<PAGE>
PURSUANT TO RULE 424(B)(5)
TO REGISTRATION STATEMENT 33-52609
PROSPECTUS SUPPLEMENT
(To Prospectus dated April 13, 1994)
FIRST
SECURITY (R)
CORPORATION
$100,000,000
7 7/8% Senior Notes due October 15, 1999
Interest payable April 15 and October 15
ISSUE PRICE: 99.778%
Interest on the 7 7/8% Senior Notes due October 15, 1999 (the "Notes") is pay-
able semi-annually on April 15 and October 15 of each year beginning April 15,
1995. The Notes will not be redeemable or repayable prior to maturity and will
not be subject to any sinking fund. The Notes will be issued only in fully reg-
istered form in denominations of $1,000 and integral multiples thereof. See
"Description of Notes."
The Notes will be issued only in book-entry form represented by one or more
Global Notes, registered in the name of The Depository Trust Company, as depos-
itary (the "Depositary"). Beneficial interests in the Notes will be shown on,
and transfers thereof will be effected only through, records maintained by the
Depositary and its participants. Except as described under "Description of
Notes--Book-Entry Notes", Notes in certificated form will not be issued in ex-
change for the Global Notes. Settlement for the Notes will be made in immedi-
ately available funds. The Notes will trade in the Depositary's Same-Day Funds
Settlement System until maturity, and secondary market trading activity in the
Notes will therefore settle in immediately available funds. See "Description of
Notes--Book-Entry Notes."
THE NOTES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS ACCOUNTS OR OTHER
OBLIGATIONS OF ANY INSURED DEPOSITORY INSTITUTION OR OTHER SUBSIDIARY OF THE
COMPANY AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC (1) DISCOUNT (2) COMPANY (1)(3)
- -------------------------------------------------
<S> <C> <C> <C>
Per Note 99.778% .575% 99.203%
- -------------------------------------------------
Total $99,778,000 $575,000 $99,203,000
- -------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from October 18, 1994.
(2) The Company has agreed to indemnify the Underwriters against certain lia-
bilities, including liabilities under the Securities Act of 1933.
(3) Before deducting expenses payable by the Company estimated at $85,000.
The Notes are offered by the several Underwriters when, as and if issued by the
Company, delivered to and accepted by the Underwriters and subject to their
right to reject orders in whole or in part. It is expected that the Notes will
be ready for delivery through the book-entry facilities of The Depository Trust
Company on or about October 18, 1994.
J.P. MORGAN SECURITIES INC. CS FIRST BOSTON
October 11, 1994
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMA-
TION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED
BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, NOR ANY SALE MADE HEREUNDER AND THEREUNDER, SHALL UNDER ANY CIR-
CUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF FIRST SECURITY CORPORATION SINCE THE DATE HEREOF OR THEREOF. THIS PROSPEC-
TUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION
BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AU-
THORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUAL-
IFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SO-
LICITATION.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
<S> <C>
First Security Corporation.............................................. S-3
Recent Operating Results................................................ S-3
Consolidated Summary Financial Data..................................... S-5
Capitalization.......................................................... S-7
Recent Legislation...................................................... S-8
Description of Notes.................................................... S-8
Underwriting............................................................ S-10
Validity of Notes....................................................... S-10
PROSPECTUS
Available Information................................................... 2
Incorporation of Certain Documents by Reference......................... 2
First Security Corporation.............................................. 3
Use of Proceeds......................................................... 9
Description of Debt Securities.......................................... 9
Description of Preferred Stock.......................................... 17
Description of Common Stock............................................. 20
Description of Common Stock Warrants.................................... 23
Plan of Distribution.................................................... 24
Experts................................................................. 25
Validity of Securities.................................................. 25
</TABLE>
S-2
<PAGE>
FIRST SECURITY CORPORATION
First Security Corporation (the "Company") is a Delaware incorporated multi-
bank holding company headquartered in Salt Lake City, Utah. At June 30, 1994,
the Company and its subsidiaries had total consolidated assets, deposits, and
shareholders' equity of $11.7 billion, $7.9 billion and $859 million, respec-
tively. The Company maintains its executive offices at 79 South Main Street,
Salt Lake City, Utah 84111, telephone 801-246-5706.
The principal assets of the Company are the capital stock of First Security
Bank of Utah, N.A. (approximately 99.9% owned), First Security Bank of Idaho,
N.A. (100% owned), and First Security Bank of New Mexico, N.A. (100% owned),
all of which are national banks providing a broad range of banking, fiduciary,
financial and other services.
The Company also owns 99.9% of the outstanding capital stock of First Security
Bank of Wyoming, a Wyoming state bank, 100% of the outstanding capital stock
of First Security Bank of Oregon, an Oregon savings bank, and 100% of the cap-
ital stock of First Security Bank of Nevada, a Nevada state chartered bank.
Nonbank subsidiaries owned by the Company include a leasing company, a mort-
gage company, a securitiesbroker-dealer, an investment adviser, an insurance
agency, a credit life insurance company, a management and services subsidiary,
and a small business investment company. The securities subsidiaries are sub-
ject to regulation and supervision by the SEC and applicable state securities
authorities. The insurance agency and credit life insurance company are regu-
lated by applicable state insurance regulators. The business investment com-
pany is licensed by the Small Business Administration.
RECENT OPERATING RESULTS
The Company earned record net income of $35.22 million for the second quarter
of 1994, an increase of $5.53 million (18.6%) over the $29.69 million earned
in the second quarter of 1993. This was the highest quarterly net income ever
earned by the Company, and was the fourth time in the past six quarters that
the Company has achieved record quarterly earnings. The increase in net income
for the second quarter of 1994 was due primarily to the 19.0% growth in aver-
age earning assets, combined with a lower overall average funding cost and
higher noninterest income.
Net income for the second quarter of 1994 generated a 1.29% return on average
assets ("ROAA") and a 16.49% return on average equity ("ROAE"), compared with
1.30% and 15.49%, respectively, for the year-ago quarter. The quarter's net
income per share was $0.71, up $0.09 (14.5%) from $0.62 one year ago.
For the 1994 year-to-date period, net income totaled $68.38 million, up $7.98
million (13.2%) over the corresponding period in 1993. This generated a 1.31%
ROAA and a 16.12% ROAE for the first six months of 1994, compared with a 1.36%
ROAA and a 16.15% ROAE for the same period in 1993. Net income per share for
the first six months of 1994 was $1.38, up $0.11 (8.7%) from $1.27 for the
year-ago period.
The Company's financial statements were restated at the end of 1993 to reflect
the November 19, 1993 pooling-of-interests merger with First National Finan-
cial Corporation and its wholly-owned subsidiary First National Bank in Albu-
querque (renamed First Security Bank of New Mexico), headquartered in Albu-
querque, New Mexico with $1.13 billion in deposits and 26 branches.
Net interest income on a fully-taxable equivalent ("FTE") basis rose to
$118.31 million for the second quarter of 1994, up $17.21 million (17.0%) from
the year-ago quarter, and totaled $230.54 million for the first six months of
1994, up $30.01 million (15.0%) from the year-ago period. These increases were
due to the growth in average earning assets, particularly in residential mort-
gage loans and consumer loans, reflecting the Company's position as the lead-
ing consumer lender in Utah and Idaho. The FTE net interest margin was 4.79%
for the second quarter of 1994, down from 4.87% for the year-ago quarter and
4.92% for the first quarter of 1994. This lower quarterly net interest margin
was largely the result of the Company's reliance upon borrowed funds to sup-
port earning asset growth which exceeded deposit growth. The FTE net interest
margin was 4.85% for the first six months of 1994, down from 4.95% for the
year-ago period and 4.95% for all of 1993. This lower year-to-date net inter-
est margin reflected decreased yields from fixed rate mortgage and instalment
loans resulting from the runoff of older, higher yielding balances. Those
pressures were partially offset by lower average funding costs and higher
yields generated from market-rate sensitive assets.
S-3
<PAGE>
The provision for loan losses was $343,000 for the second quarter of 1994, up
$421,000 from a net recovery for the year-ago quarter, and totaled $171,000 for
the first six months of 1994, down $1.73 million (91.0%) from the year-ago pe-
riod. Net loans charged off included in this provision were $2.49 million for
the quarter, up $278,000 (12.6%) from the year-ago quarter, and totaled $3.16
million for the first six months of 1994, down $1.55 million (32.9%) from the
year-ago period. Reflecting excellent asset quality, the ratio of net loans
charged off to average loans was 0.14% for the quarter, down from 0.15% for the
year-ago quarter, and was 0.09% year-to-date, down from 0.17% for the year-ago
period.
The Company continued to increase its earning assets, strengthen its asset
quality, and maintain a strong total capital position. The Company's total as-
sets were a record $11.73 billion at June 30, 1994, up $2.24 billion (23.7%)
from June 30, 1993 and up $1.52 billion (14.9%) from December 31, 1993. Total
earning assets were $10.48 billion at quarter end, up $1.96 billion (23.0%)
from one year ago and up $1.15 billion (12.4%) from year-end 1993. This was due
primarily to growth in the loan portfolio, the positive impact of recent acqui-
sitions, and planned corporate growth. Loans were a record $7.28 billion at
quarter end, up $1.34 billion (22.5%) from one year ago and up $722 million
(11.0%) from year-end 1993. Increases occurred in every loan category, particu-
larly in consumer loans and real estate secured loans.
Noninterest income rose to $49.96 million for the second quarter of 1994, up
$13.22 million (36.0%) from the year-ago quarter, and totaled $92.61 million
for year-to-date 1994, up $15.00 million (19.3%) from the year-ago period.
These increases came largely from acquisitions and volume-related growth in
service charges on accounts, real estate loan servicing fees, bankcard and
third-party processing fees, and trust activities.
Total stockholders' equity increased to a record $858.77 million at June 30,
1994, up $82.27 million (10.6%) from June 30, 1993, and up $23.04 million
(2.8%) from December 31, 1993. This growth was due primarily to record earnings
combined with the issuance of new shares of common stock to finance acquisi-
tions.
The Company's Tier 1 risk-based capital ratio at June 30, 1994, was 9.92%, com-
pared with 11.82% at year-end 1993, and the Total Capital ratio was 12.12%,
compared with 14.15% at year-end 1993. The Company and its subsidiary banks are
classified as "well-capitalized" institutions according to the regulatory defi-
nition for risk-based capital ratios.
In 1994, the Company acquired (a) CrossLand Mortgage Corp., a 1-to-4 family
residential mortgage loan originator and servicer which has 60 offices in 18
states across the country; (b) Community First Bank (headquartered in
Clearfield, Utah) with five branches, $74 million in assets, and $62 million in
deposits; (c) American BanCorporation (headquartered in Boise, Idaho) with four
branches, $64 million in assets, and $51 million in deposits; and (d) Star Val-
ley State Bank (located in Afton, Wyoming) with one branch and $57 million in
deposits.
S-4
<PAGE>
CONSOLIDATED SUMMARY FINANCIAL DATA
The following consolidated summary historical financial data should be read in
conjunction with and is qualified in its entirety by the detailed financial and
other information included in the documents incorporated herein by reference.
See "Incorporation of Certain Documents by Reference" in the Prospectus, in-
cluding the Company's Annual Report on Form 10-K for the year ended December
31, 1993 and the Company's Quarterly Report on Form 10-Q for the six months
ended June 30, 1994.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------------- -----------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
----------- ---------- ----------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
(000):
Net interest income $226,612 $194,732 $403,938 $375,949 $322,809 $302,140 $282,872
Net interest income,
FTE 230,541 200,535 411,571 385,570 333,228 313,462 293,129
Provision for loan
losses 171 1,898 11,684 30,277 66,393 94,899 45,949
Noninterest income 92,611 77,606 167,159 144,036 137,822 115,823 94,968
Noninterest expenses 211,892 175,307 386,146 339,456 306,504 285,095 252,289
Net income 68,382 60,405 114,056 100,343 59,412 29,001 55,941
COMMON STOCK DATA:
Earnings per common
share:
Primary $1.38 $1.27 $2.38 $2.17 $1.44 $0.73 $1.42
Fully-diluted 1.38 1.27 2.38 2.16 1.36 0.67 1.32
Dividends paid per
share 0.52 0.42 0.88 0.68 0.60 0.57 0.55
Book value at period
end 17.45 16.64 17.24 15.81 14.44 13.74 13.59
Dividend payout ratio 37.68% 33.07% 36.92% 31.55% 41.56% 77.69% 38.69%
Common shares
outstanding at
period end (000) 49,177 46,617 48,437 45,642 43,937 39,629 39,182
END OF PERIOD BALANCE
SHEET DATA (000):
Investment securities $2,395,804 $1,862,131 $1,762,783 $1,750,180 $1,547,088 $1,376,827 $1,308,612
Loans, net of unearned
income 7,282,550 5,946,520 6,561,021 5,616,624 5,432,951 5,423,190 5,091,075
Reserve for loan losses (132,714) (126,896) (134,848) (127,847) (126,887) (117,192) (78,694)
Total interest-earning
assets 10,484,219 8,524,631 9,329,273 8,054,059 7,452,158 7,058,609 6,816,974
Total assets 11,734,917 9,490,282 10,211,689 8,895,673 8,290,168 7,893,903 7,553,831
Interest-bearing
deposits 6,043,972 5,453,683 5,806,020 5,439,139 5,270,453 5,071,252 4,412,442
Short-term borrowings 2,411,385 1,181,217 1,486,905 995,790 899,294 918,566 1,314,265
Long-term debt 312,005 237,895 224,836 127,203 87,516 98,851 147,331
Total interest-bearing
liabilities 8,767,362 6,872,795 7,517,761 6,562,132 6,257,263 6,088,669 5,874,038
Total deposits 7,887,531 6,978,451 7,503,707 6,868,453 6,514,692 6,188,735 5,413,165
Stockholders' equity 858,766 779,494 835,731 722,447 635,173 545,295 533,330
Nonperforming assets:
(nonaccruing and
renegotiated loans
plus other real
estate owned (ORE)) 32,997 91,701 52,819 107,455 150,699 150,485 121,345
Accruing loans past due
90 days or more 9,184 9,150 7,155 11,766 17,200 16,643 18,611
</TABLE>
- --------
Note: Figures have been restated where applicable to reflect 3-for-2 stock
splits in the form of 50% stock dividends paid in June 1991 and May 1992, the
November 19, 1993 pooling-of-interests merger with First National Financial
Corporation (New Mexico), and the retroactive adoption in 1993 of SFAS 109--
"Accounting for Income Taxes."
"FTE"--Fully Taxable Equivalent.
S-5
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------ --------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- ------ ------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
PROFITABILITY RATIOS:
Return on average
assets 1.31% 1.36% 1.24% 1.18% 0.74% 0.37% 0.79%
Return on average
stockholders' equity 16.12 16.15 14.54 14.62 10.26 5.25 10.80
Net interest margin,
FTE 4.85 4.95 4.95 5.02 4.59 4.43 4.61
Net interest spread,
FTE 4.27 4.35 4.33 4.31 3.75 3.56 3.66
Efficiency ratio:
(noninterest
expenses/FTE net
interest income plus
noninterest income) 65.57 63.03 66.72 64.10 65.07 66.41 65.01
Productivity ratio:
(noninterest
expenses/average
assets) 4.07 3.95 4.19 4.00 3.81 3.61 3.56
CAPITAL RATIOS:
Stockholders' equity to
assets 7.32% 8.18% 8.18% 8.12% 7.66% 6.91% 7.06%
Tangible common equity
ratio 6.03 8.04 8.07 7.96 7.51 6.71 -
Risk-based capital
ratios:
Tier 1 9.92 11.10 11.82 11.32 10.61 9.32 -
Tier 1 + Tier 2 12.12 13.60 14.15 13.78 11.84 11.27 -
Leverage 6.78 8.20 8.08 7.99 7.53 6.75 -
ASSET QUALITY RATIOS:
Reserve for loan losses
at end of period to:
Total loans 1.82% 2.13% 2.06% 2.28% 2.34% 2.16% 1.55%
Nonaccruing and
renegotiated loans 539.27 196.68 370.93 159.87 112.91 118.09 131.85
Nonperforming assets at
end of period to:
Total loans and ORE 0.45 1.54 0.80 1.90 2.75 2.75 2.35
Total assets 0.28 0.97 0.52 1.21 1.82 1.91 1.61
Total equity 3.84 11.81 6.32 14.87 23.73 27.60 22.75
Total equity plus
reserve for loan
losses 3.33 10.15 5.44 12.64 19.78 22.72 19.83
Net loans charged off
to average loans 0.09 0.17 0.20 0.60 1.09 1.11 0.80
RATIO OF EARNINGS TO
FIXED CHARGES:
Excluding interest on
deposits 3.76x 5.17x 4.62x 4.54x 2.28x 1.33x 1.72x
Including interest on
deposits 1.80x 1.79x 1.72x 1.54x 1.23x 1.08x 1.19x
</TABLE>
- --------
"FTE"--Fully Taxable Equivalent.
S-6
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited historical capitalization of the
Company as of June 30, 1994, and as adjusted to give effect to the issuance of
the Notes offered hereby.
<TABLE>
<CAPTION>
JUNE 30, 1994
-----------------------------------------
ACTUAL ADJUSTMENTS(1) AS ADJUSTED(1)
---------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
LONG-TERM DEBT
Parent Company:
7.5% Subordinated Notes due 2002 $75,000 $75,000
Floating Rate Notes due 1999 7,687 7,687
Medium Term Notes due 1996-98 50,000 50,000
7.78% Senior Notes due October 15,
1999 $100,000 100,000
Subsidiaries:(2)
Advances from Federal Home Loan
Bank(3) 176,377 176,377
Mortgages payable and other debt 2,941 2,941
---------- -------- ----------
Total long-term debt 312,005 100,000 412,005
STOCKHOLDERS' EQUITY
Series "A," $3.15 Cumulative
Convertible Preferred Stock:
(12,852 shares outstanding) 675 675
Common Stock (par value $1.25,
authorized 150,000,000 shares,
issued and outstanding 49,859,000
shares)(4) 62,323 62,323
Paid-in surplus 136,928 136,928
Retained earnings 700,582 700,582
Net unrealized loss on securities
available for sale (26,548) (26,548)
---------- -------- ----------
Subtotal 873,285 0 873,285
Less: common treasury stock at cost
(682,000 shares) 15,194 15,194
---------- -------- ----------
Total common stockholders' equity 858,091 0 858,091
---------- -------- ----------
Total stockholders' equity 858,766 0 858,766
---------- -------- ----------
Total long-term debt and
stockholders' equity $1,170,771 $100,000 $1,270,771
========== ======== ==========
</TABLE>
- --------
(1) Reflects the issuance of $100 million of Notes offered hereby.
(2) These obligations are direct obligations of subsidiaries of the Company,
and as such, constitute claims against such subsidiaries ranking prior to
the Company's equity therein.
(3) Federal Home Loan Bank advances mature in 1995-2000.
(4) Shares issued and outstanding and as adjusted exclude 2,348,550 shares
reserved for issuance upon exercise of employee stock options, 156,152
shares reserved for issuance upon exercise of conversion rights of
preferred stock, 315,147 shares reserved for issuance under the dividend
reinvestment and stock purchase plan and 2,519,663 shares reserved for
issuance under the Company's Comprehensive Management Incentive Plan.
S-7
<PAGE>
RECENT LEGISLATION
On September 29, 1994, the President signed the Riegle-Neal Interstate Banking
and Branching Efficiency Act of 1994 (the "Riegle-Neal Act"). The Riegle-Neal
Act authorizes bank holding companies, such as the Company, to engage in unre-
stricted interstate acquisitions of banks beginning September 29, 1995, and al-
lows interstate branching under certain circumstances commencing on June 1,
1997. The Company is evaluating the Riegle-Neal Act, and cannot currently de-
termine what effect, if any, it will have on the Company's operations.
DESCRIPTION OF NOTES
The Notes will be issued under an Indenture, dated as of March 1, 1994, between
the Company and The First National Bank of Chicago (the "Senior Trustee"). The
following is a brief description of the terms of the Notes. The Notes are a se-
ries of Senior Debt Securities described in the accompanying Prospectus. The
following description of the Notes, referred to in the accompanying Prospectus
as "Senior Debt Securities," supplements, and to the extent inconsistent there-
with replaces, the description of the general terms and provisions of the Se-
nior Debt Securities set forth in the Prospectus, to which reference is hereby
made. Capitalized terms not otherwise defined herein have the meanings given to
them in the Prospectus.
GENERAL
The Notes offered hereby will mature on October 15, 1999, and are limited to
$100,000,000 aggregate principal amount. Interest on the Notes will accrue at
the rate of 7 7/8% per annum, and will be payable semi-annually on April 15 and
October 15 of each year, commencing April 15, 1995, to the persons in whose
names the Notes are registered at the close of business on April 1 or October
1, as the case may be, next preceding such interest payment date and at matu-
rity to the persons to whom principal is payable. The Notes will not be redeem-
able or repayable prior to maturity, and will not be subject to any sinking
fund.
BOOK-ENTRY NOTES
Upon issuance, all Notes will be represented by one or more global securities
(the "Global Notes"). Each Global Note representing the Notes will be deposited
with, or on behalf of, the Depositary, and will be registered only in the name
of the Depositary or a nominee of the Depositary.
Ownership of the Notes will be limited to institutions that have accounts with
such Depositary or its nominee (each, a "participant" and collectively the
"participants") or persons that may hold interests through participants. In ad-
dition, ownership of the Notes by participants will only be evidenced by, and
transfers of such ownership interest will be effected only through, records
maintained by the Depositary (or its successor or nominee) and its partici-
pants. Ownership of the Notes by persons that hold through participants will
only be evidenced by, and transfers of such ownership interest within such par-
ticipants will be effected only through, records maintained by such partici-
pants. The laws of some jurisdictions require that certain purchasers of secu-
rities take physical delivery of such securities in definitive form. Such laws
may impair the ability to transfer the Notes.
The Company has been advised by the Depositary that upon the issuance of a
Global Note representing the Notes, and the deposit of such Global Note with
the Depositary, the Depositary will immediately credit, on its book-entry reg-
istration and transfer system, the respective principal amounts of the Notes
represented by such Global Note to the accounts of participants. The accounts
to be credited will be designated by the Underwriters.
Payment of principal of, and any premium and interest on the Notes represented
by any Global Note registered in the name of or held by the Depositary or its
nominee will be made to the Depositary or its nominee, as the case may be, as
the registered owner and holder of the Global Note representing such Notes.
None of the Company, the Senior Trustee or any agent of the Company or the Se-
nior Trustee will have any responsibility or liability for any aspect of the
Depositary's records or any participant's records relating to, or payments made
on
S-8
<PAGE>
account of, the Notes or for maintaining, supervising or reviewing any of the
Depositary's records or any participant's records relating to such Notes.
The Company has been advised by the Depositary that upon receipt of any payment
of principal, premium or interest in respect of a Global Note, the Depositary
will immediately credit, on its book-entry registration and transfer system,
accounts of participants with payments in the amounts proportionate to their
respective beneficial interest in the principal amount of such Global Note or
as shown on the records of the Depositary. Payments by participants to owners
of Notes held through such participants will be governed by standing instruc-
tions and customary practices, as is now the case with securities held for the
accounts of customers registered in "street name", and will be the responsibil-
ity of such participants.
No Global Note described above may be transferred except as a whole by the De-
positary for such Global Note to a nominee of the Depositary or by a nominee of
the Depositary to another nominee of the Depositary.
Notes represented by a Global Note are exchangeable for definitive Notes in
registered form, of like tenor and of an equal aggregate principal amount, only
if (x) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Note or if at any time the Depositary
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and a successor depositary is not ap-
pointed by the Company within 60 days, (y) the Company in its sole discretion
determines that such Notes shall be exchangeable for definitive Notes in regis-
tered form or (z) any event shall have happened and be continuing which, after
notice or lapse of time, or both, would become an Event of Default with respect
to the Notes. Any Global Note representing the Notes that is exchangeable pur-
suant to the preceding sentence shall be exchangeable in whole for definitive
Notes in registered form, of like tenor and of an equal aggregate principal
amount, in denominations of $1,000 and integral multiples thereof. Such defini-
tive Notes shall be registered in the name or names of such person or persons
as the Depositary shall instruct the Senior Trustee. It is expected that such
instructions may be based upon directions received by the Depositary from its
participants with respect to ownership of the Notes.
Except as provided above, owners of the Notes will not be entitled to receive
physical delivery of Notes in definitive form and no Global Note representing
the Notes shall be exchangeable, except for another Global Note of like denomi-
nation and tenor to be registered in the name of the Depositary or its nominee.
Accordingly, each person owning a Note must rely on the procedures of the De-
positary and, if such person is not a participant, on the procedures of the
participant through which such person owns its beneficial interest, to exercise
any rights of a holder under the Notes. The Company understands that under ex-
isting industry practices, in the event that the Company requests any action of
holders or an owner of a Note desires to give or take any action a holder is
entitled to give or take under the Notes, the Depositary would authorize the
participants owning the relevant Notes to give or take such action, and such
participants would authorize beneficial owners owning through such participants
to give or take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
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 member of
the Federal Reserve System, a "clearing corporation" within the meaning of the
New York Uniform Commercial Code, and a "clearing agency" registered pursuant
to Section 17A of the Exchange Act. The Depositary was created to hold securi-
ties of its participants and to facilitate the clearance and settlement of se-
curities transactions among its participants through electronic book-entry
changes in accounts of the participants, thereby eliminating the need for phys-
ical movements of securities certificates. The Depositary's participants in-
clude securities brokers and dealers (including the Underwriters), 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.
S-9
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated the date hereof, the Company has agreed to sell to the Underwriters named
below and the Underwriters have severally agreed to purchase from the Company
the following respective principal amounts of the Notes:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
NOTES
------------
<S> <C>
J.P. Morgan Securities Inc................................... $ 50,000,000
CS First Boston Corporation.................................. $ 50,000,000
------------
Total...................................................... $100,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the Underwriters
are obligated to take and pay for all of the Notes if any are taken.
The Company has been advised by the Underwriters that they propose to offer the
Notes to the public initially at the public offering price set forth on the
cover page of this Prospectus Supplement and to certain dealers at such price
less a concession of .375% of the principal amount per Note; that the Under-
writers and such dealers may allow a discount of .250% of such principal amount
on sales to certain other dealers; and that after the initial public offering
the public offering price and concession and discount to dealers may be changed
by the Underwriters.
The Notes will not be listed on any securities exchange. The Notes are a new
issue of securities with no established trading market. The Underwriters have
advised the Company that they intend to act as market makers for the Notes.
However, the Underwriters are not obligated to do so and may discontinue any
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.
The Company has agreed to indemnify the Underwriters against certain liabili-
ties, including civil liabilities under the Securities Act of 1933, or contrib-
ute to payments which the Underwriters may be required to make in respect
thereof.
In the ordinary course of their respective businesses, each of the Underwriters
and certain of their affiliates have engaged and may engage in investment bank-
ing and commercial banking transactions with the Company.
VALIDITY OF NOTES
The validity of the Notes will be passed upon for the Company by Ray, Quinney &
Nebeker, Salt Lake City, Utah, and for the Underwriters by Sullivan & Cromwell,
Los Angeles, California. With respect to all matters of New York law, Ray,
Quinney & Nebeker will rely on the opinions of Sullivan & Cromwell. Alonzo W.
Watson and Brad D. Hardy, both shareholders and directors of Ray, Quinney & Ne-
beker, are also officers of the Company. As of June 30, 1994, Ray, Quinney &
Nebeker attorneys, together with their immediate families, beneficially owned
less than 3.0% of the then outstanding shares of Common Stock of the Company.
From time to time, Sullivan & Cromwell has performed legal services for the
Company.
S-10
