the Trustees hereby authorize and direct the
Sponsor, as the sponsor of the Trust, (i) to prepare and file with the
Securities and Exchange Commission (the "Commission") and execute, in each
case on behalf of the Trust, (a) a Registration Statement on Form S-3 (the
"1933 Act Registration Statement") including any pre-effective or
post-effective amendments to such Registration Statement, relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and (b) a Registration Statement on Form 8-A (the
"1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the
Preferred Securities of the Trust under Section 12(b) of the Securities
Exchange Act of 1934, as amended; (ii) to prepare and file with the New York
Stock Exchange and execute on behalf of the Trust a listing application and
all other applications, statements, certificates, agreements and other
instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on the New York Stock Exchange; (iii) to prepare and
file and execute on behalf of the Trust such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of process
and other papers and documents as shall be necessary or desirable to register
the Preferred Securities under the securities or "Blue Sky" laws of such
jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or
desirable and (iv) to negotiate the terms of and execute on behalf of the
Trust an underwriting agreement among the Trust, the Sponsor and any
underwriter, dealer or agent relating to the Preferred Securities,
substantially in the form included as Exhibit 1.3 to the 1933 Act Registration
Statement. In the event that any filing referred to in clauses (i)-(iii) above
is required by the rules and regulations of the Commission, the New York Stock
Exchange or state securities or blue sky laws, to be executed on behalf of the
Trust by the Trustees, Anthony F. Daddino, Charles J. Hendrickson and Thomas
E. Siegler, in their capacities as Trustees of the Trust, are hereby
authorized and directed to join in any such filing and to execute on behalf of
the Trust any and all of the
2
<PAGE>
foregoing, it being understood that The Bank of New York and The Bank of New
York (Delaware), in their capacities as Trustees of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, the
New York Stock Exchange or state securities or blue sky laws. In connection
with all of the foregoing, the Sponsor and each Trustee, solely in its
capacity as Trustee of the Trust, hereby constitutes and appoints John S.
Chalsty, Anthony F. Daddino, Michael A. Boyd, Charles J. Hendrickson and
Thomas E. Siegler, and each of them, his, her or its, as the case may be, true
and lawful attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file
(i) any and all amendments (including post-effective amendments) to the 1933
Act Registration Statement and the 1934 Act Registration Statement with all
exhibits thereto, and other documents in connection therewith, and (ii) a
registration statement, and any and all amendments thereto, relating thereto
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended
with the Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and
purposes as the Sponsor or such Trustee might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, shall do or cause to
be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees initially shall be five (5) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor which may increase
or decrease the number of Trustees; provided, however, that the number of
Trustees shall in no event be less than five (5); and provided, further that
to the extent required by the Business Trust Act, one Trustee shall either be
a natural person who is a resident of the State of Delaware or, if not a
natural person, an entity which has its principal place of business in the
State of Delaware and meets other requirements imposed by applicable law.
Subject to the foregoing, the Sponsor is entitled to appoint or remove without
cause any Trustee at any time. The Trustees may resign upon thirty days prior
notice to the Sponsor.
3
<PAGE>
7. The Trust shall terminate before the issuance of any
Preferred Securities at the election of the Sponsor.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration of Trust to be duly executed as of the day and year first above
written.
Donaldson, Lufkin & Jenrette,
Inc., as Sponsor
By: /s/ Anthony F. Daddino
---------------------------
Name: Anthony F. Daddino
Title: Executive Vice President
Chief Financial Officer and
Director
The Bank of New York,
not in its individual capacity
but solely as Property Trustee
By: /s/ Nancy B. Gill
---------------------------
Name: Nancy B. Gill
Title: Assistant Treasurer
The Bank of New York
(Delaware),
not in its individual capacity
but solely as Delaware Trustee
By: /s/ Catherine Marsh
---------------------------
Name: Catherine Marsh
Title: President & COO
/s/ Anthony F. Daddino
------------------------------
Anthony F. Daddino,
not in his individual capacity
but solely as Trustee
/s/ Charles J. Hendrickson
------------------------------
Charles J. Hendrickson,
not in his individual capacity
but solely as Trustee
/s/ Thomas E. Siegler
------------------------------
Thomas E. Siegler,
not in his individual capacity
but solely as Trustee
5
CERTIFICATE OF TRUST
OF
DLJ CAPITAL TRUST III
THIS Certificate of Trust of DLJ Capital Trust III (the
"Trust"), dated as of June 14, 1996, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. Code [section] 3801 et seq.).
1. Name. The name of the business trust being formed hereby is
DLJ Capital Trust III.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is The Bank of New York (Delaware), a Delaware banking corporation,
White Clay Center, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective
as of its filing.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the sole trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
The Bank of New York (Delaware),
as Delaware Trustee
By: /s/ Catherine Marsh
---------------------------
Name: Catherine Marsh
Title: President & COO
The Bank of New York,
as Property Trustee
By: /s/ Nancy B. Gill
---------------------------
Name: Nancy B. Gill
Title: Assistant Treasurer
/s/ Anthony F. Daddino
------------------------------
Anthony F. Daddino,
as Trustee
/s/ Charles J. Hendrickson
------------------------------
Charles J. Hendrickson,
as Trustee
/s/ Thomas E. Siegler
------------------------------
Thomas E. Siegler,
as Trustee
DECLARATION OF TRUST, dated as of June 14, 1996, between
Donaldson, Lufkin & Jenrette, Inc., a Delaware corporation, as Sponsor, and
The Bank of New York, a New York banking corporation, not in its individual
capacity but solely as trustee (the "Property Trustee"), The Bank of New York
(Delaware), a Delaware banking corporation, not in its individual capacity but
solely as trustee (the "Delaware Trustee"), and Anthony F. Daddino, Charles J.
Hendrickson, and Thomas E. Siegler, each not in his individual capacity but
solely as trustee (the Property Trustee, Delaware Trustee and each such
individual as trustee, collectively the "Trustees"). The Sponsor and the
Trustees hereby agree as follows:
1. The trust created hereby shall be known as "DLJ Capital Trust
IV", in which name the Trustees, or the Sponsor to the extent provided herein,
may conduct the business of the Trust, make and execute contracts, and sue and
be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over
to the Trustees the sum of $10. The Trustees hereby acknowledge receipt of
such amount in trust from the Sponsor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Sponsor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. Code [section] 3801 et seq. (the
"Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Secretary of State of the
State of Delaware in the form attached hereto. The Trust is hereby established
by the Sponsors and the Trustees for the purposes of (i) issuing preferred
securities representing undivided beneficial interests in the assets of the
Trust ("Preferred Securities") in exchange for cash and investing the proceeds
thereof in junior subordinated debentures of the Sponsor, (ii) issuing and
selling common securities representing undivided beneficial interest in the
assets of the Trust to the Sponsor in exchange for cash and investing the
proceeds thereof in additional junior subordinated debentures of the Sponsor
and, (iii) engaging in such other activities as are necessary, convenient or
incidental thereto.
3. The Sponsor and the Trustees will enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act Registration
Statement referred
<PAGE>
to below, to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Declaration of Trust, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. The Sponsor and the Trustees hereby authorize and direct the
Sponsor, as the sponsor of the Trust, (i) to prepare and file with the
Securities and Exchange Commission (the "Commission") and execute, in each
case on behalf of the Trust, (a) a Registration Statement on Form S-3 (the
"1933 Act Registration Statement") including any pre-effective or
post-effective amendments to such Registration Statement, relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and (b) a Registration Statement on Form 8-A (the
"1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the
Preferred Securities of the Trust under Section 12(b) of the Securities
Exchange Act of 1934, as amended; (ii) to prepare and file with the New York
Stock Exchange and execute on behalf of the Trust a listing application and
all other applications, statements, certificates, agreements and other
instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on the New York Stock Exchange; (iii) to prepare and
file and execute on behalf of the Trust such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of process
and other papers and documents as shall be necessary or desirable to register
the Preferred Securities under the securities or "Blue Sky" laws of such
jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or
desirable and (iv) to negotiate the terms of and execute on behalf of the
Trust an underwriting agreement among the Trust, the Sponsor and any
underwriter, dealer or agent relating to the Preferred Securities,
substantially in the form included as Exhibit 1.3 to the 1933 Act Registration
Statement. In the event that any filing referred to in clauses (i)-(iii) above
is required by the rules and regulations of the Commission, the New York Stock
Exchange or state securities or blue sky laws, to be executed on behalf of the
Trust by the Trustees, Anthony F. Daddino, Charles J. Hendrickson and Thomas
E. Siegler, in their capacities as Trustees of the Trust, are hereby
authorized and directed to join in any such filing and to execute on behalf of
the Trust any and all of the
2
<PAGE>
foregoing, it being understood that The Bank of New York and The Bank of New
York (Delaware), in their capacities as Trustees of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, the
New York Stock Exchange or state securities or blue sky laws. In connection
with all of the foregoing, the Sponsor and each Trustee, solely in its
capacity as Trustee of the Trust, hereby constitutes and appoints John S.
Chalsty, Anthony F. Daddino, Michael A. Boyd, Charles J. Hendrickson and
Thomas E. Siegler, and each of them, his, her or its, as the case may be, true
and lawful attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file
(i) any and all amendments (including post-effective amendments) to the 1933
Act Registration Statement and the 1934 Act Registration Statement with all
exhibits thereto, and other documents in connection therewith, and (ii) a
registration statement, and any and all amendments thereto, relating thereto
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended
with the Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and
purposes as the Sponsor or such Trustee might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, shall do or cause to
be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees initially shall be five (5) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor which may increase
or decrease the number of Trustees; provided, however, that the number of
Trustees shall in no event be less than five (5); and provided, further that
to the extent required by the Business Trust Act, one Trustee shall either be
a natural person who is a resident of the State of Delaware or, if not a
natural person, an entity which has its principal place of business in the
State of Delaware and meets other requirements imposed by applicable law.
Subject to the foregoing, the Sponsor is entitled to appoint or remove without
cause any Trustee at any time. The Trustees may resign upon thirty days prior
notice to the Sponsor.
3
<PAGE>
7. The Trust shall terminate before the issuance of any
Preferred Securities at the election of the Sponsor.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration of Trust to be duly executed as of the day and year first above
written.
Donaldson, Lufkin & Jenrette,
Inc., as Sponsor
By: /s/ Anthony F. Daddino
---------------------------
Name: Anthony F. Daddino
Title: Executive Vice President
and Director
The Bank of New York,
not in its individual capacity
but solely as Property Trustee
By: /s/ Nancy B. Gill
---------------------------
Name: Nancy B. Gill
Title: Assistant Treasurer
The Bank of New York
(Delaware),
not in its individual capacity
but solely as Delaware Trustee
By: /s/ Catherine Marsh
---------------------------
Name: Catherine Marsh
Title: President & COO
/s/ Anthony F. Daddino
------------------------------
Anthony F. Daddino,
not in his individual capacity
but solely as Trustee
/s/ Charles J. Hendrickson
------------------------------
Charles J. Hendrickson,
not in his individual capacity
but solely as Trustee
/s/ Thomas E. Siegler
------------------------------
Thomas E. Siegler,
not in his individual capacity
but solely as Trustee
5
CERTIFICATE OF TRUST
OF
DLJ CAPITAL TRUST IV
THIS Certificate of Trust of DLJ Capital Trust IV (the "Trust"),
dated as of June 14, 1996, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. Code [section] 3801 et seq.).
1. Name. The name of the business trust being formed hereby is
DLJ Capital Trust IV.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is The Bank of New York (Delaware), a Delaware banking corporation,
White Clay Center, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective
as of its filing.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the sole trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
The Bank of New York (Delaware),
as Delaware Trustee
By: /s/ Catherine Marsh
---------------------------
Name: Catheriner Marsh
Title: President & COO
The Bank of New York,
as Property Trustee
By: /s/ Nancy B. Gill
---------------------------
Name: Nancy B. Gill
Title: Assistant Treasurer
/s/ Anthony F. Daddino
------------------------------
Anthony F. Daddino,
as Trustee
/s/ Charles J. Hendrickson
------------------------------
Charles J. Hendrickson,
as Trustee
/s/ Thomas E. Siegler
------------------------------
Thomas E. Siegler,
as Trustee
EXHIBIT 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Stockholders
Donaldson, Lufkin & Jenrette, Inc.:
We consent to the use of our report incorporated by reference into this
Registration Statement and to the reference to our firm under the heading
"Experts" in the prospectuses.
/s/ KPMG Peat Marwick LLP
New York, New York
July 3, 1996
