<PAGE> 1
As filed with the Securities and Exchange Commission on May 8, 1996.
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
FIRST SECURITY CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 6711 87-6118148
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
79 SOUTH MAIN STREET
SALT LAKE CITY, UTAH 84111
(801) 246-6000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
SCOTT C. ULBRICH
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
FIRST SECURITY CORPORATION
79 SOUTH MAIN STREET
SALT LAKE CITY, UTAH 84111
(801) 246-5706
(Address, including zip code, and telephone number, including
area code, of agent for service)
Copies To:
A. ROBERT THORUP, ESQ. STANLEY F. FARRAR, ESQ.
RAY, QUINNEY & NEBEKER SULLIVAN & CROMWELL
79 SOUTH MAIN STREET 444 SOUTH FLOWER STREET
SALT LAKE CITY, UTAH 84111 LOS ANGELES, CALIFORNIA 90071
(801) 532-1500 (213) 955-8000
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this Registration
Statement as determined by market conditions.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. |_|
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. |_|
<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================================
Title of Securities To Amount to Be Proposed Proposed Maximum Amount of
Be Registered Registered(1) Maximum Offering Aggregate Offering Price(3) Registration Fee
Price Per Unit(2)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities $ (4), (6)
- -------------------------------------------------------------------------------------------------------------------------------
Preferred Stock (6)
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock, par
value $1.25 (7) (5) (6)
- -------------------------------------------------------------------------------------------------------------------------------
Warrants to Purchase (5) (6)
Common Stock
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 600,000,000 (2) $ 600,000,000 $ 206,898 (8)
===============================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(O) under the Securities Act of 1933, which permits the
registration fee to be calculated on the basis of the maximum offering price of
all securities listed, the table does not specify by each class information as
to the amount to be registered, proposed maximum offering price per Unit or
proposed maximum offering price. There are being registered hereunder such
presently indeterminate principal amount or number of Debt Securities, shares of
Preferred Stock, shares of Common Stock, Common Stock Rights, and Warrants to
Purchase Common Stock as may be offered from time to time, with an aggregate
initial offering price not to exceed $600,000,000 (or the equivalent thereof in
one or more foreign or composite currencies, including the European Currency
Unit), plus an indeterminate number of shares as may be issued upon conversion
of Debt Securities or Preferred Stock for which no separate consideration will
be received.
(2) The proposed maximum offering price per unit will be determined
from time to time by the Registrant in connection with the issuance by the
Registrant of the securities registered hereunder.
(3) Estimated solely for the purpose of computing the registration fee.
(4) Exclusive of accrued interest, if any.
(5) The aggregate amount of Common Stock registered hereunder is limited to that
which is permissible under Rule 415(a)(4) under the Securities Act of 1933.
(6) No separate consideration will be received for (i) Debt Securities,
Preferred Stock or Common Stock that are issued upon conversion of or in
exchange for Debt Securities or Preferred Stock or (ii) Common Stock to be
issued upon exercise of related Warrants to purchase Common Stock.
(7) Each share of Common Stock registered hereby includes one right to purchase
additional of the Company's securities, which Right will not be evidenced
separately from the Common Stock prior to the occurrence of certain events.
These Rights will be triggered by a future acquisition of a certain percentage
of the Company's outstanding Common Stock by a stockholder or group of
stockholders.
(8) A fee of $103,449 was previously paid in connection with the registration by
the Company of $300,000,000 in aggregate initial offering price of its Debt
Securities, shares of Preferred Stock, shares of Common Stock, Common Stock
Rights and Warrants to Purchase Common Stock under the Registration Statement on
Form S-3 (File No. 33-52609), of which $75,000,000 has not been sold, resulting
in an excess fee of $25,862. Accordingly wired funds to the Commission lock box
in the amount of $181,036 will accompany the filing of this Registration
Statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.
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<PAGE> 3
PROSPECTUS
$ 600,000,000
[LOGO]
DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK, AND WARRANTS TO PURCHASE COMMON
STOCK
First Security Corporation (the "Company") may from time to time issue and offer
(a) its notes, debentures or other unsecured evidences of indebtedness in one or
more series ("Debt Securities"), which may be either senior ("Senior Debt
Securities") or subordinated ("Subordinated Debt Securities") in priority of
payment; (b) shares of one or more series of its Preferred Stock ("Preferred
Stock"); (c) shares of its Common Stock (par value $1.25) ("Common Stock"); and
(d) warrants to acquire Common Stock ("Common Stock Warrants") either directly
or in conversion or exchange for other securities. (When appropriate, all of the
foregoing types of securities are referred to herein as "the Securities".)
THE SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY
BANK OR NONBANK SUBSIDIARY OF THE COMPANY AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, BANK INSURANCE FUND OR ANY OTHER GOVERNMENT
AGENCY.
The Senior Debt Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. The Subordinated Debt Securities will be
subordinated to all of the Company's existing and future Senior Debt, as
defined. See "Description of Debt Securities."
The Company may offer the Securities up to an aggregate initial offering price
not to exceed US$600,000,000 or, as to Debt Securities, its equivalent based on
the applicable exchange rate at the time of offering in such foreign currencies
or units of two or more currencies thereof as may be designated by the Company
at the time of such an offering. Debt Securities or Preferred Stock of each
series will be offered on terms determined at the time of sale. When any of the
Securities is offered, a supplement to this Prospectus (the "Prospectus
Supplement") setting forth certain terms of the offered Securities will be
delivered together with this Prospectus. With regard to Debt Securities or
Preferred Stock in respect of which this Prospectus is being delivered, the
Prospectus Supplement will set forth, if applicable, the specific designation,
aggregate principal amount or redemption value, rate (or method of calculation)
or dividend and time of payment of any interest or dividend, maturity, initial
public offering price, place or places of payment of interest or dividends,
redemption terms and other terms of such Securities.
The Securities may be sold to underwriters for public offering pursuant to the
terms of offering fixed at the time of sale. Such underwriters may include J.P.
Morgan Securities Inc. and CS First Boston Corporation, or may be a group of
underwriters represented by such firms. In addition, any of the Securities may
be sold to the public by the Company directly or through agents or dealers. J.P.
Morgan Securities Inc. and CS First Boston Corporation may also act as agent. If
any underwriters or agents are involved in the sale of any Securities, their
names and any applicable fee, commission, purchase price or discount
arrangements with them will be set forth, or will be calculated from the
information set forth, in a Prospectus Supplement. SEE "Plan of Distribution."
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF ANY
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 SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
J.P. MORGAN & CO. CS FIRST BOSTON
THE DATE OF THIS PROSPECTUS IS APRIL , 1996.
<PAGE> 4
No dealer, salesman or other person has been authorized to
give any information or to make any representation not contained in this
Prospectus or any Prospectus Supplement in connection with the offer made by
this Prospectus and any such Prospectus Supplement and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or any Underwriter. Neither this Prospectus nor any Prospectus
Supplement constitutes an offer to sell or a solicitation of an offer to buy any
of the securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer in such jurisdiction. Neither the delivery of this
Prospectus or any Prospectus Supplement nor any sale made hereunder shall, under
any circumstances, create an implication that the information herein is correct
as of any time subsequent to the date hereof or that there has been no change in
the affairs of the Company since such date.
FOR NORTH CAROLINA RESIDENTS:
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT APPROVED OR
DISAPPROVED THIS OFFERING, NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements, and other information can be inspected and copies obtained at the
offices of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549; at Public Reference Facilities at the Chicago Regional Office, Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and at the
New York Regional Office, Seven World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material can be obtained upon written request from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
The Company has filed with the Commission in Washington, D.C.
a Registration Statement under the Securities Act of 1933 (the "Securities Act")
with respect to the Securities. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all the information set forth in
the Registration Statement, including the exhibits thereto, which may be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated herein by reference the following
documents of the Company heretofore filed by it with the Commission:
(a) Annual Report on Form 10-K for the year ended
December 31, 1995; and
(b) Proxy Statement dated as of March 15, 1996.
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<PAGE> 5
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Securities made hereby are
incorporated herein by reference, and such documents shall be deemed 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 statement so modified or superseded
shall not 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
this Prospectus is delivered, upon request of any such person, a copy of any or
all of the foregoing documents incorporated herein by reference (other than the
exhibits to such documents). Written requests should be directed to:
Scott C. Ulbrich
Executive Vice President
First Security Corporation
79 South Main Street
Salt Lake City, Utah 84111
Telephone requests may be directed to (801) 246-5706.
FIRST SECURITY CORPORATION
GENERAL
The Company is a Delaware incorporated multi-bank holding
company headquartered in Salt Lake City, Utah. At December 31, 1995, the Company
and its subsidiaries had total consolidated assets and shareholders' equity of
$13 billion and $1 billion, respectively.
The principal banking subsidiaries of the Company are First
Security Bank of Utah, N.A. ("First Security Utah"), First Security Bank of
Idaho, N.A. ("First Security Idaho"), and First Security Bank of New Mexico,
N.A. ("First Security New Mexico"), all of which are commercial banking
institutions providing a broad range of banking, fiduciary, financial and other
services. The Company also operates banks in Wyoming ("First Security Wyoming"),
Oregon ("First Security Oregon") and Nevada ("First Security Nevada") (all of
the Company's banking subsidiaries will be referred to hereafter as "the
Banks"). Nonbank subsidiaries owned by the Company include a leasing company, a
mortgage company, a securities broker-dealer, an investment adviser, an
insurance agency, a credit life insurance company and a management and services
company.
In addition to its equity investments in its subsidiaries, the
Company directly or indirectly raises funds principally to finance the
operations of its nonbank subsidiaries. A substantial portion of the Company's
cash flow is typically derived from dividends directly from its bank and nonbank
subsidiaries, and from interest on loans to the Company's nonbank subsidiaries.
Various statutory provisions limit the amount of dividends subsidiary Banks and
certain nonbank subsidiaries can pay to the Company without
3
<PAGE> 6
regulatory approval. In addition, because any obligations issued by the Company
hereunder will only be obligations of the Company, not of any of its subsidiary
Banks or nonbanking operations, the holders of obligations issued by the Company
hereunder will be subordinated to certain prior claims by creditors of the
Company's subsidiaries. See " Supervision and Regulation."
The Company maintains its principal executive offices at 79
South Main Street, Salt Lake City, Utah 84111, telephone 801-246-6000.
COMPETITION
Based on deposits, at September 30, 1995, First Security Utah
was the largest bank in the State of Utah, First Security Idaho was the second
largest bank in the State of Idaho, and First Security New Mexico was the second
largest bank in the Albuquerque area and the third largest bank in New Mexico.
In Wyoming and Oregon, FSC's banks are smaller, more localized competitors.
First Security Oregon, at March 31, 1995, was the 12th largest bank in Oregon.
First Security Wyoming, at December 31, 1995, was the 18th largest bank in
Wyoming.
The Company's banks compete with other banking organizations
in the states in which they operate on the basis of price, service and
convenience. Other types of financial institutions, such as savings banks,
savings and loan associations and credit unions offer a wide range of deposit
and loan services (including commercial loans) and, in some instances, fiduciary
services. The Company's subsidiaries also compete with brokerage firms,
insurance companies and mutual fund companies which provide investment products
and, in many cases, the substantial equivalent of checking accounts, credit
cards and similar products traditionally provided by commercial banks. Major
retailers compete with the Company's lending operations by offering credit cards
and retail installment contracts. It is anticipated that competition from
nonbank organizations will continue to grow.
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
For the fiscal years ended December 31, 1995, 1994, 1993, 1992
and 1991 the Company's consolidated ratios of earnings to combined fixed charges
and preferred stock dividends, and its ratio of earnings to fixed charges,
excluding interest on deposits were 2.19, 3.02, 4.62, 4.54 and 2.28,
respectively; and such ratios including interest on deposits were 1.41, 1.70,
1.72, 1.54 and 1.23, respectively. For purposes of computing the consolidated
ratio of earnings to combined fixed charges and preferred stock dividends,
earnings represent net income plus income taxes and fixed charges. Fixed
charges, excluding interest on deposits, include interest expense (except
interest paid on deposits), capitalized interest, an amount equal to the pretax
earnings required to meet applicable preferred stock dividend requirements and
the interest factor included in rents. Fixed charges, including interest on
deposits, include all interest expense, capitalized interest, an amount equal to
the pretax earnings required to meet applicable preferred stock dividend
requirements and the interest factor included in rents.
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SUPERVISION AND REGULATION
References in this section to applicable statutes and
regulations are brief summaries only, and do not purport to be complete. The
reader should consult such statutes and regulations themselves for a full
understanding of the details of their operation.
Bank Holding Company Regulation
The Company is a bank holding company registered under Bank
Holding Company of 1956 (the "BHC Act"), and is subject to supervision and
regulation by the Federal Reserve Board. Federal laws subject bank holding
companies to particular restrictions on the types of activities in which they
may engage, and to a range of supervisory requirements and activities, including
regulatory enforcement actions for violation of laws and policies. In addition,
Utah law authorizes the state bank regulators to supervise and regulate under
limited circumstances a holding company controlling a Utah domiciled bank.
- ACTIVITIES "CLOSELY RELATED" TO BANKING. The BHC Act
prohibits a bank holding company, with certain limited exceptions, from
acquiring direct or indirect ownership or control of any voting shares of any
company which is not a bank or from engaging in any activities other than those
of banking, managing or controlling banks and certain other subsidiaries, or
furnishing services to or performing services for its subsidiaries. One
principal exception to these prohibitions allows the acquisition of interests in
companies whose activities are found by the Federal Reserve Board to be so
closely related to banking, managing, or controlling banks as to be a proper
incident thereto. Such activities include making or servicing loans, performing
certain data processing services, acting as an investment or financial advisor
to certain investment trusts and investment companies, and providing securities
brokerage services.
- SECURITIES ACTIVITIES. The Federal Reserve Board has
approved applications by bank holding companies to engage, through nonbank
subsidiaries, in certain securities underwriting activities, provided that the
affiliates would not be "principally engaged" in such activities for purposes of
Section 20 of the Glass-Steagall Act. In very limited situations, holding
companies have been permitted to underwrite and deal in corporate debt and
equity securities through such subsidiaries.
- SAFE AND SOUND BANKING PRACTICES. Bank holding companies are
not permitted to engage in unsafe and unsound banking practices. The Federal
Reserve Board may order a bank holding company to terminate an activity or
control of a nonbank subsidiary if such activity or control constitutes a
significant risk to the financial safety, soundness or stability of a subsidiary
bank and is inconsistent with sound banking principles.
The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 ("FIRREA") expanded the Federal Reserve Board's authority to
prohibit activities of bank holding companies and their nonbanking subsidiaries
which represent unsafe and unsound banking practices or which constitute
violations of laws or regulations. Notably, FIRREA increased the amount of
monetary penalties which the Federal Reserve Board can assess for such practices
or violations to as high as $1 million per day. FIRREA also expanded the scope
of individuals and entities against which such penalties may be assessed.
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- ANTI-TYING RESTRICTIONS. Bank holding companies and their
bank and nonbank affiliates are prohibited from tying the provision of certain
services, such as extensions of credit, to other services offered by a holding
company or its affiliates.
- ANNUAL REPORTING; EXAMINATIONS. The Company is required to
file an annual report with the Federal Reserve Board and such additional
information as the Federal Reserve Board may require pursuant to the BHC Act.
The Federal Reserve Board may examine a bank holding company or any of its
subsidiaries, and charge the company for the cost of such an examination.
- CAPITAL ADEQUACY REQUIREMENTS. The Federal Reserve Board
monitors the capital adequacy of bank holding companies. The Federal Reserve
Board uses a combination of risk-based guidelines and leverage ratios to
evaluate capital adequacy. The Federal Reserve Board has adopted a system based
upon the Basle Accord, an international standard for risk-based capital
guidelines, to evaluate the capital adequacy of bank holding companies. Under
the risk-based capital guidelines, different categories of assets are assigned
different risk weights, based generally on the perceived credit risk of the
asset. These risk weights are multiplied by corresponding asset balances to
determine a "risk- weighted" asset base. Certain off-balance sheet items, which
previously were not expressly considered in capital adequacy computations, are
added to the risk-weighted asset base by converting them to a balance sheet
equivalent and assigning to them the appropriate risk weight. Total capital is
defined as the sum of "Tier 1" and "Tier 2" capital elements, with "Tier 2"
being limited to 100% of "Tier 1." For bank holding companies, "Tier 1" capital
includes, with certain restrictions, common stockholders' equity, retained
earnings, non-cumulative perpetual preferred stock and minority interests in
consolidated subsidiaries less certain intangibles. "Tier 2" capital includes,
with certain limitations, certain forms of non-qualifying perpetual preferred
stock, maturing capital instruments (such as qualifying convertible and/or
subordinated debt), the reserve for possible loan losses and specified levels of
certain intangibles.
In addition to the risk-based capital guidelines, the Federal
Reserve Board has adopted the use of a leverage ratio as an additional tool to
evaluate the capital adequacy of banks and bank holding companies. The leverage
ratio is a company's "Tier 1" capital divided by its adjusted total assets. This
leverage ratio must be at least 3.0% for institutions with the Federal Reserve's
highest asset rating, called "CAMEL 1". Institutions which are not CAMEL 1 rated
are expected to maintain a leverage ratio of 4.0% to 5.0%, and institutions
planning acquisitions are expected to maintain higher ratios.
The following table sets forth the current regulatory
requirements for capital ratios of bank holding companies as compared with the
Company's capital ratios at December 31, 1995:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
TIER 1 TOTAL
CAPITAL TO CAPITAL TO
Leverage RISK-WEIGHTED RISK-WEIGHTED
Ratio ASSETS(1) ASSETS(2)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REGULATORY MINIMUM 4.00-5.00% 4.00% 8.00%
- -----------------------------------------------------------------------------------------------------------------------------
THE COMPANY'S ACTUAL 7.12% 10.35% 13.86%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Shareholders' equity less goodwill (Tier 1 capital) divided by risk-weighted
assets.
(2) Tier 1 capital plus reserve for possible loan losses (limited to 1.25% of
total risk-weighted assets) plus qualified subordinated and convertible debt
(Tier 2 capital) divided by risk-weighted assets.
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<PAGE> 9
Bank regulators continue to indicate their desire to raise
capital requirements applicable to banking organizations beyond their current
levels. Management cannot predict whether these capital requirements will change
or whether they will materially affect the Company's financial position or
operating ability.
- AUDIT REPORTS. Federal law requires insured depository
institutions with $500 million or more in total assets, such as the Company and
each of First Security Utah, First Security Idaho and First Security New
Mexico, to submit annual audit reports prepared by independent auditors to
federal and state regulators. In most cases, the audit report of the
institution's holding company can be used to satisfy this requirement. The
annual audit report shall include financial statements prepared in accordance
with generally accepted accounting principles, statements concerning
management's responsibility for the financial statements, internal controls and
compliance with legal requirements designated by the FDIC, and an attestation
by the auditor regarding the statements of management. Federal law also
requires that independent audit committees be formed, consisting of outside
directors only. The committees of institutions with assets of $3 billion or
more, such as the Company, must include members with experience in banking or
financial management, must have access to outside counsel, and must not include
representatives of large customers. The Company's Board of Directors includes
an independent audit committee which complies with these requirements.
- ACQUISITIONS BY BANK HOLDING COMPANIES. The BHC Act requires
every bank holding company to obtain the prior approval of the Federal Reserve
Board before it may acquire all or substantially all of the assets of any bank,
or ownership or control of any voting shares of any bank, if after such
acquisition it would own or control, directly or indirectly, more than 5% of the
voting shares of such bank.
The Federal Reserve Board may allow the acquisition by a
bank holding company of an interest in a bank located in another state if the
bank holding company is adequately capitalized and adequately managed
regardless of the law of the state in which the target bank is located. Utah
banking laws permit, in certain circumstances, out-of-state bank holding
companies to acquire certain existing banks and bank holding companies in Utah.
In addition, FDICIA has eased restrictions on cross-industry
mergers between commercial banks and savings institutions. Members of the Bank
Insurance Fund ("BIF"), such as the Company, and the Savings Association
Insurance Fund are generally allowed to merge, assume each other's deposits, and
transfer assets in exchange for an assumption of deposit liabilities.
Subsidiary Bank Regulation
Three of the Company's bank subsidiaries are national banks,
which are subject to regulation and supervision by the Office of the Comptroller
of the Currency (the "Comptroller"). The other banks are each subject to
regulation by regulators in their respective states and the
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<PAGE> 10
FDIC. Bank regulations on both the federal and state levels are broad in their
scope and materially affect the business of the Company and its banks.
All of the Company's subsidiary banks are subject to the
requirements and restrictions under federal and state law, including
requirements to maintain reserves against deposits, restrictions on the types
and amounts of loans that may be granted and the interest that may be charged
thereon, and limitations on the types of investments that may be made and the
types of services that may be offered. Various consumer laws and regulations
also affect the operations of the banks. In addition to the impact of
regulation, commercial banks are affected significantly by actions of the
Federal Reserve Board as it attempts to control the money supply and credit
availability.
- RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES. Section 23A of
the Federal Reserve Act imposes quantitative and qualitative limits on loan
transactions between a bank and its affiliates, and also requires certain levels
of collateral for such loans. It also limits the amount of advances to third
parties which are collateralized by the securities or obligations of the Company
or its subsidiaries. Section 23B of the Federal Reserve Act requires that
certain transactions between the Company's subsidiary banks and their affiliates
must be on terms at least as favorable to the Company or its subsidiaries as
those prevailing for comparable transactions with other nonaffiliated companies.
In the absence of such comparable transactions, any transaction between the
Company and its affiliates must be on terms and under circumstances, including
credit standards, that in good faith would be offered to or would apply to
nonaffiliated companies. The Company is currently in material compliance with
the requirements of Sections 23A and 23B.
- RESTRICTIONS ON SUBSIDIARY BANK DIVIDENDS. The Federal Reserve
Board, the Comptroller and the FDIC have each issued policy statements to the
effect that bank holding companies and member banks, national banks and state
banks should generally only pay dividends out of current operating earnings. The
prior approval of the Comptroller is required if the total of all dividends
declared by the board of directors of a national bank, such as First Security
Utah, First Security Idaho and First Security New Mexico, in any calendar year
will exceed the aggregate of the bank's net profits (as defined by regulatory
authorities) for that year and its retained net profits for the preceding two
years. Certain generally similar restrictions govern the other banking
subsidiaries of the Company. In addition, national banks can pay dividends only
to the extent that retained net profits exceed "bad debts", which are generally
defined to include the principal amount of loans that are in arrears as to
interest by nine months or more and that are not secured and that are not in the
process of collection. As of December 31, 1995, the Company's banks could have
declared additional dividends to the Company of approximately $210 million
without regulatory approval or restriction. Federal banking regulators also may
prohibit federally insured banks from paying dividends if the payment of such
dividend would leave the bank "undercapitalized" as defined in FDICIA and the
implementing regulations, or the payment of dividends would, in light of the
financial condition of such bank, constitute an unsafe or unsound practice.
Applicable Nevada, Wyoming and
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Oregon law place similar restrictions on the payment of dividends by the
Company's banks organized under the laws of those states.
- EXAMINATIONS. The FDIC periodically examines and evaluates
insured banks. Based upon such an evaluation, the FDIC may revalue the assets of
an insured institution and require that it establish specific reserves to
compensate for the difference between the FDIC- determined value and the book
value of such assets. FDICIA requires that these on-site examinations be
conducted every 12 months, except that certain well capitalized banks may be
examined every 18 months. The rules and regulations of the Comptroller, which
regulates the Company's national banks, and the various state banking
authorities regulating the Company's state-chartered banks also provide for
periodic examinations by those agencies.
- CURRENT REGULATORY STRUCTURE. The laws and regulations
affecting banks and bank holding companies are under continual review. For
example, recent federal legislative proposals include bills which would
consolidate all banking regulators into one or two regulatory agencies and
others which would permit interstate branching to various degrees. The rules and
the regulatory agencies in this area have changed significantly over recent
years, and there is reason to expect that similar changes, including changes
which may materially affect the Company's operations, will continue in the
future.
USE OF PROCEEDS
Unless otherwise set forth in the Prospectus Supplement, the net
proceeds from the sale of the Securities will be applied to the Company's
general funds to be utilized for such corporate purposes as may be determined by
management, including payment of cash amounts due upon completion of
acquisitions, funding of investments in or extensions of credit to the Company's
subsidiaries, and repayment of borrowings. Except as otherwise described in the
Prospectus Supplement, specific allocations of the proceeds to such purposes
will not have been made at the date of the Prospectus Supplement, although
management of the Company will have determined that funds should be raised at
that time in anticipation of future funding requirements. The precise amounts
and timing of payments due upon completion of acquisitions, of investments in
and extensions of credit to the subsidiaries, and the repayment of borrowings
will depend upon funding requirements and the availability of other funds.
Pending such application, net proceeds may be temporarily invested or applied to
the reduction of short-term indebtedness.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities
sets forth certain general terms and provisions of the Debt Securities to which
any Prospectus Supplement may relate. The particular terms of the Debt
Securities offered by a Prospectus Supplement and the
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extent, if any, to which such general provisions may not apply thereto will be
described in the Prospectus Supplement relating to such Debt Securities.
The Debt Securities may be Senior Debt Securities or Subordinated
Debt Securities (both including but not limited to Medium-Term Notes). The
Senior Debt Securities will be issued under an Indenture dated as of March 1,
1994 (the "Senior Indenture") between the Company and The First National Bank of
Chicago, as Trustee (together with its successor trustee, if any, the "Senior
Trustee"), and the Subordinated Debt Securities will be issued under an
Indenture dated as of March 1, 1994 (the "Subordinated Indenture") between the
Company and The First National Bank of Chicago, as Trustee (together with its
successor trustee, if any, the "Subordinated Trustee"). The Senior Indenture and
the Subordinated Indenture are collectively referred to herein as the
"Indentures," copies of the forms of which are filed as exhibits to the
Registration Statement of which this Prospectus is a part. References to the
"Trustee" below shall mean the Senior Trustee or the Subordinated Trustee. The
following summaries of certain provisions of the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture applicable to a particular series of
Debt Securities (the "Applicable Indenture"), including the definitions therein
of certain terms. Wherever particular sections, articles or defined terms of the
Indentures are referred to, it is intended that such sections, articles or
defined terms shall be incorporated herein by reference. Section and article
references used herein are references to the Applicable Indenture. Capitalized
terms not otherwise defined herein shall have the meaning given them in the
Applicable Indenture.
GENERAL
Neither Indenture limits the amount of Debt Securities which may
be issued thereunder, and Debt Securities of any series may be issued thereunder
up to the aggregate principal amount which may be authorized from time to time
by the Company. Neither the Indentures nor the Debt Securities will limit or
otherwise restrict the amount of other indebtedness which may be incurred or the
other securities which may be issued by the Company or any of its Subsidiaries.
The Debt Securities will be unsecured direct obligations of the Company.
Because the Company is a holding company, its rights and the
rights of its creditors, including the holders of the Debt Securities, to
participate in the assets of any Subsidiary upon the latter's liquidation or
recapitalization would be subject to the prior claims of such Subsidiary's
creditors except to the extent that the Company may itself be a creditor with
claims against the Subsidiary that are recognized by a court having jurisdiction
over such claims.
Unless otherwise indicated in the Prospectus Supplement,
principal of and any premium and interest on the Debt Securities will be
payable, and the transfer of the Debt Securities will be registrable, at the
currently designated office of the Trustee at One First National Plaza, Chicago,
Illinois 60670. In addition, payment of interest on Debt Securities may, at the
option of the Company, be made by check mailed to the address of the person
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entitled thereto as it appears on the Security Register. (Sections 301, 305 and
1002). Acting in accordance with each Indenture, the Company intends also to
designate the principal office of First Security Utah as an office where
principal, premium, and interest may be paid and the transfer of the Debt
Securities may be registered. (Sections 301, 305 and 1002)
Unless otherwise indicated in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form, without coupons, in
denominations of $1,000 and any integral multiple thereof. (Section 302) No
service charge will be made for any registration of transfer or exchange of the
Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
(Section 302) The Indentures also provide that the Debt Securities of any
series, if so specified with respect to a particular series, may be issued in
permanent global form. See " Global Debt Securities."
Reference is made to the Prospectus Supplement for a description
of the following terms, where applicable, of each series of Debt Securities in
respect of which this Prospectus is being delivered: (1) the title of the Debt
Securities of the series; (2) any limit on the aggregate principal amount of the
Debt Securities of the series; (3) the date or dates on which the principal of
the Debt Securities of the series will be payable; (4) the rate or rates (which
may be fixed or variable) at which the Debt Securities of the series will bear
interest, if any, the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable, and the Regular
Record Dates for such Interest Payment Dates; (5) the place or places where the
principal of, premium, if any, and interest on the Debt Securities of the series
shall be payable; (6) the period or periods within which, the price or prices at
which and the terms and conditions upon which the series of Debt Securities may
be redeemed, in whole or in part, at the option of the Company; (7) the
obligation, if any, of the Company to redeem or purchase the Debt Securities of
the series pursuant to any sinking fund or analogous provision or at the option
of the Holders thereof and the period or periods within which, the price or
prices at which and the terms and conditions upon which Debt Securities of the
series shall be redeemed or purchased, in whole or in part, pursuant to such
obligation; (8) the denomination or denominations in which such Debt Securities
are authorized to be issued; (9) the currency of payment of principal of,
premium, if any, and interest on the Debt Securities of the series; (10) any
index or formula used to determine the amount of payment of principal of,
premium, if any, and interest on the Debt Securities of the series; (11) if
other than the principal amount thereof, the portion of the principal amount of
Debt Securities of the series which shall be payable upon declaration of
acceleration of the Maturity thereof; (12) whether the Debt Securities of the
series shall be issued in whole or in part in the form of one or more Global
Securities and, if so, the Depositary for such Global Security or Securities;
(13) the portion of the principal amount of such Debt Securities which will be
payable upon declaration of acceleration of the Maturity thereof, if other than
the principal thereof; (14) any additional Events of Default or, in the case of
Subordinated Debt Securities, Default, solely with respect to the Debt
Securities; (15) whether the provisions of the applicable Indenture described
under "Defeasance and Covenant Defeasance" will be applicable to such Debt
Securities; (16) any additional restrictive covenants included solely for the
benefit of the Debt Securities; (17) if the
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Debt Securities are Subordinated Debt Securities, whether the provisions in the
Subordinated Indenture described under "Subordination of Subordinated Debt
Securities" or other subordination provisions will be applicable to such
Subordinated Debt Securities; and (18) any other terms of the series of Debt
Securities not inconsistent with the provisions of the Applicable Indenture.
The Debt Securities may be issued as Original Issue Discount Debt
Securities, to be offered and sold at a discount below their stated principal
amount. Any such Original Issue Discount Debt Securities will be described in
the Prospectus Supplement related thereto, which description will include a
discussion of the material federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Debt Securities.
An "Original Issue Discount Security" is generally a Debt Security which
provides for an amount less than the principal amount thereof to be due and
payable upon the declaration of acceleration of the Maturity thereof upon the
occurrence of an Event of Default and the continuation thereof.
CONVERSION AND EXCHANGE
The terms, if any, on which Debt Securities of any series are
convertible into or exchangeable for shares of Common Stock, Preferred Stock or
Warrants will be set forth in the Prospectus Supplement related thereto. Such
terms may include provisions for conversion or exchange, either mandatory, at
the option of the holder, or at the option of the Company, in which the number
of shares of Common Stock, Preferred Stock or Warrants to be received by the
holders of Debt Securities would be calculated according to the market price of
Common Stock, Preferred Stock or Warrants as of a time stated in the Prospectus
Supplement.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The payment of the principal of and interest on the Subordinated
Debt Securities will, to the extent set forth in the Subordinated Indenture, be
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (as defined in the Subordinated Indenture). In certain events of
insolvency, the payment of the principal of and interest on the Subordinated
Debt Securities will, to the extent set forth in the Subordinated Indenture,
also be effectively subordinated in right of payment to the prior payment in
full of all Other Financial Obligations (as defined in the Subordinated
Indenture and defined below). Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshalling of assets or any
bankruptcy, insolvency or similar proceedings of the Company, the holders of all
Senior Indebtedness will first be entitled to receive payment in full of all
amounts due or to become due thereon before the Holders of the Subordinated Debt
Securities will be entitled to receive any payment in respect of the principal
of or interest on the Subordinated Debt Securities. If upon any such payment or
distribution of assets to creditors, there remain, after giving effect to such
subordination provisions in favor of the holders of Senior Indebtedness, any
amounts of cash, property or securities available for payment or distribution in
respect of Subordinated Debt Securities (as defined in the Subordinated
Indenture and defined below, "Excess Proceeds") and if, at such time, any
Entitled
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Persons in respect of Other Financial Obligations have not received payment in
full of all amounts due or to become due on or in respect of such Other
Financial Obligations, then such Excess Proceeds shall first be applied to pay
or provide for the payment in full of such Other Financial Obligations before
any payment or distribution may be made in respect of the Subordinated Debt
Securities. In the event of the acceleration of the maturity of any Debt
Securities, the holders of all Senior Indebtedness will first be entitled to
receive payment in full of all amounts due thereon before the Holders of the
Subordinated Debt Securities will be entitled to receive any payment upon the
principal of or interest on the Subordinated Debt Securities. No payments on
account of principal of or interest on the Subordinated Debt Securities or on
account of the purchase or acquisition of Subordinated Debt Securities may be
made if there shall have occurred and be continuing a default in any payment
with respect to Senior Indebtedness, or if any judicial proceeding shall be
pending with respect to any such default. (Article Thirteen of the Subordinated
Indenture)
By reason of such subordination in favor of the holders of
Senior Indebtedness, in the event of insolvency, creditors of the Company who
are not holders of Senior Indebtedness or of the Subordinated Debt Securities
may recover less, ratably, than Holders of Senior Indebtedness and may recover
more, ratably, than the Holders of the Subordinated Debt Securities. By reason
of the obligation of the Holders of Subordinated Debt Securities to pay over any
Excess Proceeds to Entitled Persons in respect of Other Financial Obligations,
in the event of insolvency, holders of Existing Subordinated Indebtedness (as
defined in the Subordinated Indenture and defined below) may recover less,
ratably, than Entitled Persons in respect of Other Financial Obligations and may
recover more, ratably, than the Holders of Subordinated Debt Securities.
Unless otherwise specified in the Prospectus Supplement
relating to the particular series of Subordinated Debt Securities offered
thereby, Senior Indebtedness is defined in the Subordinated Indenture as (a) the
principal of (and premium, if any), and interest on all indebtedness of the
Company for money borrowed, whether outstanding on the date of execution of the
Subordinated Indenture or thereafter created, assumed or incurred, except (i)
such indebtedness as is by its terms expressly stated to be junior in right of
payment to the Subordinated Debt Securities and (ii) such indebtedness as is by
its terms expressly stated to rank pari passu with the Subordinated Debt
Securities and (b) any deferrals, renewals or extensions of any such Senior
Indebtedness; provided, however, that Senior Indebtedness shall not include
Existing Subordinated Indebtedness. (Section 101 of the Subordinated Indenture)
The term "indebtedness for money borrowed" when used with respect to the Company
is defined to mean any obligation of, or any obligation guaranteed by, the
Company for the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, and any deferred obligation of,
or any such obligation guaranteed by, the Company for the payment of the
purchase price of property or assets. (Section 101 of the Subordinated
Indenture)
Unless otherwise specified in the Prospectus Supplement
relating to the particular series of Subordinated Debt Securities offered
thereby, Existing Subordinated Indebtedness means the Company's 7.50%
Subordinated Notes due 2002 issued under an
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Indenture, dated as of August 1, 1991, between the Company and Norwest Bank
Minnesota, N.A., as trustee; and the Company's 7.00% Subordinated Notes Due 2005
issued under an Indenture, dated as of March 1, 1994, between the Company and
First National Bank of Chicago, as trustee.
Unless otherwise specified in the Prospectus Supplement
relating to the particular series of Subordinated Debt Securities offered
thereby, Other Financial Obligations means (a) obligations of the Company under
direct credit substitutes, (b) obligations of, or any such obligation directly
or indirectly guaranteed by, the Company for purchased money or funds, (c) any
deferred obligation of, or any such obligation directly or indirectly guaranteed
by, the Company for the payment of the purchase price of property or assets, (d)
any obligation of, or any such obligation directly or indirectly guaranteed by,
the Company for the payment of rent or other amounts under a lease of property
or assets which obligation is required to be classified and accounted for as a
capitalized lease on the balance sheet of the Company under generally accepted
accounting principles, and (e) all obligations of the Company to make payment
pursuant to the terms of financial instruments, such as (i) securities contracts
and foreign currency exchange contracts, (ii) derivative instruments, such as
swap agreements (including interest rate and foreign exchange rate swap
agreements), cap agreements, floor agreements, collar agreements, interest rate
agreements, foreign exchange rate agreements, options, commodity futures
contracts, commodity option contracts and (iii) in the case of both (i) and (ii)
above, similar financial instruments, other than (A) obligations on account of
Senior Indebtedness and (B) obligations on account of indebtedness for money
borrowed ranking pari passu with or subordinate to the Subordinated Debt
Securities. Unless otherwise specified in the Prospectus Supplement relating to
the particular series of Subordinated Debt offered thereby, Entitled Persons
means any person who is entitled to payment pursuant to the terms of Other
Financial Obligations. (Section 101 of the Subordinated Indenture)
Indebtedness of the Company senior to the Subordinated Debt
Securities, at March 31, 1996, totalled approximately $475 million ($200 million
if the currently outstanding subordinated debt securities are ranked pari passu
with the new Subordinated Debt Securities).
The Company's obligations under the Subordinated Debt
Securities shall rank pari passu in right of payment with each other and with
the Existing Subordinated Indebtedness, subject to the obligations of the
Holders of Subordinated Debt Securities to pay over any Excess Proceeds to
Entitled Persons in respect of Other Financial Obligations as provided in the
Subordinated Indenture.
The Subordinated Indenture does not limit or prohibit the
incurrence of additional Senior Indebtedness, which may include indebtedness
that is senior to the Subordinated Debt Securities, but subordinate to other
obligations of the Company, including obligations of the Company in respect of
Other Financial Obligations. The Senior Debt Securities, when issued, will
constitute Senior Indebtedness.
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The Prospectus Supplement may further describe the provisions,
if any, applicable to the subordination of the Subordinated Debt Securities of a
particular series.
CERTAIN COVENANTS IN THE SENIOR INDENTURE
Restrictions on Certain Dispositions of Major Constituent Banks.
The Senior Indenture provides that, except as described below under
"Consolidation, Merger and Sale of Assets", the Company will not (a) sell,
assign, transfer, or otherwise dispose of any shares of, or securities
convertible into, or options, warrants or rights to subscribe for or purchase
shares of, Voting Stock of a Major Constituent Bank (as defined below) (or a
Subsidiary owning Voting Stock of a Major Constituent Bank) or permit a Major
Constituent Bank (or a Subsidiary owning Voting Stock of a Major Constituent
Bank) to issue any shares of, or securities convertible into or options,
warrants or rights to subscribe for or purchase shares of such Voting Stock, if,
in each case, after giving effect to any such transaction and to the issuance of
the maximum number of shares of Voting Stock of such Major Constituent Bank (or
Subsidiary) issuable upon the exercise of all such convertible securities,
options, warrants or rights, the Major Constituent Bank would cease to be a
Controlled Subsidiary, or (b) permit a Major Constituent Bank (or a Subsidiary
owning Voting Stock of a Major Constituent Bank) to (i) merge or consolidate
with or into any other corporation, unless the surviving corporation is, or upon
consummation of the merger or consolidation will become, a Controlled
Subsidiary; or (ii) lease, sell or transfer all or substantially all of its
properties and assets to any Person, except to a Controlled Subsidiary or a
Person that, upon such lease, sale or transfer, will become a Controlled
Subsidiary. The Senior Indenture, however, provides that any such sale or other
disposition of securities, any such merger or consolidation or any such lease,
sale or transfer of properties and assets will not be prohibited (i) if required
by any law or any rule, regulation or order of any governmental agency or
authority, (ii) if required as a condition imposed by any law or rule,
regulation or order of any governmental agency or authority to the acquisition
by the Company, directly or indirectly, of any Person, provided that, after
giving effect to such other prohibited transaction and such acquisition, (A)
such Person will be a Controlled Subsidiary and (B) the Consolidated Banking
Assets (as defined below) of the Company will be at least equal to the
Consolidated Banking Assets of the Company prior thereto, or (iii) if the
proceeds from such otherwise prohibited transaction are within 180 days after
such transaction, or such longer period of time as may be necessary to obtain
regulatory approval in connection therewith, invested by the Company, pursuant
to an understanding or agreement in principle reached at the time of such
otherwise prohibited transaction, in one or more Controlled Subsidiaries
(including any Person which upon such investment becomes a Controlled
Subsidiary) engaged in the banking business or any other business then legally
permissible for bank holding companies. (Section 1008)
"Major Constituent Bank" means (i) First Security Utah, First
Security Idaho and First Security New Mexico or (ii) any Subsidiary Bank the
consolidated banking assets of which constitute 20% or more of the aggregate
consolidated banking assets of all Subsidiary Banks. As of December 31, 1995,
First Security Utah, First Security Idaho and First Security New Mexico were the
only Major Constituent Banks. "Controlled Subsidiary" means any Subsidiary more
than 80% of the outstanding shares of the Voting Stock of which is at the time
owned
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directly or indirectly by the Company or by one or more Controlled Subsidiaries
or by the Company and one or more Controlled Subsidiaries. "Consolidated banking
assets" of a Subsidiary Bank means all assets owned directly or indirectly by
such Subsidiary Bank and reflected on the Company's consolidated balance sheet
prepared in accordance with generally accepted accounting principles. (Section
101)
Restrictions on Liens on Voting Stock of Major Constituent Banks.
The Senior Indenture provides that the Company will not create, assume, incur or
suffer to be created, assumed or incurred or to exist any pledge, encumbrance or
lien, as security for indebtedness for borrowed money, upon any shares of, or
securities convertible into or options, warrants or rights to subscribe for or
purchase shares of, Voting Stock of a Major Constituent Bank now or hereafter
owned by the Company, directly or indirectly, without making effective provision
whereby any Debt Securities shall be equally and ratably secured with any and
all such indebtedness if, treating such pledge, encumbrance or lien as a
transfer of the shares of, or securities convertible into or options, warrants,
or rights to subscribe for or purchase shares of, Voting Stock subject thereto
to the secured party and after giving effect to the issuance of the maximum
number of shares of Voting Stock of such Major Constituent Bank issuable upon
the exercise of all such convertible securities, options, warrants or rights,
the Major Constituent Bank would not continue to be a Controlled Subsidiary.
(Section 1009)
Neither the Senior Indenture nor the Subordinated Indenture
contain any restriction on the Company's ability to enter into a highly
leveraged transaction or any provision affording any special protection to
Holders in the event that the Company engages in a highly leveraged transaction.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Indenture provides that the Company, without the consent of
the holders of any of the Outstanding Debt Securities, may consolidate with or
merge into, or convey, transfer, or lease its properties and assets
substantially as an entirety to, any Person, provided that (a) the successor is
a Person organized under the laws of any domestic jurisdiction and assumes the
Company's obligations on the Debt Securities and under the Indenture, (b) after
giving effect to the transaction there exists no Event of Default or, in the
case of the Subordinated Indenture, Default, and no event which, after notice or
lapse of time would become an Event of Default or, in the case of the
Subordinated Indenture, Default, shall have occurred and be continuing, and (c)
certain other conditions are met. (Section 801)
GLOBAL DEBT SECURITIES
If any Debt Securities of a series are to be issued in permanent
global form, the Prospectus Supplement relating thereto will describe the
circumstances, if any, under which beneficial owners of interests in any such
permanent global Debt Security may exchange such interests for certificated 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
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permanent global Debt Security will be payable in the manner described in the
Prospectus Supplement relating thereto. (Section 205).
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures provide under Article 13 (for the Senior
Indenture) and Article 14 (for the Subordinated Indenture), if such provision is
made applicable to the particular Debt Securities of any series pursuant to
Section 301 of the Applicable Indenture (which will be indicated in the
Prospectus Supplement applicable thereto), that the Company may elect either (A)
to defease and be discharged from any and all obligations with respect to such
Debt Securities then outstanding (including, in the case of Subordinated Debt
Securities, the provisions described under "Subordination of Subordinated Debt
Securities" and except for the obligations to register the transfer or exchange
of such Debt Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of the Debt
Securities and to hold moneys for payment in trust) ("defeasance") or (B) to be
released from its obligations with respect to such Debt Securities then
outstanding under Sections 1006 through Section 1009 of the Senior Indenture and
Sections 1006 and 1007 of the Subordinated Indenture (and any other sections
applicable to such Debt Securities that are determined pursuant to Section 301
to be subject to covenant defeasance), the occurrence of an event of default
specified in, in the case of Senior Debt Securities, Section 501(4) of the
Senior Indenture, and in the case of Subordinated Debt Securities, Section
503(C) of the Subordinated Indenture (with respect to Sections 1006 through
Section 1009 of the Senior Indenture and Sections 1006 and 1007 of the
Subordinated Indenture or any other section applicable to such Debt Securities
that are determined pursuant to Section 301 to be subject to covenant
defeasance), or, in the case of Senior Debt Securities, Section 501(5) of the
Senior Indenture, and in the case of Subordinated Debt Securities, Section
503(D) of the Subordinated Indenture (Section 1006 of the Indentures containing
the covenant to maintain properties, Section 1007 of the Indentures containing
the covenant to pay taxes and other claims, Section 1008 of the Senior Indenture
containing the restrictions described under "Restrictions on Certain
Dispositions of Major Constituent Banks", Section 1009 of the Senior Indenture
containing the restrictions described under "Restriction on Liens on Voting
Stock of Major Constituent Banks" and Sections 501(4) and 501(5) of the Senior
Indenture and Sections 503(C) and 503(D) of the Subordinated Indenture
containing the provisions described under "Defaults" relating to covenant
defaults and cross-defaults, respectively) and, in the case of Subordinated Debt
Securities, the provisions described under "Subordination of Subordinated Debt
Securities" ("covenant defeasance"), upon the deposit with the Senior Trustee or
Subordinated Trustee (or other qualifying trustee), in trust for such purpose,
of money, and/or U.S. Government Obligations which through the payment of
principal and interest in accordance with their terms will provide money, in an
amount sufficient, without reinvestment, to pay the principal of (and premium,
if any) and interest on such Debt Securities to maturity or redemption, as the
case may be, and any mandatory sinking fund or analogous payments thereon. As a
condition to defeasance or covenant defeasance, the Company must deliver to the
Senior Trustee or Subordinated Trustee an Opinion of Counsel (as specified in
the Applicable Indenture) to the effect that the Holders of such Debt Securities
will not recognize income, gain or loss for Federal income tax purposes as a
result of such defeasance or covenant
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defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
or covenant defeasance had not occurred. Such opinion, in the case of defeasance
under clause (A) above, must refer to and be based upon a ruling of the Internal
Revenue Service issued to the Company or published as a revenue ruling or upon a
change in applicable Federal income tax law, in any such case after the date of
the Applicable Indenture.
Under current Federal income tax law, defeasance would likely be
treated as a taxable exchange of Debt Securities to be defeased for interests in
the defeasance trust. As a consequence a holder would recognize gain or loss
equal to the difference between the holder's cost or other tax basis for such
Debt Securities and the value of the holder's proportionate interest in the
defeasance trust, and thereafter would be required to include in income a
proportionate share of the income, gain and loss of the defeasance trust. Under
current Federal income tax law, covenant defeasance would ordinarily not be
treated as a taxable exchange of such Debt Securities. Purchasers of such Debt
Securities should consult their own advisors with respect to the tax
consequences to them of such defeasance and covenant defeasance, including the
applicability and effect of tax laws other than the Federal income tax law.
The Company may exercise its defeasance option with respect to
such Debt Securities notwithstanding its prior exercise of its covenant
defeasance option. If the Company exercises its defeasance option, payment of
such Debt Securities may not be accelerated because of an Event of Default. If
the Company exercises its covenant defeasance option, payment of such Debt
Securities may not be accelerated by reference to the covenants noted under
clause (B) above. However, if such an acceleration were to occur, the realizable
value at the acceleration date of the money and U.S. Government Obligations in
the defeasance trust could be less than the principal and interest then due on
such Debt Securities, in that the required deposit in the defeasance trust is
based upon scheduled cash flows rather than market value, which will vary
depending upon interest rates and other factors. (Article 13 and Article 14 of
the Senior Indenture and the Subordinated Indenture, respectively).
The Prospectus Supplement may further describe the provisions, if
any, applicable to defeasance or covenant defeasance with respect to the Debt
Securities of a particular series.
DEFAULT
The Senior Indenture
The following are Events of Default under the Senior Indenture
with respect to Senior Debt Securities of any series: (1) failure to pay
principal of or premium, if any, on any Debt Securities of that series when due;
(2) failure to pay any interest on any Senior Debt Securities of that series,
when due, continued for 30 days; (3) failure to deposit any sinking fund
payment, when due, in respect of any Senior Debt Securities of that series; (4)
failure to perform any other covenant of the Company in the Senior Indenture
(other than a covenant included in the Senior Indenture solely for the benefit
of series of Senior Debt Securities other than that
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series), continued for 60 days after written notice as provided in the Senior
Indenture; (5) failure to pay when due the principal of or the acceleration of
any indebtedness for borrowed money by the Company or any Major Constituent
Bank, in any individual instance or in the aggregate in the principal amount in
excess of $1,000,000, if such indebtedness is not discharged or such
acceleration is not annulled within 10 days after written notice as provided in
the Senior Indenture; (6) certain events in bankruptcy, insolvency, or
reorganization of the Company or any Major Constituent Bank; and (7) any other
Event of Default provided in any supplemental indenture entered into with
respect to Senior Debt Securities of a particular series as described in the
Prospectus Supplement. (Section 501)
If an Event of Default with respect to Senior Debt Securities of
any series shall occur and be continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the Outstanding Senior Debt
Securities of that series by notice as provided in the Indenture may declare the
principal amount to be due and payable immediately. At any time after a
declaration of acceleration with respect to Senior Debt Securities of any series
has been made, but before a judgment or decree for payment of money has been
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of outstanding Senior Debt Securities of that series may, under certain
circumstances, rescind and annul such acceleration.
(Sections 502 and 503)
The Subordinated Indenture
The Subordinated Indenture defines an Event of Default with
respect to any series of Subordinated Debt Securities as being certain events
involving the bankruptcy, insolvency or reorganization of the Company or any
other Event of Default provided with respect to Securities of any series.
(Section 501) If any Event of Default with respect to Subordinated Debt
Securities of any series at the time Outstanding occurs and is continuing,
either the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Subordinated Debt Securities of that series may declare the
principal amount of all Subordinated Debt Securities of that series to be due
and payable immediately (provided that no such declaration is required upon
certain events of bankruptcy, insolvency or reorganization), but upon certain
conditions such declaration may be annulled and past defaults (except, unless
theretofore cured, a default in payment of principal of (or premium, if any), or
interest on the Subordinated Debt Securities of that series and certain other
specified defaults) may be waived by the Holders of a majority in principal
amount of the Outstanding Subordinated Debt Securities of that series on behalf
of the Holders of all Subordinated Debt Securities of that series. (Sections 502
and 513)
The Subordinated Indenture does not provide for any right of
acceleration of the payment of principal of a series of Subordinated Debt
Securities upon a default in the payment of principal or interest or in the
performance of any covenant or agreement in the Subordinated Debt Securities of
the particular series or in the Subordinated Indenture. The Subordinated
Indenture defines a Default with respect to Subordinated Debt Securities of any
series as any one of the following events: (1) an Event of Default; (2) failure
to pay any interest on any Subordinated Debt Securities of that series, when
due, continued for 30 days; (3) failure to pay
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principal of (or premium, if any), on any Subordinated Debt Securities of that
series when due; (4) failure to deposit any sinking fund payment, when due, in
respect of any Subordinated Debt Securities of that series; (5) failure to
perform any other covenant of the Company in the Subordinated Indenture (other
than a covenant included in the Subordinated Indenture solely for the benefit of
a series of Subordinated Debt Securities other than that series) continued for
60 days after written notice as provided in the Subordinated Indenture; (6)
failure to pay when due the principal of or the acceleration on any indebtedness
for borrowed money by the Company or a Major Constituent Bank, in any individual
instance or in the aggregate in the principal amount in excess of $3,000,000, if
such indebtedness is not discharged or such acceleration is not annulled within
10 days after written notice as provided in the Subordinated Indenture; and (7)
any other Default with respect to Subordinated Debt Securities of a particular
series as described in the Prospectus Supplement. In case a Default shall occur
and be continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders by appropriate judicial
proceeding as the Trustee deems most effectual. (Section 503)
The Senior and Subordinated Indentures
Reference is made to the Prospectus Supplement for the particular
provisions relating to acceleration of the Maturity of any portion of the
principal amount of a series of Debt Securities upon the occurrence of an Event
of Default and the continuation thereof.
Each Indenture provides that, subject to the duty of the Trustee
during default to act with the required standard of care, the Trustee will be
under no obligation to exercise any of its rights or powers under the applicable
Indenture at the request or direction of any of the Holders unless such Holders
shall have offered to the Trustee reasonable indemnity. (Section 603) Subject to
such provisions for the indemnification of the Trustee, the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of any
series will have the right to direct the time, method, and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Debt Securities of that
series. (Series 512)
Under each Indenture the Company is required to furnish annually
to the Trustee a statement as to the performance by the Company of certain of
its obligations under such Indenture and as to any default in such performance.
(Section 1004)
MODIFICATION OF INDENTURES AND WAIVER OF CONDITIONS
Modifications and amendments of each Indenture may be made by the
Company and the Trustee with the consent of the Holders of 66-2/3% in aggregate
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment, provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security of each series affected thereby, (1) change the stated maturity date of
the principal of, or any installment of principal of or interest on, any Debt
Securities; (2) reduce the principal amount of, the rate of interest on or any
premium payable
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<PAGE> 23
upon the redemption of any Debt Securities; (3) reduce the amount of the
principal of any Original Issue Discount Security that would be due and payable
upon a declaration of acceleration of the Maturity thereof; (4) change any Place
of Payment where, or the coin or currency in which, payment of principal of, or
any premium or interest on, any Debt Securities may be made; (5) impair the
right to institute suit for the enforcement of any payment on or with respect to
any Debt Securities; or (6) in the case of the Subordinated Indenture, modify
the provisions thereof with respect to the subordination of the Subordinated
Debt Securities in a manner adverse to the Holders thereof; or (7) reduce the
percentage in principal amount of Outstanding Debt Securities of any series, the
consent of whose Holders is required for modification or amendment of the
applicable Indenture or for waiver of compliance with certain provisions of the
applicable Indenture or for waiver of certain defaults. (Section 902)
Each Indenture provides that the Holders of 66-2/3% in aggregate
principal amount of the Outstanding Debt Securities of any series may, on behalf
of all Holders of Debt Securities of that series, waive, insofar as that series
is concerned, compliance by the Company with certain restrictive provisions of
the applicable Indenture with respect to the Debt Securities of such series.
(Section 1010 of the Senior Indenture, Section 1008 of the Subordinated
Indenture) The Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may, on behalf of all Holders of Debt
Securities of that series, waive any past default under the applicable Indenture
with respect to the Debt Securities of such series except a default in the
payment of principal or any premium or interest with respect to the Debt
Securities of such series or in respect of a covenant or provision of the
applicable Indenture which cannot be modified or amended without the consent of
the Holders of each Outstanding Debt Security of such series. (Section 513)
REGARDING THE TRUSTEE
The First National Bank of Chicago is the Senior Trustee under
the Senior Indenture and the Subordinated Trustee under the Subordinated
Indenture. Certain of the Company's subsidiaries now, or in the future may,
maintain deposit accounts and/or other banking relationships with the Trustee.
DESCRIPTION OF PREFERRED STOCK
The following statements are brief summaries of the material
provisions relating to the Company's Preferred Stock and are qualified in their
entirety by the provisions of the Company's Certificate of Incorporation and
Bylaws which have been filed with the Commission.
- SERIES A PREFERRED STOCK. The Company's Certificate of
Incorporation authorizes the issuance of 400,000 shares of preferred stock with
no par value. On December 31, 1995, there were 10,872 shares of $3.15 Cumulative
Convertible Preferred Stock, Series "A" (the "Series A Preferred Stock")
outstanding. Holders of Series A Preferred Stock have the right to receive
semi-annual dividends at the annual rate of $3.15 per share. Such right is
cumulative and such dividends are payable before dividends may be paid on the
Company's Common Stock.
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Each shares of Series A Preferred Stock is convertible into 18.225 shares of the
Company's Common Stock. This conversion right is subject to adjustment in
certain events to protect against dilution of the conversion rights attached to
the Series A Preferred Stock. In the event of a liquidation, dissolution or
winding up of the Company, the holders of Series A Preferred Stock are entitled
to receive cash value of $52.50 per share plus unpaid accumulated preferred
dividends before any distribution is made to holders of the Company's Common
Stock. The Company may, at the option of the Board of Directors, redeem all or
any part of the outstanding Series A Preferred Stock at the redemption price of
$52.50 per share plus unpaid accumulated preferred dividends. The Series A
Preferred Stock is currently not publicly traded.
Holders of the Company's Series A Preferred Stock are entitled to
one vote per share on all matters submitted to a vote of stockholders. Voting
for the election of directors is not cumulative. If at any time four or more
semi-annual dividends on the Series A Preferred Stock are in default, in whole
or in part, the holders of the Series A Preferred Stock as a class will be
entitled to elect four directors and the holders of the Company's Common Stock
will be entitled to elect the remaining directors. Holders of any additional
Preferred Stock hereafter issued may have such full or limited voting rights as
are provided by the Board of Directors.
- JUNIOR SERIES B PREFERRED STOCK. 75,133 shares of the Company's
Preferred Stock are reserved under the Rights Agreement between the Company and
First Security Bank of Utah, N.A., in connection with the Rights associated with
the Company's Common Stock. (See " DESCRIPTION OF COMMON STOCK -- Rights Plan")
- Additional Series of Preferred Stock. The Board of Directors of
the Company is authorized by the Certificate of Incorporation to provide,
without further shareholder action, for the issuance of one or more series of
preferred stock. The Board of Directors has the power to fix various terms with
respect to each series, including voting powers, designations, preferences and
relative, participating, optional or other special rights, qualifications,
limitations, restrictions and redemption, conversion or exchangeability
provisions. Holders of any series of preferred stock issued hereunder will have
no pre-emptive rights.
The applicable Prospectus Supplement will set forth the following
specific terms regarding the series of Preferred Stock offered thereby: (i) the
designation, number of shares and liquidation preference per share; (ii) the
initial public offering price; (iii) the dividend rate or rates; (iv) the index,
if any, upon which the amount of dividends, if any, is determined; (v) the dates
on which dividends, if any, will accrue and be payable and the designated record
dates for determining the holders entitled to such dividends; (vi) any
redemption or sinking fund provisions; (vii) any conversion or exchange
provisions; (viii) provisions for issuance of global securities; (ix) the
currency (which may be composite currency) in which payment of dividends, if
any, shall be payable if other than United States dollars; (x) voting rights;
and (xi) any additional terms, preferences or rights.
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Under regulations adopted by the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"), if the holders of shares
of any series of preferred stock of the Company become entitled to vote for the
election of directors because the Board of Directors of the Company has failed
to declare or pay dividends on such series, such series may then be deemed a
class of "voting securities" and a holder of 25 percent or more of such series
(or a holder of five percent or more if it otherwise exercises a "controlling
influence" over the Company) may then be subject to regulation as a bank holding
company in accordance with the Bank Holding Company Act of 1956, as amended. In
addition, at such time as such series is deemed a class of voting securities,
any other bank holding company may be required to obtain the prior approval of
the Federal Reserve Board to acquire five percent or more of such series and any
person other than a bank holding company may be required to obtain the prior
approval of the Federal Reserve Board to acquire ten percent or more of such
series.
The shares of Preferred Stock will, when issued, be fully paid
and nonassessable and will have no pre-emptive rights.
The transfer agent, registrar, dividend disbursing agent and
redemption agent for the Preferred Stock will be specified in the Prospectus
Supplement relating thereto.
Because the Company is a holding company, its rights, the rights
of its creditors and of its stockholders, including the holders of any shares of
Preferred Stock, to participate in any distribution of 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
principal sources of the Company's revenues are dividends received from its
subsidiary Banks. Various statutory provisions limit the amount of dividends the
Company's subsidiary Banks and certain nonbank subsidiaries can pay without
regulatory approval, and various regulations can also restrict the payment of
dividends. Certain proposed regulations could further limit the ability of the
Company's subsidiary Banks to pay dividends to the Company, and federal statutes
limit the ability of subsidiary Banks to make loans to the Company. See
"Supervision and Regulation."
Dividends
The holders of the Preferred Stock of each series will be
entitled to receive, when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefor, cumulative or non-cumulative
cash or other dividends at such rate or rates and on such dates as will be set
forth in the Prospectus Supplement relating to such series. Such rates may be
fixed or variable or both. If variable, the formula used for determining the
dividend rate for each dividend period will be set forth in the Prospectus
Supplement. Dividends will be payable to the holders of record as they appear on
the stock books of the Company on such record dates as will be fixed by the
Board of Directors of the Company and specified in the Prospectus Supplement. If
the Board of Directors of the Company fails to declare a dividend payable on a
dividend payment date on any series of the Preferred Stock for which dividends
are noncumulative ("Noncumulative Preferred Stock"), then the holders of such
series of the
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Preferred Stock will have no right to receive a dividend in respect of the
dividend period ending on such dividend payment date, and the Company will have
no obligation to pay a dividend for such period, whether or not dividends on
such series are declared payable on any future dividend payment dates.
No dividends may be declared in respect of any dividend period on
any other series or class of preferred stock ranking on a parity as to dividends
unless full cumulative dividends on all outstanding shares of each series of
Preferred Stock on which dividends are cumulative shall have been paid in full
or contemporaneously are declared and paid through the most recent dividend
payment date, unless otherwise indicated in the Prospectus Supplement. In the
event that full cumulative dividends on such Preferred Stock have not been
declared and paid or set apart when due, the Company may not declare or pay any
dividends on, or make other distributions on or make any payment on account of
the purchase, redemption, or other retirement, of its Common Stock or any other
stock of the Company ranking as to dividends or upon liquidations junior to such
Preferred Stock (other than, in the case of dividends or distributions,
dividends or distributions paid in shares of, or options, warrants or rights to
subscribe for or purchase shares of, Common Stock or such other junior ranking
stock), unless full cumulative dividends on such Preferred Stock are made or set
apart for payment, unless otherwise indicated in the Prospectus Supplement.
Redemption
The shares of any series of Preferred Stock may be provided to be
redeemable at the option of the Company and may be provided to be subject to
mandatory redemption pursuant to a sinking fund or otherwise, in each case upon
the terms, on the date or dates and at the redemption price or prices set forth
in the Prospectus Supplement related to such series. If fewer than all shares of
Preferred Stock are to be redeemed, the shares to be redeemed shall be selected
by the Company pro rata or by lot, or by any other method determined by the
Board of Directors to be equitable. Under regulations of the Federal Reserve
Board, any perpetual preferred stock redeemable at the option of the Company may
qualify as Tier 1 or Tier 2 capital only if the redemption is subject to prior
approval of the Federal Reserve Board. Therefore, any redemption of Preferred
Stock at the option of the Company will require the prior approval of the
Federal Reserve Board in order for the Preferred Stock to qualify as capital for
bank regulatory purposes.
If any dividends on shares of any series of Preferred Stock are
in arrears, no shares of Common Stock or shares of capital stock ranking junior
to or on parity with the Preferred Stock shall be redeemed and no shares of such
series of Preferred Stock shall be redeemed unless all outstanding shares of
such series are simultaneously redeemed, and the Company shall not purchase or
otherwise acquire any shares of such series; provided, however, that the
foregoing shall not prevent the purchase or acquisition of shares of such series
pursuant to a purchase or exchange offer made on the same terms to holders of
all outstanding shares of such series.
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Any notice of redemption shall be given by mailing to each record
holder of the shares to be redeemed, not less than 40 days nor more than 70 days
prior to the date fixed for the redemption thereof, to the respective addresses
of such holders as the same shall appear on the Company's stock books. Each such
notice shall state: (i) the redemption date; (ii) the number of shares and
series of the Preferred Stock to be redeemed; (iii) the redemption price and the
manner in which such redemption price is to be paid and delivered; (iv) the
place or places where certificates for such shares of Preferred Stock are to be
surrendered for payment of the redemption price; and (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date. If fewer
than all shares of any series of the Preferred Stock held by any holder are to
be redeemed, the notice mailed to such holder shall also specify the number of
shares to be redeemed from such holder.
If notice of redemption has been given, from and after the
redemption date for the shares of the series of the Preferred Stock called for
redemption (unless default shall have occurred by the Company in providing money
for the payment of the redemption price of the shares so called for redemption),
dividends on the shares of Preferred Stock so called for redemption will cease
to accrue, any right to convert the shares of Preferred Stock will terminate,
such shares will no longer be deemed to be outstanding, and all rights of the
holders thereof as stockholders of the Company (except the right to receive the
redemption price) will cease. Upon surrender in accordance with such notice of
the certificates representing any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Company will so require
and the notice shall so state), the redemption price set forth above will be
paid out of funds provided by the Company. If fewer than all of the shares
represented by any such certificate are redeemed, a new certificate will be
issued representing the unredeemed shares without cost to the holder thereof.
Liquidation Preference
Upon any liquidation, dissolution or winding up of the Company,
the holders of shares of each series of Preferred Stock shall be entitled to
receive out of the assets of the Company available for distribution to
stockholders, before any distribution of assets is made to or set apart for the
holders of Common Stock or of any other shares of stock of the Company ranking
as to such a distribution junior to the shares of such series, with respect to
the Preferred Stock, an amount described in the Prospectus Supplement relating
to such series of Preferred Stock. If, in any case of any such liquidation,
dissolution or winding up of the Company, the assets of the Company or the
proceeds thereof shall be insufficient to pay in full the amounts payable with
respect to shares of each series of Preferred Stock, and any other shares of
stock of the Company ranking as to any such distribution on a parity therewith,
the holders of shares of such series of Preferred Stock and of such other shares
will share ratably in any such distribution of assets of the Company in
proportion to the full respective preferential amounts to which they are
entitled. After payment to the holders of shares of such series of Preferred
Stock of the full preferential amounts to which they are entitled, the holders
of shares of such series of Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Company, unless otherwise
provided in the Prospectus Supplement. A
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consolidation or merger of the Company with one or more corporations shall not
be deemed to be a liquidation, dissolution or winding up of the Company.
The terms, if any, on which shares of any series of Preferred
Stock are convertible into or exchangeable for Debt Securities or Common Stock
will be set forth in the Prospectus Supplement relating thereto. Such terms may
include provisions for conversion or exchange, either mandatory, at the option
of the holder, or at the option of the Company, in which the number of shares of
Common Stock to be received by the holders of Preferred Stock would be
calculated according to the market price of Common Stock as of a time stated in
the Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The following description of the Common Stock sets forth certain
general terms and provisions of the Common Stock to which any Prospectus
Supplement may relate, including a Prospectus Supplement providing that Common
Stock will be issuable in conversion of or exchange for Debt Securities or
Preferred Stock issued by the Company. The statements below describing the
Common Stock are in general terms and are in all respects subject to and
qualified in their entirety by reference to the applicable provisions of the
Company's Certificate of Incorporation and By-laws.
General
The Company is currently authorized to issue 300,000,000 shares
of Common Stock with a par value of $1.25 per share. As of December 31, 1995,
there were outstanding 75,133,000 shares (net of shares held as Treasury Stock)
of the Company's Common Stock, as restated for a 3-for-2 stock split in the form
of a 50% stock dividend paid in February 1996. At such date, there were an
additional 1,181,000 shares reserved for issuance under the Company's
Comprehensive Management Incentive Plan as stock bonuses and other awards;
1,268,000 shares reserved for issuance under the Company's Dividend Reinvestment
Plan; 198,000 shares reserved for issuance upon the conversion of the Company's
Series A Preferred Stock, and 3,708,000 shares reserved for issuance upon
exercise of outstanding stock options.
The Company's Common Stock has no pre-emptive or conversion
rights.
The Company's Common Stock is not subject to redemption by the
Company, and there is no restriction on the repurchase by the Company of shares
of the Company's Common Stock except for certain regulatory limits.
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Voting
The holders of the Company's Common Stock are entitled to voting
rights for the election of directors and for other purposes, subject to the
voting rights of the holders of Preferred Stock conferred by law and to the
specific voting rights granted to each series of Preferred Stock and to voting
rights which may in the future be granted to subsequently created series of
Preferred Stock.
Dividends
Dividends will be determined by the Company's Board of Directors
in light of circumstances existing at the time, including the earnings and
financial condition of the Company, and there is no assurance that dividends
will continue to be paid at current levels. No material restrictions have been
imposed on the Company's ability to pay dividends from its earned surplus by
bank regulations or applicable law. As of December 31, 1995, approximately $288
million could be applied to dividend payments to its shareholders and certain
other payments without impairing capital to inadequate levels under federal
regulatory requirements. Payment of dividends on the Company's Common Stock is
also subject to the prior rights of the Company's outstanding Preferred Stock.
Rights Plan
As of August 28, 1989, the Company adopted a Shareholder Rights
Agreement (the "Plan") and the Board of Directors of the Company on that date
(a) declared a dividend of one "Right" for each share of the Company's Common
Stock held of record as of the close of business on September 8, 1989, and (b)
authorized the issuance of one Right in respect of each share of the Company's
Common Stock issued after September 8, 1989 and prior to the occurrence of
certain events described in the Plan, primarily involving the acquisition of
target levels of the Company's shares by persons not then holding such amounts.
Each Right entitles the registered holder to purchase from the Company a unit
consisting of one-thousandth of a share of Junior Series B Preferred Stock at a
purchase price of $29.63 per unit. The Rights are attached to all shares of the
Company's Common Stock that were outstanding on September 8, 1989 or have been
issued since that date, and no separate Rights Certificates have been or will be
distributed until the occurrence of certain events described in the Rights
Agreement. Until the occurrence of such events, no Right may be exercised or
traded separately from the Company's Common Stock. Following separation, the
Rights may, depending upon the occurrence of certain events described in the
Rights Agreement, entitle the holders thereof to either purchase or receive
additional shares of the Company's Common Stock. The Rights will expire at the
close of business on August 28, 1999, unless earlier redeemed by the Company,
which may be done at $0.01 per Right, in accordance with the terms of the Plan.
The Plan is designed to protect the Company's stockholders'
interests in the event of an unsolicited attempt to acquire the Company,
including a gradual accumulation of shares in the open market. The Company
believes that the Plan provides protection against a partial
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or two-tier tender offer that does not treat all stockholders equally and
against other coercive takeover tactics which could impair the Company's Board
of Directors' ability to represent the Company's stockholders fully. Management
believes that the Rights should also deter any attempt by a controlling
stockholder to take advantage of the Company through self-dealing transactions.
The Plan is not intended to prevent a takeover of the Company. Issuing the
Rights has no dilutive effect, does not affect reported earnings per share, and
does not change the way in which the Company's shares are traded. However, the
exercise of Rights by some but not all of the Company's stockholders would have
a dilutive effect on nonexercising stockholders. Moreover, some may argue that
the Plan has the potential for "entrenching" current management by allowing
current voting stockholders to increase their voting shares, thus making a
tender offer more difficult and costly.
Supermajority Vote Requirement
The Company's Certificate of Incorporation provides that, in
general, an affirmative vote of not less than 80% of the outstanding shares of
the Company's Common Stock is required to approve or authorize certain major
corporate transactions involving the Company and holders of more than 15% of the
Company's Common Stock (including certain mergers, substantial dispositions of
assets, liquidation or dissolution, or recapitalization). The 80% vote is not
required in some such circumstances, including certain transactions which have
been approved in advance by a majority of the Board of Directors, or where
holders of the Company's Common Stock receive a price per share that satisfies
the fairness criteria set forth in the Certificate of Incorporation.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
Section 203 ("Section 203") of the Delaware General Corporation
Law (the "DGCL") applies to Delaware corporations with a class of voting stock
listed on a national securities exchange, authorized for quotation on an
inter-dealer quotation system or held of record by 2,000 or more persons. In
general, Section 203 prevents an "interested stockholder" (defined generally as
any person owning, or who is an affiliate or associate of the corporation and
has owned in the preceding three years, 15% or more of a corporation's
outstanding voting stock and the affiliates and associates of such person) from
engaging in a "business combination" (as defined) with a Delaware corporation
for three years following the date such person became an interested stockholder,
unless (i) before such person became an interested stockholder, the board of
directors of the corporation approved either the business combination or the
transaction in which the interested stockholder became an interested
stockholder; (ii) upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding stock held by directors who are also officers
of the corporation and by employee stock plans that do not provide employees
with the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer); or (iii) on or subsequent
to the date such person became an interested stockholder, the business
combination is approved by the board of directors of the corporation
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and authorized at a meeting of stockholders by the affirmative vote of the
holders of two-thirds of the outstanding voting stock of the corporation not
owned by the interested stockholder. Under Section 203, the restrictions
described above also do not apply to certain business combinations proposed by
an interested stockholder following the announcement or notification of one of
certain extraordinary transactions involving the corporation and a person who
had not been an interested stockholder during the previous three years or who
became an interested stockholder with the approval of a majority of the
corporation's directors.
Section 203 could have the effect of delaying, deferring or
preventing a change of control of the Company.
LIMITATION OF DIRECTORS' LIABILITY
The DGCL authorizes corporations to limit or eliminate the
personal liability of directors, to the corporation and its stockholders, for
monetary damages in connection with the breach of a director's fiduciary duty of
care. The duty of care requires that, when acting on behalf of the corporation,
directors must exercise an informed business judgment based on all material
information reasonably available to them. Absent the limitation authorized by
the Delaware statute, directors could be accountable to corporations and their
stockholders for monetary damages for conduct that does not satisfy such duty of
care. Although the statute does not change a director's duty of care, it enables
corporations to limit available relief to equitable remedies such as injunction
or rescission. The Company's Certificate of Incorporation limits the liability
of the Company's directors to the Company or its stockholders to the fullest
extent permitted by the Delaware statute as in effect from time to time.
Specifically, directors of the Company will not be personally liable for
monetary damages for breach of a director's fiduciary duty as a director, except
for liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payments of dividends or unlawful stock repurchases or redemptions as
provided in Section 174 of the DGCL or (iv) for any transaction from which the
director derived an improper personal benefit.
The inclusion of this provision in the Certificate of
Incorporation may have the effect of reducing the likelihood of derivative
litigation against directors and may discourage or deter stockholders or
management from bringing a lawsuit against directors for breach of their duty of
care, even though such an action, if successful, might otherwise have benefitted
the Company and its stockholders. This provision does not affect a director's
responsibilities under certain other laws such as the federal securities laws or
state or federal environmental laws.
OFFICER AND DIRECTOR INDEMNIFICATION
The Company's Bylaws require indemnification of the Company's
directors and executive officers to the full extent permitted by the DGCL,
except in connection with an action initiated by such officer or director or in
an action against the Company, its directors, officers, employees or agents,
unless (i) such indemnification is expressly required by law, (ii) the
29
<PAGE> 32
proceeding in question was authorized by the Board of Directors or (iii) such
indemnification is otherwise authorized by the DGCL. The Company's Bylaws
provide that the Company shall have the power, but shall not be required, to
indemnify its other officers, employees and agents as set forth in the DGCL.
The Company provides liability insurance for its officers and
directors for certain losses arising from claims or charges which may be made
against them while acting in their capacities as directors or officers of the
Company.
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants for the purchase of a
particular series of Common Stock. The Common Stock Warrants are to be issued
under warrant agreements (each a "Common Stock Warrant Agreement") to be entered
into between the Company and First Security Bank, Utah, N.A., as warrant agent
(the "Common Stock Warrant Agent"), all as set forth in the Prospectus
Supplement relating to the particular issue of Common Stock Warrants (the
"Offered Common Stock Warrants"). A copy of the Common Stock Warrant Agreement,
including the form of common stock warrant certificate (the "Common Stock
Warrant Certificate") representing the Common Stock Warrants, substantially in
the form in which it will be executed, is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Common Stock Warrant Agreement and Common Stock Warrant Certificates do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Common Stock Warrant Agreement and
the Common Stock Warrant Certificates, respectively, including the definitions
therein of certain terms.
GENERAL
If Common Stock Warrants are offered, the Prospectus Supplement
will describe the terms of the Offered Common Stock Warrants, and the Common
Stock Warrant Agreement relating to the Offered Common Stock Warrants and the
Common Stock Warrant Certificates representing the Offered Common Stock Warrants
including the following:
(i) the number of shares of Common Stock purchasable upon
exercise of Common Stock Warrants and the price at which such
number of shares of Common Stock may be purchased upon such
exercise;
(ii) the date on which the right to exercise such Common
Stock Warrants shall commence and the date (the "Expiration
Date") on which such right shall expire;
30
<PAGE> 33
(iii) United States Federal income tax consequences
applicable to such Common Stock Warrants; and
(iv) any other terms of such Common Stock Warrants.
Common Stock Warrants for the purchase of Common Stock will be
offered and exercisable for U.S. dollars only. Common Stock Warrants will be
issued in registered form only. The exercise price for Common Stock Warrants
will be subject to adjustment in accordance with the applicable Prospectus
Supplement.
EXERCISE OF COMMON STOCK WARRANTS
Each Common Stock Warrant will entitle the holder to purchase for
cash such number of shares (as applicable) of Common Stock, at such exercise
price as shall in each case be set forth in, or calculable from, the Prospectus
Supplement relating to the Offered Common Stock Warrants, which exercise price
may be subject to adjustment upon the occurrence of certain events as set forth
in such Prospectus Supplement. Offered Common Stock Warrants may be exercised at
any time up to the close of business of the Expiration Date set forth in the
Prospectus Supplement relating to the Offered Common Stock Warrants. After the
close of business on the Expiration Date (or such later date to which such
Expiration Date may be extended by the Company), unexercised Common Stock
Warrants will become void. The place or places where, and the manner in which,
Common Stock Warrants may be exercised shall be specified in the Prospectus
Supplement relating to such Common Stock Warrants.
Prior to the exercise of any Common Stock Warrants to purchase
Common Stock, holders of such Common Stock Warrants will not have any rights of
holders of the Common Stock purchasable upon such exercise, including the right
to receive payments of dividends, if any, on the Common Stock purchasable upon
such exercise or to exercise any applicable right to vote.
PLAN OF DISTRIBUTION
The Company may sell the Securities (i) through agents, (ii)
through underwriters, (iii) through dealers and (iv) directly to purchasers.
Securities may be offered and sold through agents designated by
the Company from time to time. Any such agent involved in the offer or sale of
the 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 1933, as
amended, of the Securities so offered and sold. Agents 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 Securities
Act of 1933, as amended.
31
<PAGE> 34
If an underwriter or underwriters are utilized in the sale of the
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 transaction, 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 the
Securities. Underwriters will acquire Securities for their own account and may
resell such Securities from time to time in one or more transactions, including
negotiated transactions, at fixed public offering prices or at varying prices
determined at the time of sale. Securities may be offered to the public either
through underwriting syndicates represented by managing underwriters, or
directly by the managing underwriters. The underwriters may be entitled, under
the relevant underwriting agreement, to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended. If an underwriter is utilized in the sale of the Securities, the
underwriting agreement will provide that the obligations of the underwriter is
subject to certain conditions precedent and that the underwriter with respect to
a sale of Securities will be obligated to purchase all such Securities if any
are purchased.
If a dealer is utilized in the sale of the Securities, the
Company will sell such Securities to the dealer, as principal. The dealer may
then resell such Securities to the public at varying prices to be determined by
such dealer at the time of resale. Any such dealer may be deemed to be an
underwriter, as such term is defined in the Securities Act of 1933, as amended,
of the Securities so offered and sold. 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 Securities Act of
1933, as amended. The name of the dealer and the terms of the transaction will
be set forth in the Prospectus Supplement relating thereto.
Offers to purchase Securities may be solicited directly by the
Company and sales thereof may be made by the Company directly to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act of 1933, as amended, with respect to any sale thereof. The
terms of any such sales will be described in the Prospectus Supplement relating
thereto.
If so indicated in the Prospectus Supplement, the Company will
authorize agents and underwriters to solicit offers by certain institutions to
purchase 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. Each Contract will be for an amount not less than, and, unless the
Company otherwise agrees, the aggregate principal amount of Securities sold
pursuant to Contracts shall be not less nor more than, the respective amounts
stated in the Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions but shall in all cases be subject to the
approval of the Company.
32
<PAGE> 35
Contracts will not be subject to any conditions except that any
related sale of Securities to underwriters shall have occurred and the purchase
by an institution of the Securities covered by its Contract shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject. A commission indicated in the
Prospectus Supplement will be paid to underwriters and agents soliciting
purchases of Offered Securities pursuant to Contracts accepted by the Company.
The place and time of delivery of the Securities are set forth in
the accompanying Prospectus Supplement.
The offer and sale of the Securities by any affiliate of the
Company will comply with the requirements of Schedule E of the By-laws of the
National Association of Securities Dealers, Inc. regarding underwriting of
securities of an affiliate.
Certain of the underwriters or agents and their associates may be
customers of, engage in transactions with, and perform services for, the Company
in the ordinary course of business.
EXPERTS
The consolidated financial statements as of December 31, 1995 and
1994, and for each of the three years in the period ended December 31, 1995
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
VALIDITY OF SECURITIES
The validity of the Securities offered hereby will be passed upon
for the Company by Ray, Quinney & Nebeker, 79 South Main Street, Salt Lake City,
Utah 84111; and for any underwriters by Sullivan & Cromwell, 444 South Flower
Street, Los Angeles, California 90071. Alonzo W. Watson, a shareholder and
director of Ray, Quinney & Nebeker, is an officer of the Company. As of December
31, 1995, Ray, Quinney & Nebeker attorneys, together with their immediate
families, beneficially owned less than 4% of the then outstanding Common Stock
of the Company. From time to time, Sullivan & Cromwell has performed legal
services for the Company.
33
<PAGE> 36
EXPLANATION OF DIFFERENCES
BETWEEN PAPER AND ELECTRONIC FILING
On the Prospectus Front Cover a Red and Burgundy First Security
Corporation Logo appears where indicated.
On the Prospectus Back Cover a Red and Burgundy First Security
Corporation Logo appears where indicated.
<PAGE> 37
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
<TABLE>
<S> <C>
Securities and Exchange Commission
Registration Fee................................................................ $181,036
Rating Agency Fees................................................................ 100,000
Blue Sky Fees and Expenses........................................................ 25,000
Accounting Fees and Expenses...................................................... 30,000
Legal Fees and Expenses........................................................... 100,000
Printing and Engraving Expenses................................................... 40,000
Trustee's Fees and Expenses....................................................... 30,000
Miscellaneous Expenses............................................................ 15,000
--------
$
========
</TABLE>
ALL OF THE ABOVE ITEMS EXCEPT THE REGISTRATION FEE ARE ESTIMATED.
ITEM 15. Indemnification of Directors and Officers.
Indemnification. Delaware law provides that a director, employee,
officer or agent of a corporation may be indemnified against liability (other
than in an action by or in the right of the corporation) and other costs
incurred by such person in connection with such proceeding, provided such person
acted in good faith and in a manner such person reasonably believed to be in,
and not opposed to, the best interests of the corporation, and, with respect to
any criminal proceeding, had no reason to believe the conduct was unlawful. For
actions or suits brought by or in the name of the corporation, Delaware provides
that a director, employee, officer or agent of a corporation may be indemnified
against expenses incurred by such person in connection with such proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in and not opposed to, the best interests of the corporation, except that
if such person is adjudged to be liable to the corporation, such person can be
indemnified if and only to the extent that a court determines that despite the
adjudication of liability, in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as the
court shall deem proper. On the other hand, if he/she prevails, indemnification
is mandatory. Under Delaware law, the determination of whether an officer or
director is entitled to indemnification (that is, whether or not the person has
met the statutory standard of conduct required for indemnification) is to be
made in certain circumstances by independent legal counsel. First Security
Corporation's Articles of Incorporation, as amended, provide for indemnification
of such persons to the full extent allowed by applicable law. The proposed
II - 1
<PAGE> 38
forms of Underwriting Agreement and Distribution Agreement, filed as Exhibits
1(a) and 1(b), respectively, to this Registration Statement provide for
indemnification of the Company's officers and directors who signed the
Registration Statement against certain liabilities, including liabilities under
the Securities Act of 1933.
Director's Liability. Delaware allows a corporation to provide,
in its articles or certificate of incorporation, a provision which limits or
eliminates the personal liability of a director to the corporation and its
shareholders or stockholders for monetary damages for such person's breach of
fiduciary duty, provided that such provision may not so limit a director's
liability (i) for a breach of his or her duty of loyalty to the corporation;
(ii) for acts or omissions not in good faith or involving intentional misconduct
or a knowing violation of law; (iii) for unlawful payments of dividends, certain
stock repurchases or redemptions; or (iv) for any transaction from which the
director derived an improper personal benefit.
These provisions have the effect of protecting a corporation's
directors against personal liability from breaches of their duty of care. First
Security Corporation, with the approval of its stockholders, amended its
Certificate of Incorporation to include such provisions in 1988.
ITEM 16. Exhibits.
(1)(a) Form of Underwriting Agreement (incorporated by
reference to Exhibit 1(a) of the Company's
Registration Statement on Form S-3 (No. 33-
52609).
(1)(b) Form of Agency Agreement for Medium-Term Notes
(Incorporated by reference to Exhibit 1 of the
Company's Registration Statement on Form S-3 (No.
33-38483)).
(3)(a) Certificate of Incorporation of the Company, as
amended, (Incorporated by reference to Exhibit
4(a) of the Company's Registration Statement on
Form S-3 (No. 33-38483)).
(3)(b) By-laws of the Company (Incorporated by reference
to Exhibit 3(2) of the Company's Annual Report on
Form 10-K for the year ended December 31, 1995.
(4)(a) Form of Indenture, dated as of March 1, 1994,
between the Registrant and The First National Bank
of Chicago, as Trustee, including form of Debt
Security, with respect to the Senior Debt
Securities (incorporated by reference to Exhibit
4(d) of the Company's Registration Statement on
Form S-3 (No. 33-52609).
II - 2
<PAGE> 39
(4)(b) Form of Indenture, dated as of March 1, 1994,
between the Registrant and The First National Bank
of Chicago, as Trustee, including form of Debt
Security, with respect to the Subordinated Debt
Securities (incorporated by reference to Exhibit
4(b) of the Company's Registration Statement on
Form S-3 (No. 33-52609).
(4)(c) Shareholder Rights Agreement, dated as of August
26, 1989, between the Company and First Security
Bank of Utah, N.A., as Rights Agent (Incorporated
by reference to Exhibits 4(c) and 4(d) of the
Company's Registration Statement on Form S-3 (No.
33-42784)).
(4)(d) Form of Certificate of Designations with respect
to the Preferred Stock (incorporated by reference
to Exhibit 4(d) of the Company's Registration
Statement on Form S-3 (No. 33-52609).
(4)(e) Form of specimen certificate representing the
Common Stock (Incorporated by reference to Exhibit
4(e) of the Company's Registration Statement on
Form S-3 (No. 33-42784)).
(4)(f) Form of specimen certificate representing the
Preferred Stock (incorporated by reference to
Exhibit 4(f) of the Company's Registration
Statement on Form S-3 (No. 33-52609).
(4)(g) Form of Warrant Agreement for Common Stock
(including form of Common Stock Warrant
Certificate) (incorporated by reference to Exhibit
4(g) of the Company's Registration Statement on
Form S-3 (No. 33-52609).
(5) Opinion of Ray, Quinney & Nebeker.
(12) Computation of Ratios of Earnings to Fixed Charges
and Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
(23)(a) Consent of Deloitte & Touche.
(23)(b) Consent of Ray, Quinney & Nebeker (included in
Exhibit (5)).
(24) Powers of Attorney (included in signature pages).
(25) Statement of Eligibility and Qualification of The
First National Bank of Chicago under Trust
Indenture Act of 1939 on Form T-1
(incorporated by reference to Exhibit 26 of the
Company's Registration Statement on Form S-3
(No. 33-52609).
II - 3
<PAGE> 40
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 the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high and of the estimated
maximum offering range may be reflected in the form
of prospectus filed pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price
represent no more than 20% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the registration statement or
any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the 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.
II - 4
<PAGE> 41
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby further 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 each filing of the registrant's
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein and the offering of such securities at 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 under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
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 Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under
the Securities Act of 1933, the information omitted from the
form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the
time it was declared effective.
(2) For the purpose of determining any liability
under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
II - 5
<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Salt Lake City, Utah, on the 6th day of May, 1996.
FIRST SECURITY CORPORATION
By: /s/ Morgan J. Evans
-------------------------------------
Morgan J. Evans
President and Chief Operating Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints A. Robert Thorup, Esq. and Brad D. Hardy, Esq. and each of them, his
true and lawful attorney-in-fact and agent, with full powers of substitution,
for him and in his name, place and stead, in any and all capacities, to sign and
to file any and all amendments, including pre- and/or post-effective amendments
to this Registration Statement, with the Securities and Exchange Commission,
granting to said attorney-in-fact full power and authority to perform any other
act on behalf of the undersigned required to be done in connection therewith.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the date or dates indicated.
Signature Title Date
/s/ Spencer F. Eccles Chairman and Chief
- ---------------------------
Spencer F. Eccles Executive Officer, Director May 6, 1996
/s/ Morgan J. Evans President and Chief
- ---------------------------
Morgan J. Evans Operating Officer, Director May 6, 1996
II - 6
<PAGE> 43
/s/ Scott C. Ulbrich Executive Vice President May 6, 1996
- ------------------------------
Scott C. Ulbrich and Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ James C Beardall Director May 6, 1996
- ------------------------------
James C. Beardall
/s/ Rodney H. Brady Director May 6, 1996
- ------------------------------
Rodney H. Brady
/s/ James E. Bruce Director May 6, 1996
- ------------------------------
James E. Bruce
/s/ Thomas D. Dee II Director May 6, 1996
- ------------------------------
Thomas D. Dee II
/s/ Dr. David P. Gardner Director May 6, 1996
- ------------------------------
Dr. David P. Gardner
/s/ Robert Garff Director May 6, 1996
- ------------------------------
Robert Garff
/s/ David B. Haight Director May 6, 1996
- ------------------------------
David B. Haight
/s/ Jay Dee Harris Director May 6, 1996
- ------------------------------
Jay Dee Harris
/s/ Robert T. Heiner Director May 6, 1996
- ------------------------------
Robert T. Heiner
/s/ Karen H. Huntsman Director May 6, 1996
- ------------------------------
Karen H. Huntsman
II - 7
<PAGE> 44
/s/ G. Frank Joklik Director May 6, 1996
- -----------------------------
G. Frank Joklik
/s/ B. Z. Kastler Director May 6, 1996
- -----------------------------
B. Z. Kastler
/s/ Joseph G. Maloof Director May 6, 1996
- -----------------------------
Joseph G. Maloof
/s/ Scott S. Parker Director May 6, 1996
- -----------------------------
Scott S. Parker
/s/ Dr. Arthur K. Smith Director May 6, 1996
- -----------------------------
Dr. Arthur K. Smith
/s/ James L. Sorenson Director May 6, 1996
- -----------------------------
James L. Sorenson
/s/ Harold J. Steele Director May 6, 1996
- -----------------------------
Harold J. Steele
II - 8
<PAGE> 45
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NUMBER
<S> <C> <C>
(1)(a) Form of Underwriting Agreement (incorporated by reference to Exhibit
1(a) of the Company's Registration Statement on Form S-3 (No. 33-
52609).
(1)(b) Form of Agency Agreement for Medium-Term Notes (Incorporated by
reference to Exhibit 1 of the Company's Registration Statement on
Form S-3 (No. 33-38483)).
(3)(a) Certificate of Incorporation of the Company, as amended,
(Incorporated by reference to Exhibit 3(a) of the Company's
Registration Statement on Form S-3 (No. 33-38483)).
(3)(b) By-laws of the Company (Incorporated by reference to Exhibit
3(2) of the Company's Annual Report on Form 10-K for the year
ended December 31, 1995.
(4)(a) Form of Indenture, dated as of March 1, 1994, between the Registrant
and The First National Bank of Chicago, as Trustee, including form
of Debt Security, with respect to the Senior Debt Securities
(incorporated by reference to Exhibit 4(a) of the Company's
Registration Statement on Form S-3 (No. 33-52609).
(4)(b) Form of Indenture, dated as of March 1, 1994, between the Registrant
and The First National Bank of Chicago, as Trustee, including form
of Debt Security, with respect to the Subordinated Debt Securities
(incorporated by reference to Exhibit 4(b) of the Company's
Registration Statement on Form S-3 (No. 33-52609).
(4)(c) Shareholder Rights Agreement, dated as of August 26, 1989, between
the Company and First Security Bank of Utah N.A. as Rights Agent
(Incorporated by reference to Exhibits 4(c) and 4(d) of the Company's
Registration Statement on Form S-3 (No. 33-42784)).
(4)(d) Form of Certificate of Designations with respect to the Preferred Stock
(incorporated by reference to Exhibit 4(d) of the Company's
Registration Statement on Form S-3 (No. 33-52609).
</TABLE>
II - 9
<PAGE> 46
<TABLE>
<S> <C> <C>
(4)(e) Form of specimen certificate representing the Common Stock
(Incorporated by reference to Exhibit 4(e) of the Company's
Registration Statement on Form S-3 (No. 33-42784)).
(4)(f) Form of specimen certificate representing the Preferred Stock
(incorporated by reference to Exhibit 4(f) of the Company's
Registration Statement on Form S-3 (No. 33-52609).
(4)(g) Form of Warrant Agreement for Common Stock (including form of
Common Stock Warrant Certificate) (incorporated by reference to
Exhibit 4(g) of the Company's Registration Statement on Form S-3
(No. 33-52609).
(5) Opinion of Ray, Quinney & Nebeker.
(12) Computation of Ratios of Earnings to Fixed Charges and Earnings to
Combined Fixed Charges and Preferred Stock Dividends.
(23)(a) Consent of Deloitte & Touche.
(23)(b) Consent of Ray, Quinney & Nebeker (included in Exhibit (5)).
(24) Powers of Attorney (included in signature pages).
(25) Statement of Eligibility and Qualification of The First National Bank
of Chicago under Trust Indenture Act of 1939 on Form T-1
(incorporated by reference to Exhibit 26 of the Company's
Registration Statement on Form S-3 (No. 33-52609).
</TABLE>
II - 10
<PAGE> 1
EXHIBIT 5
Opinion of Ray, Quinney & Nebeker.
II - 45
<PAGE> 2
RAY, QUINNEY & NEBEKER
PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
700 Deseret Building
79 South Main Street
Salt Lake City, Utah 84111
Facsimile: (801) 323-3630
Telephone: (801) 323-3359
A. ROBERT THORUP
May 3, 1996
First Security Corporation
Suite 200
79 South Main Street
Salt Lake City, Utah 84111
Gentlemen:
At your request, we have examined the Registration Statement
on Form S-3 (the "Registration Statement") relating to the registration and sale
from time to time by you of up to an aggregate of $600,000,000 of (i) one or
more series of shares of preferred stock, no par value (the "Preferred Stock"),
(ii) depositary shares representing fractional interests in the Preferred Stock
(the "Depositary Shares"), (iii) common stock, $1.25 par value (the "Common
Stock"), (iv) debt securities (the "Debt Securities"), and (v) warrants to
purchase Preferred Stock, Common Stock or Debt Securities (the "Warrants" and
collectively with the Preferred Stock, the Depositary Shares, the Common Stock
and the Debt Securities, the "Securities"). We have examined the proceedings
heretofore taken and are familiar with the procedures proposed to be taken by
you in connection with the authorization, issuance and sale of the Securities.
Capitalized terms used but not otherwise defined herein shall have the same
meanings ascribed to them in the Registration Statement.
Subject to (i) the proposed additional proceedings being taken
as now contemplated by us as your counsel prior to the issuance of any of the
Securities, (ii) the terms of the Securities being otherwise in compliance with
then applicable law, (iii) the effectiveness of the Registration Statement under
the Securities Act of 1933, as amended, (iv) the due authorization, approval and
filing by you of the Certificate of Designation(s) setting forth the terms of
the Preferred Stock, (v) the due authorization, execution and delivery of the
Indenture pursuant to which Debt Securities are to be issued, (vii) the due
execution, registration and delivery of the certificate or certificates
evidencing the Securities, (viii) the appropriate officers and/or directors
having taken all necessary action to approve the specific terms of the
Securities to be issued, we are of the opinion that:
1. The Preferred Stock to be issued by you, including the
Preferred Stock represented by the Depositary Shares and the Preferred Stock
issued upon exercise of any Warrants issued under the Registration Statement,
will be, when issued and paid for in the manner specified by the Registration
Statement and the exhibits thereto, legally issued, fully paid and
non-assessable;
<PAGE> 3
2. The Depositary Shares to be issued by you will be, when
issued and paid for in the manner specified by the Registration Statement and
the exhibits thereto, legally issued, fully paid and non-assessable;
3. The Common Stock to be issued by you, including any Common
Stock that may be issuable pursuant to the conversion of any Preferred Stock or
Debt Securities or upon exercise of any Warrants, will be, when issued and paid
for in the manner specified by the Registration Statement and the exhibits
thereto, legally issued, fully paid and non-assessable;
4. The Debt Securities to be issued by you, including Debt
Securities issued upon exercise of any Warrants issued under the Registration
Statement, will be, when issued and paid for in the manner specified by the
Registration Statement and the exhibits thereto, legally issued and binding
obligations upon you, subject to the effect of (a) applicable bankruptcy,
insolvency, fraudulent conveyance, moratorium, reorganization or similar laws
and court decisions affecting creditors' rights and remedies generally and (b)
the application of general principles of equity (whether such enforceability is
considered in a proceeding in equity or at law);
5. The Warrants to be issued by you will be, when issued and
paid for in the manner specified by the Registration Statement and the exhibits
thereto, legally issued, fully paid and non-assessable; and
6. The information in the Prospectus under the caption
"Certain Federal Income Tax Considerations," to the extent that it constitutes
matters of law or legal conclusions, is correct with respect to the matters
discussed therein.
You have informed us that you intend to issue the Securities
from time to time on a delayed or continuous basis, and this opinion is limited
to the laws, including the rules and regulations, as in effect on the date
hereof. We understand that prior to issuing any Securities you will advise us in
writing of the terms thereof, will afford us an opportunity to review the
operative documents pursuant to which such Securities are to be issued
(including the applicable Prospectus Supplement) and will file such supplement
or amendment to this opinion (if any) as we may reasonably consider necessary or
appropriate by reason of the terms of such Securities.
We hereby consent to the use of our name in connection with
this opinion in the Registration Statement on Form S-3 being employed to
register the above securities under the Securities Act of 1933.
Very truly yours,
RAY, QUINNEY & NEBEKER
A. Robert Thorup
2
<PAGE> 1
EXHIBIT (12)
STATEMENT RE COMPUTATION OF RATIOS
FIRST SECURITY CORPORATION
Computation of the Ratio of Earnings to
Combined Fixed Charges and Preferred Stock
(in thousands)
<TABLE>
<CAPTION>
For the years ended
---------------------------------
1995 1994 1993
<S> <C> <C> <C>
Earnings:
Net Income.................................................. 120,005 140,134 114,056
Total Provision (Benefit) For Income Taxes.................. 70,091 81,043 59,211
Income before income tax provision (benefit)................ 190,196 221,177 173,267
Fixed charges, excluding interest on deposits............... 159,770 109,744 47,861
Fixed charges, including interest on deposits............... 459,916 315,469 240,853
Adjusted earnings, excluding interest on deposits........... 349,966 330,921 221,128
Adjusted earnings, including interest on deposits........... 650,112 536,646 414,120
Fixed Charges:
Total Interest Expense...................................... 459,868 315,415 240,794
Interest on deposits........................................ 300,146 205,725 192,992
Dividend requirement of preferred stock..................... 35 39 43
Adjustment to compute pretax preferred dividend............. 13 15 16
Fixed charges, excluding interest on deposits............... 159,770 109,744 47,861
Fixed charges, including interest on deposits............... 459,916 315,469 240,853
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits.............................. 2.19 3.02 4.62
Including interest on deposits.............................. 1.41 1.70 1.72
</TABLE>
3
<PAGE> 1
EXHIBIT(23)(a)
Consent of Deloitte & Touche.
4
<PAGE> 2
Exhibit 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
First Security Corporation on Form S-3 of our report dated February 22, 1996,
appearing in the Annual Report on Form 10-K of First Security Corporation for
the year ended December 31, 1995, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Salt Lake City, Utah
May 2, 1996
